Why the “Checkout as Guest” Button Is Holding You Back

November 1, 2021

The Bolt Team

To compete with the marketplaces we discussed in part 2, specifically their easy single-click checkout experiences, brands have long offered a “checkout as guest” option, which seems like a no-brainer. Customers understandably don’t want to create a store account everywhere they shop, and simply offering guest checkout can increase conversion rates by 45%.

However, guest checkout carries a steep and somewhat hidden price.

Anonymized Customers—Even Return Customers

A huge portion of customers will take you up on your “checkout as guest” offering if it’s available. They don’t think twice about it; it’s just easier than remembering yet another password. However, the impact of that decision is momentous. For the brand, every best practice, every hard-won customer insight, every personalization technique goes out the window when shoppers choose guest checkout.

Personalized Shopping Suffers

Personalized shopping experiences are only possible by knowing who your customers are when they reach your site. Iconic brands already know more about their product categories than anyone else. However, to unleash that latent power, they also need to know who a prospective shopper is. When customers “checkout as guest,” brands lose valuable information. If you don’t know who your customers are when they arrive, you’re fighting the battle with blinders on.

Loyalty Programs Are Rendered Useless

When merchants are stripped of customer information, the opportunity to encourage loyalty through special promotions is lost. That’s huge: 77% of consumers say they are more likely to continue doing business with a brand when they’re a loyalty program member. Such engagement programs reinforce reciprocity, encouraging repeat business and positive word-of-mouth referrals.

With 63% of consumers modifying their spending to maximize loyalty benefits, a huge opportunity to impact customer spend is lost when loyalty program engagement efforts are thwarted by guest checkout.

Customer Lifetime Value (LTV) Diminishes

Discrete transactions are great, but brands must maximize the lifetime value of customers to flourish. An anonymized “checkout as guest” transaction leaves no opportunity to build trust with your customer, and trust is the primary factor driving purchasing behavior. What’s more, this anonymization makes it impossible to calculate an even remotely accurate customer LTV.

Don’t Remove “Checkout as Guest”—Just Make It Better

The answer isn’t necessarily to remove the “checkout as guest” option; it’s to replace it with something much more powerful and convenient for the customer. We call it identity-powered commerce.

Explore all of the pillars of identity-powered commerce and learn how to improve your customer checkout experiences in part 4.

ThinkShop by Bolt does not constitute professional tax or financial advice. Contact your own tax or financial professional to discuss your situation.