The news: Hollister introduces Share2Pay, a payment solution that allows customers to send their shopping carts to others via text message, according to the Wall Street Journal.
Share2Pay allows teen shoppers, the retail brand’s target market, to send their shopping carts to their parents for them to complete their orders. It’s available on the Hollister app in the US and UK.
How we got here: Hollister launched Share2Pay to combat cart abandonment, which contributed to a 7% year-over-year increase loss of sales for parent company Abercrombie & Fitch in the second quarter.
- The cart abandonment issues of Hollister and its sister brands could be exacerbated by the fact that many of their target customers aren’t old enough to pay for their own purchases. These customers may start browsing online only to abandon their cart if a tutor is not there to complete the purchase.
- But with Share2Pay, customers can continue the shopping journey by sending their carts to someone who can complete the transaction. Early pilots of Share2Pay found that customers who used the solution were twice as likely to place an order as those who did not.
Why is this important: Cart abandonment results in lower sales volume and merchant revenue, making it a major problem.
- The US retail e-commerce shopping cart abandonment rate was 88% on desktop and 94% on mobile in Q1 2021according to Insider Intelligence Retail Ecommerce Performance Benchmarking.
- Forty percent of global merchants described cart abandonment as at least somewhat of an issue for their business, according a Paysafe 2021 survey. Of these, 12% said it was a significant issue.
Like Hollister, many fintechs have introduced solutions to combat cart abandonment: Sezzle targets shoppers ready to abandon their cart with messages offering its installment options. And Revolution recently launched one click payment to streamline the payment process.
The Share2Pay opportunity: The solution can help Hollister increase conversion rates, which will be important as the holiday season begins. US retail e-commerce holiday sales expected to reach $239.26 billionaccording to Insider Intelligence’s eMarketer forecast.
If the solution proves successful for Hollister, Abercrombie & Fitch will likely roll it out to its other brands, which should help boost overall sales volume. Later, Hollister could license Share2Pay to other retailers, opening up a new revenue stream for the company. Payment providers can also replicate Share2Pay to better serve their customers.