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Are Security Concerns Driving Cart Abandonment?
Cart abandonment is one of the top challenges plaguing e-commerce, as executives are well aware. More than 84% of retailers had tracked cart abandonment on their website in the past six months as of September 2022, according to a survey by Coresight Research. But what actually drives abandonment?
One of the top answers may be security concerns, according to a survey by Radial. Radial found that 48% of cart abandonments can be tied to the security of the website being shopped on, while shoppers’ concerns about the use and security of personally identifiable information (PII) accounts for another 45%.
This makes sense, as consumers are increasingly aware of the value of their data and protective of how it gets used. A study by the University of Bristol found that 96% of consumers would like to prevent their personal data from being shared by retailers for commercial gain, and it’s unlikely that they’d be happier with that information being stolen by unidentified third parties. Consumers are willing to share their data for clearly defined benefits, but they don’t want it released into the wild.
The Radial survey also found the security measures consumers value most, which could help ease their concerns:
- A strong password for online transactions (50%)
- Two-factor authentication (32%)
- Verification by Visa/Mastercard SecureCode (37%)
Implementing tools like these could prevent fraud and data leaks and help build loyalty by reassuring shoppers that they can trust your site.
But security isn’t the only cause of cart abandonment, which Coresight estimated could be overall as high as 74% to 77% for the retail industry. That study found the top reason for cart abandonment to be extra costs, such as shipping fees or taxes, at 43%. A study based on data collection by the Baymard Institute put that total at 48%.
Friction is another significant cause. For instance, shoppers want their payment preferences to be represented among a retailer’s checkout options. Radial found that 58% of consumers say that having multiple payment methods is an essential factor when they select an e-commerce brand. Additionally, 26% of respondents cited lack of alternative payment methods as a reason for abandonment in Coresight’s study.
Complicated checkout processes in general were enough for 25% of consumers to abandon their carts, according to Coresight. One remedy for this problem is having shoppers signed in — logged-in consumers had a 36% higher conversion rate than guests — but that adds the wrinkle of asking customers to log in during their shopping journey.
Clamping down on cart abandonment can be a tall order, especially with so many different factors potentially causing consumers to walk away. Retailers will need to tackle the problem on multiple fronts to truly make progress in this area.
Discussion Questions
DISCUSSION QUESTIONS: Can any one cause be pinpointed as the primary, or at least the largest, cause of cart abandonment? What can retailers do to fight such a multifaceted challenge as cart abandonment?
Poll
Loading …BrainTrust
Gene Detroyer
Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
Jeff Sward
Founding Partner, Merchandising Metrics
I personally abandon my cart if I can’t use PayPal or ApplePay. Why? Because I haven’t memorized all my card numbers (they get changed too often) and I don’t sit with them by my side every minute. To me, 2 factor authentication is worse, because then I’ve likely gotta go get my mobile phone, read the text message and enter the numbers. It’s a PITA. Besides, given the frequency of data theft, the easiest thing for me is not to expose my card #’s to too many retailers or other merchants. I feel very strongly about that, and if it’s 9 PM at night, and I’m trying to order from not-Amazon, and they don’t really take PayPal, I will absolutely abandon that cart and find someone else who does.
I suppose that’s a security issue at root, but I find 2-factor authentication annoying, and really would prefer not to have my card #’s splattered all over the universe.
And yes, those Avett Brothers tickets I was ready to buy at $350 each, got abandoned when fees took it up to $550 a ticket at checkout. Buh-bye.
Agree with you on the convenience of ApplePay, Paula. With 2FA I love Apple’s function that automatically pulls codes from text messages into the right field. Though you have to be using your cellphone or have iMessage set up on your computer/laptop to do that!
I am at the exact opposite end of your spectrum. I am likely to abondon the cart when PayPal is the only option.
Two-step authorization gives me great comfort.
Part of the reason for car abandonment may be that it’s just so easy. I bailed on a cart the other day by persuading myself that another round of markdowns was imminent. It’s a summer item and the clearance process is under way. Yes, I risk that the item may sell out. I may also save another $20. That’s the nature of highly discretionary items. If I get it, great. And if I don’t, oh well. If I’m shopping in person, the decision has a higher threshold. I’m holding the item. It’s real. I like the fabric, the feel, the fit. There are no unknowns. It’s real. And I might not be back in that store for another week, or month. But if I’m shopping online, it’s nowhere near as real. There are unknowns. And I can check back every day or so, and in less than a minute. Real vs not real. Knowns vs unknowns. Physical retail does have its advantages.
I am surprised security concerns come up first. We have been compromising our data for years now. Sure, we talk about it, but we go everything away to shop or browse the internet.
I believe friction of any sort is the biggest reason. It could be a complicated process, surprise charges, or providing PayPal as the only option for payment. I imagine the major online merchants (Amazon, Walmart, Target) have much lower abandonment rates than the less experienced merchants.
The biggest problem in our household is us. We sometimes get distracted before checkout and forget to return, thinking we already ordered.
Mr. Retailer. Please send me an email reminding me I have an open cart.
I’m with you Gene, and it’s unclear how the study reached its conclusions; presumably they have access to data as to exactly WHEN the abandonment occurred and deduced accordingly. As for the 2FA, I don’t recall having encountered that while paying online (guess I don’t get around much!)
The “complicated checkout process” has no business in today’s online world. Retailers who sense this problem—and their are plenty of tools to identify this in real time—need to address it today. First, use benchmarks and best practices to create a model, then make sure to understand what shoppers already like about your checkout experience and make sure to keep that intact.
All of the other cart abandonment issues involve several more moving parts, so address the low-hanging fruit first: What do I want the user experience to be? And how can I make the process as intuitive as possible?
Given that Amazon, Walmart, and Apple have about a 50% share of online commerce, I doubt that privacy concerns is the cause of cart abandonment to any significant degree. Also, remarketing (advertising to those who abandoned carts) is known to be highly effective. Why would it be that privacy concerns vanished? My feeling is that online encourages cart abandonment because there is little “cost” from abandoning a cart. You didn’t do much work like you would in a physical store. It is more likely that people add things to their cart as a way of remembering items that were interesting to them that they might want to return to. With an immediate purpose of remembering rather than purchasing, it would manifest as shopping cart abandonment.
Cart abandonment is a key concern for online transactions and it is something retailers monitor and manage closely. I was surprised that security was the number one issue, as if they are concerned with the ecommerce website security, it seems like they wouldn’t even start a purchase process. It seems like higher than expected shipping costs or other fees would be the most common cause for cart abandonment, at least it is for me.
Right. The shopper is very concerned about security until they shop.
It was interesting and instructive to see that three of four people who complete the Poll said they abandon an e-commerce purchase either because additional fees appearing at the last minute and completing the transaction is too complicated. I agree with and have had experience with both.
I don’t think any one of these factors are primary. Cart abandonment exist because it is so easy, and people use carts and shopping lists (I know I do). Method of payment is obviously a factor and it is very personalized.. That’s why App-based shopping works for retailers because you can’t shop without logging in most of the time. I am frankly thinking that we need nuance of how we calculate cart abandonment. Simply because an online cart wasn’t sold in the same session, is it really abandoned?
Having been involved in Cart Abandonment Strategies in prior roles, payment security has always been among the top causes…but not THE top cause in my experience. Shipping costs, or other unexpected fees, followed by shipping time, have been the historical top causes of Cart Abandonment.
Payment security concerns harken back to the early days of eCommerce when the idea of giving your payment information to a computer seemed like a scary proposition to consumers. Security measures today have advanced significantly, and too the point that I rarely hear of it as a top cause of cart abandonment. Most card servicers provide some degree of purchase protection coverage in the event that a card is used fraudulently.
Cart abandonment rates are not only caused by security concerns, but mainly because of a “breaking point” within the consumer journey. With the myriad of eCommerce options customers can access today, they’re looking for a convenient, personalized and frictionless shopping experience. A customer may abandon their cart at any point in the experience if it doesn’t meet their expectations; too many pop-ups, a poor search experience or a lack of payment options at checkout, to name a few.
Brands can take many tactics to decrease their cart abandonment numbers, starting with evaluating their eCommerce experience to identify pain points in the customer journey and then addressing them. For many brands, this includes a poor search and recommendations experience. Customers expect to reap the benefits of all the data they share. When a search query doesn’t come back with accurate and personalized search results, they will move on to a competitor.
Roland, I agree. If the shopping experience isn’t seamless, it frustrates customers and leads to cart abandonment. It also results in a trust breakdown between the customer and the retailer. As we all know, consumer trust is difficult to regain once lost.
In my opinion, security concerns should be the last reason for cart abandonment. Rather, it is the checkout or payment process that often frustrates customers and leads to cart abandonment. While shopping over the phone has become increasingly convenient, the hassle of entering credit card information for every purchase can be cumbersome. It is evident that customers prefer the option of guest checkout, as they find it more appealing than having to create an account on each website they visit for shopping.
Customers are more likely to reduce their cart abandonments if they are offered a convenient payment method for guest checkouts. Checkout options like “Shop Pay” make mobile payment incredibly simple for all Shopify retailers. Furthermore, the “Apple Pay” checkout process can be finished with just a few clicks, without the need to set up an account.