retailer cut its transaction costs between 30% and 40% by offering an
alternative to credit cards for online purchases.
Many customers still don’t want to use credit cards to purchase items online because of security concerns, and some simply can’t because they don’t have credit cards. In an effort to capture credit card-averse shoppers, online retailer eBags decided to pioneer an alternative payment option. By offering a convenient, secure, and simple non-credit-card-based method of payment, eBags increased its average order size and reduced its transaction costs.
eBags, founded is 1999, is one of the largest online retailers of bags and accessories. It offers an extensive line of premium and popular brands, including Samsonite, JanSport, The North Face, and Eagle Creek. Products range from backpacks and carry-ons to computer cases and handbags.
Increase Average Order Value With Payment
The online retailer wanted a credit card alternative that customers could use easily and would be comfortable with. “We’ve always looked to cutting-edge technology to enhance our sites,” says Chris Seahorn, senior director of marketing for eBags. The solution the company chose had to enhance customers’ shopping experiences, drive sales, and reduce costs.
After looking at several alternatives, eBags implemented Bill Me Later from I4 Commerce. “Other providers offered a pay-by-check option that didn’t flow as smoothly as we wanted. Bill Me Later allows customers to check out after a quick credit check, then it bills them as a credit card would,” explains Seahorn.
Another advantage Bill Me Later offered was its streamlined integration. The application works with the retailer’s existing platform and it can use the retailer’s current payment processor. “You really need to be cautious whenever you’re integrating something that touches your shopping cart,” advises Seahorn. Bill Me Later’s compatibility and security were key factors in eBag’s decision to implement the solution.
It took eBags about four weeks to have Bill Me Later up and running on its site. Since the application integrates with the retailer’s existing systems, the integration only required some coding to meet the retailer’s specifications. “Things are much easier when you use what you already have, rather than developing and installing an entirely new system,” says Seahorn.
Customer Care Training Increases Credit
One of the factors contributing to the success of eBag’s implementation of Bill Me Later was making sure its customer care employees were well trained. The retailer held training over two days, and all of its customer care employees attended one of the daylong training sessions. “By training this department, we’re able to better explain the program to our customers and increase our customers’ credit approval rates,” states Seahorn.
After implementing the payment alternative, the retailer analyzed several metrics to ensure the system was successful. It determined that its customer conversion rates with the alternate payment solution were higher than with other payment options, and the average order value increased between 10% and 15%. eBags also saw its transaction costs drop between 30% and 40% as compared with other payment options, such as credit cards. Based on its success with Bill Me Later on the eBags site, the retailer has rolled out the payment option to its other sites, including 6pm.com, a Web site for shoes.