With the well-reported increase in online sales caused by the pandemic, it comes as no surprise that CBD sales also moved to ecommerce channels last year.
A survey by Brightfield Group from June 2020 found that 45% of CBD consumers and 54% of millennial consumers shifted to purchasing CBD online due to the coronavirus crisis, according to Hemp Benchmarks, a data provider to the North American market. Charlotte’s Web, a market-leading creator of hemp supplements, reported that online sales grew 27% in 2020 and amounted to 67% of the company’s total sales.
If you’re a CBD retailer or distributor and don’t yet offer online sales, it’s time. If you’ve already implemented ecommerce, it’s time to review your website and take it up a notch or two.
Fueled by the ease and convenience of the Amazon experience, customers today expect to see the same fluidity and simplicity with ecommerce. That means you need an online presence that allows them to find what they want, when they want, and enables them to pay how they want. And because a larger number of legitimate payment processors are beginning to serve the industry, the ability for CBD businesses to accept card payments has grown just in time to take advantage of online sales.
Following are 11 strategies to help you make the most of your website for ecommerce – whether you’re just beginning or want to improve what you already have. And as you venture into or increase your ecommerce capabilities, you also need to be aware of payment card fraud, so you’ll find tips here, too, on how to help prevent it.
If you’re starting ecommerce sales from scratch:
- Select a payment platform that integrates with your website and enables you to start selling and make updates rapidly. Such products can offer features such as customizable templates, an integrated shopping cart, secure payment pages, mobile apps, and online marketplace integrations.
- Ensure that your search function is configured correctly. Customers need to be able to find what they want on your site quickly and easily. Is your search function highlighted on your site? Is it easy for customers to key in words and find what they want? Auto-complete and filtering also should be available.
- Accept a wide range of payment methods. Offering multiple payment methods can boost sales – in some cases, by nearly 30%, one study showed. Sellers that accept four or more payment options bring in seven times more annual revenue than those offering fewer options. Make it easy for customers to pay you with their preferred method by accepting multiple payment methods that include all major credit cards and debit cards and ACH payments.
- Promote those payment options early and often. Advertising your payment acceptance methods is important in all cases, but particularly in the CBD industry. Due to high-risk payment processing issues, credit card acceptance hasn’t been pervasive in this sector, so promoting it will attract new customers and larger purchases. In addition, promotion can help increase sales when you accept options that might not be as common. For example, American Express is not as frequently promoted as other cards, but AmEx cardholders typically spend more than others, according to the company’s research.
- Set up a simple checkout process. How many times have you put an item in your shopping cart, started to check out, and given up because it’s cumbersome and complicated? Too many times, at least as far as merchants are concerned. Several common checkout practices get in the way of a completed sale: requiring registration before purchase, re-entry of payment details, and complicated, multi-page forms. Instead, allow for guest checkout, make it convenient for customers to access stored payment data, and limit the number of clicks and pages in your checkout forms.
- Build trust with your buyers. When customers fill out forms to complete transactions, they’re trusting your organization with their personal information, including credit card or bank account details. But given the data breaches of recent years, some are understandably hesitant to provide such sensitive data, and you may lose sales as a result. Trust signals can help.
If you’re ready to take online sales to the next level:
- Make sure your website is optimized for mobile. According to Statista, mobile devices accounted for almost 55% of website traffic in the first quarter of 2021 and a significant percentage is made up of B2B buyers who research and purchase products. So whether you are selling to a business or a consumer, if your site isn’t mobile-friendly, you will lose business.
- Add features that make learning about and buying your products easier. Search functionality and a shopping cart are basics. But how about a gift list? Testimonials and reviews? FAQs? All of them will make research and shopping easier.
- Implement online chat. Instant communication while a customer is visiting is becoming more important every day. Chatbots (a computer program that simulates and processes human conversation) can qualify and route requests accurately and conveniently, just as if you were writing or speaking with a real person. Third parties can monitor your chat during and outside business hours to supplement your manpower.
- Research which online platforms allow you to promote CBD products. Because the payments landscape is constantly changing, you’ll need to check whether online marketplaces allow CBD sales, and, if so, make sure you comply with any product and marketing restrictions. If you find that your business qualifies, integration with such marketplaces allows a business to set up an online store to sell goods. Webstore platforms offer built-in options to integrate in just a few clicks. You can customize your storefront, accept credit card payments, and track and respond to orders. You also can link back to your own website if customers want to investigate further.
- Improve page load times. According to Visual Website Optimizer, ecommerce shopping cart conversion rates drop 7% for every 1 second delay in page loading, costing billions in sales. Checkout pages that are slow to load practically beg impatient shoppers to take their business elsewhere. Your images should be sized to maintain the crucial balance of quality and speed. You also can limit the use of ad network trackers, poorly implemented tags, and social plugins.
Preventing Online Payment Fraud Is Critical for CBD Merchants
A foray into ecommerce means merchants need to increase their awareness about online payment fraud and how to prevent it. Online credit and debit card losses come from merchandise shipped and never recovered, refunds to scammed cardholders, and chargeback fees for processing fraudulent purchases. Even worse than the financial losses themselves is the possibility of a merchant ending up on the MATCH (Member Alert to Control High Risk) List, a database of terminated merchants maintained by Mastercard Worldwide.
There are a number of reasons why merchants are named to the list, and data breaches and excessive chargebacks are two of them. Acquiring banks are required to check the MATCH List before signing a processing agreement with a merchant, and most acquirers will reject any merchant on the list.
That means merchants lose their ability to accept payment cards – a major blow to any ecommerce business, but perhaps even more so to CBD merchants, who already have something of an uphill battle to establish merchant accounts and payment processing. At best, a small number of providers will extend processing services at significantly higher rates to sellers on the list.
Once on the list, it takes five years to drop off, so establishing measures to fight fraud is critical. Here are four ways you can do your part:
- Enable Address Verification Service (AVS) on your merchant account. Address verification checks addresses provided at the time of sale against addresses that cardholders have on file with their issuing banks. If addresses don’t match, the true owner might not be presenting the card.
- Maintain PCI compliance. PCI compliance means following the Payment Card Industry Security Standards Council rules to protect customer payment card data. Maintaining payment security is required for all entities that store, process, or transmit cardholder data, including merchants.
- Require a CVV for online transactions. The Card Verification Code (CVV) is the 3- or 4-digit code on every credit card that acts as an added security measure when cardholders pay online. CVVs verify that they are in possession of a physical card and should never be stored in a database by a merchant or payment processor.
- Flag large transactions. With stolen card information, fraudsters will take a shot at making large transactions before the card is reported stolen and blocked. If you allow a fraudulent transaction, you may have to bear the cost, depending on the circumstances and the card brand. In addition to using fraud deterring tools like AVS and CVV, you can limit the number of large transactions by specifying a ceiling for the amount you’ll allow any one customer to charge.
Ecommerce Is Here to Stay – And So Are CBD Sales
The brick-and-mortar store isn’t dead, but online sales certainly are here to stay – and grow. Estimates indicate that ecommerce will bring in more than $843 billion in sales this year, up another 8% over last year, IBM said in a recent U.S. retail report.
And the CBD market will continue to grow, too, researchers say. The global CBD market was valued at $2.8 billion in 2020 and could increase to as much as $13.4 billion by 2028, according to a February 2021 report from Grandview Research. Any business serious about CBD sales needs to get serious about ecommerce to attract new customers and get their share of this rapidly growing market.
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