Shopping cart abandonment is a major online shopping phenomenon that is only growing with time. While some 62% of carts were abandoned in 2011, this jumped to 67% in 2012 and some sources report as high as 73% in 2013. That’s means the vast majority of shoppers do not follow through with the online purchasing process. Overall it’s estimated that some $13 billion in sales are lost annually due to shopping cart desertion. Why does this happen?
Studies cite a number of reasons for shopping cart abandonment. The most popular by far is the discovery of extra costs at the checkout, such as expensive shipping costs or sales tax. Next in line are those who say they were just browsing. Note that it’s very rare for a consumer to buy from an online site during the first visit (only 1%!). These causes were followed by more cost considerations including those who found a better price elsewhere and those who found the total cost to be too expensive and decided against buying. Further down the list are technical reasons such as complicated websites, website crashes and overly long processing including security checks. The smallest group of causes dealt with payment issues: prices were displayed only in a foreign currency, worries over payment security and payment method refusal.
If online retailers want to recoup even a fraction of this enormous lost income they must make some major changes in the manner they market online. These changes can be both pro-active in order to prevent shopping cart abandonment from occurring, as well as reactive to recoup a loss after abandonment has already occurred.
Preventing Shopping Cart Abandonment Pro-Actively
Offering free shipping is the single best way to prevent shopping cart abandonment. While online retailers have been slow to catch on, they’re learning quickly. At the beginning of 2009 only 37% of online sales were eligible for free shipping. Just two years later this jumped to 47%. Some 20% of consumers say free shipping is the main reason they shop with a particular retailer and many retailers now offer free shipping on every sale. Almost 40% of consumers say they deliberately purchase enough to be eligible for free shipping. At the very least, consider lowering your free order threshold by some 15%.
Prominently display your security logos so buyers are reassured that their credit/debit cards or other payment methods won’t be compromised by buying online. This simple action has been proven to increase sales by some 5%!
Display Foreign Currencies
Since many sales are now via international orders it’s important to show what the cost will be in the consumer’s local currency. This is a simple enough addition that can track the buyer’s IP address to determine what currency they are likely to prefer. Some online stores even go as far as to ask the consumer directly.
Inbound phone calls are 10-15 times more likely to convert than inbound web leads. You should therefore display a toll-free telephone number or chat box option so consumers can talk to service personnel and get direct answers to any questions they have about the product, delivery method or payment process.
Simplify payment by minimizing the checkout process, offering multiple payment options, eliminating hidden charges and making cart editing easier by providing a link to the shopper’s cart on every page.
Even if the cart has been abandoned the game is still far from over. In fact, there is a very good chance you can recoup the sale if you handle the situation properly.
Retargeting works by following a consumer out of your site and into the next site they visit. There it places an ad with the same or similar product in order to draw them back in. For retargeting use banner ads, sidebar ads or videos. Inside the ads make sure to highlight your customer satisfaction policies and over the phone sales support.
Less than 20% of online marketers use recovery emails. This is despite the fact that conversion rates via recovery emails are significantly higher than other email marketing programs. They often reach over 20%! A successful recovery email should have images of the selected products as well as product reviews, a single call to action and a phone number to call for more information. For maximum effectiveness send an initial email immediately after the cart has been abandoned. Follow this up with a second email 24 hours later with an offer of a 10% discount and a third email a week later with a 20% discount offer or free shipping. Keep in mind that discounts should be used sparingly though, so as not to boomerang against retailers.
Did we miss anything? What do you do to remedy shopping cart abandonment?