Determining whether guest checkouts are right for your customers

The checkout process is a pivotal part of the customer journey — and how well it’s designed can make the difference between a successful sale and an abandoned cart.

Do consumers prefer guest checkout?

Recent research suggests that offering a guest checkout option can be a decisive factor in an online purchase. One study by Capterra revealed that 43% of surveyed shoppers favor guest checkout for online purchases.¹ In the past, this preference has not been limited to first-time customers either -- a 2022 study found that 72% of people with existing retail accounts still opted for guest checkout due to its convenience or speed.¹

The data underscores the importance of understanding consumer preferences for online checkout options. By implementing a guest checkout option, businesses can cater to a significant portion of the market and help ensure they don’t lose potential sales.

Guest checkout minimizes friction and can increase conversions

Integrating a guest checkout feature can help to reduce friction for customers. In a 2022 study by ACA Research, 27% of shoppers said that a mandatory account creation step in checkout is a barrier to online purchasing.²

There are several reasons shoppers may prefer guest checkout:

• Convenience. The account creation process can be time-consuming.
• Privacy concerns. Some customers may be wary of sharing personal information, fearing data breaches or unwanted marketing communications.
• Security concerns. Given the risk of cyber attacks and fraud, shoppers may hesitate to store their personal and payment information on a retailer’s website.

By implementing guest checkout to address these specific consumer needs and preferences, businesses can lower cart abandonment and boost their guest checkout conversion rate. Use these additional tips to decrease cart abandonment.

Weighing up the loss of customer data

While guest checkouts may streamline the purchasing process, brands may miss out on collecting crucial customer data for their marketing and customer relationship teams. This lack of data can impact the effectiveness of personalized marketing strategies and loyalty programs.

Deciding whether the trade-off is worthwhile involves considering the nature of your business, the value you place on targeted marketing, and the preferences of your target demographic. Some companies may find that the increase in conversions offsets the data deficit, while others may see more value in rich customer data.

To mitigate the impact of data loss, businesses can offer incentives to encourage shoppers to create customer accounts. These can include exclusive offers, loyalty rewards, or a more streamlined checkout process for future purchases.

Curating and leveraging an optimized checkout experience with PayPal

With 63% of shoppers stating that optimized checkout experiences are important when it comes to creating the ideal shopping experience when paying for a product, businesses are tasked with finding ways to minimize payment friction while still collecting valuable customer data.³

By integrating PayPal’s comprehensive online payments solution, businesses can offer a fast, more secure, and convenient payment process without sacrificing critical customer insights. Learn more about the cost savings and business benefits of PayPal.