Online retailing or eCommerce is growing steadily fast in the country. The number of online retail stores have increased rapidly since 2013 and The Visa eCommerce Monitor 2014 reveals that 58% of online buyers value convenience, price (47%) and deals (46%).
With increasing competition in the online retail industry, stores need to gain more buyers and one best strategy discovered so far is through the Cash on Delivery (COD) payment system. Cash on Delivery is a sale of goods via online purchase where clients only pay for the product upon the receipt of their order.
Here are three main reasons why you need COD as a payment and delivery option:
1. Wider market reach and penetration
Studies show that 9 out of 10 Filipinos prefer online purchasing and that payment is usually through electronic banking. However, only 20% of Filipinos have bank accounts so that is just 2 out of 10. Therefore, online banking as a payment option applicable to limited number of people.
COD allows potential clients without bank accounts, who are majority of the population, to buy from online retailers. Lazada.ph is currently no. 1 in online retailing with market reach that swelled up to 40% in 2013 due to this payment scheme. And if online sellers aim to boost their client base, they better catch up with the trend immediately.
COD also saves the clients more money because it prevents them from paying extra 1-2% in credit card interests.
2. Strengthened Client Trust
In choosing online store, 45% of buyers considers payment security and 30% of them prefers Cash on Delivery because it is so simple. Remember 58% convenience? It does not require bank transfers thus, prevents doubts regarding online fraud or scams.
I am sure we are aware of the news about online sellers who just disappeared after getting their client’s money. Recently, there was a woman who already paid her online seller but never got her product delivered. And this guy just disappeared.
There was also this guy who bought a new gadget. He paid for it before getting the product and guess what, when the “product” arrived, the box contained just a photo of the gadget he paid for! There was no way he could reconnect with the seller.
These events scare most people and stop them from purchasing online. COD helps you assure clients that you are not an online scammer and that their transactions with you are legal and secured. COD protects online sellers, too. Unless the clients pay, the product would not be handed to them.
3. Heightened product quality and consumer satisfaction
Part of the COD agreement is that a client can inspect the product before acceptance and payment, hence, allows them to return the products if found damaged. It strengthens client-seller relationship because it gives clients the feeling of importance and allows for the seller to better their services.
Delivering the product in good condition, that is, not tampered with or the exact model, color or size, is proof of a professionally managed Online Shop.