Consumers Abandoning Carts Online
Consumers have always bailed out and abandoned
shopping carts online but recent reports are putting numbers to the cost
of this problem for websites that fail to close the deal with their customers.
According to an e-tailing group survey, 60 percent
of online retailers are seeing shopping carts abandoned by 20 percent of
consumers on their websites this year.
Another study by PayPal and comScore found
that 45 percent of online shoppers in the U.S. had abandoned shopping carts
on multiple occasions in a recent three-week period. The average value
of abandoned carts was $109.
With the numbers clearly suggesting an upside
to reducing the number of carts being abandoned, it begs the question, “Why
are consumers opting not to buy?”
According to PayPal and comScore, high shipping
fees is tops on the list of why shoppers leave carts behind. Forty-six percent
of those surveyed, eMarketer reports,
said the high cost of shipping was a “very important
reason” in their decision not to go ahead with an online purchase. Consumer
wanting to comparison shop was ranked second at 37 percent.
Other factors behind abandoned shopping carts
included:
- A lack of money (36 percent)
- Searching for a coupon (27 percent)
- Choosing to shop offline (26 percent)
- Not able to find preferred payment option (24 percent)
- Item out-of-stock at checkout (23 percent)
- Inability to locate customer support: (22 percent)
- Security concerns (21 percent).
"Sweetening the deal with free shipping, coupons and special discounts
is a great way to encourage online shoppers to complete their purchases," Eddie
Davis of PayPal, told eMarketer.
Discussion Questions:
Do you think the rate of abandoned shopping carts is rising or are these
studies measuring blips in consumer behavior? What are the most effective
steps retailers can take to reduce the number of abandoned carts?
I wouldn’t be surprised if more consumers are abandoning shopping carts. Online shoppers are getting more sophisticated, and some of the reasons for abandonment noted in the article show it: looking for coupons or discount codes, for example. I was recently at a networking event where the discussion turned to personal online shopping habits. Only one person in the group did not search for coupon codes before making an online purchase, and he was promptly hounded and harassed for missing out on an opportunity to save money. I guarantee he does it today.
But there are definitely still sites out there that haven’t caught on to eCommerce basics: don’t wait until the checkout process to inform a customer that the item is out of stock. Don’t let shipping costs give a customer sticker shock at the last minute. Don’t make them feel locked into a process they can’t get out of when they start down the payment path. And give them alternative means to “store” or “compare” products, like wishlists or sharing mechanisms, so that the shopping cart only gets used for its intended purpose.
Ultimately, it’s not really the absolute numbers that matter, it’s whether you’re trending up or down in shopping cart abandonment rates, and making sure that you have the tools to identify root causes and address them.
This is a huge cost, but certainly not a surprising one in the current economy. We see the same behavior in stores as shoppers put products aside in piles at the register as they checkout amount tallies.
Retailers can help reduce this partial checkouts and the costs associated by having more candid conversations about both value and price throughout the shopping process, whether online or in-store. Surprises are not acceptable in today’s world. Providing totals, communicating taxes and shipping throughout the experience. Most important: sell the product assets and real benefits, not just the SKU, to help shoppers understand why they need to close the sale.
As long as there has been eCommerce, consumers have abandoned shopping carts. This is not new and certainly not surprising. We advise our online clients to put shipping fees upfront, with full information (when offering free or flat rate shipping) on their home pages. E-retailers should make it easy for consumers to find price information. Comparison shopping is the norm, not the exception, so make it easy for customers to see the cost of goods.
Providing all cost information clearly and easily, etailers can reduce the number of abandoned shopping carts. Abandoned carts won’t go away, but customers will be happier.
Shopping cart abandonment can be examined from several perspectives. But importantly we have to know if the retailers are concerned about the abandoned shopping carts. Do they accept 20% as they do a certain percentage of shrinkage?
Right now, most website initiatives are focused on search engine optimization to insure visits. Build it and make sure they come is the idea. How well the website is built is not a huge concern for retailers as they believe they can modify the website for very little investment and try again if the metrics don’t align with revenue goals. The analytics which describe the behavior in this article don’t refer to website effectiveness.
Website effectiveness is based on four factors:
1. Motivation – the reason the consumers comes to the website (to buy, to explore, to amuse)
2. Expectations – the shopper’s past experience with retail websites and what they expect their experience to be on this website
3. Content – the details on the website of product, price, shipping, etc. and
4. Navigation and Design – to what extent the website fosters intuitive behavior for consumers to achieve intended goals.
When I conduct website effectiveness research, my clients learn the rest of the story, giving them guidelines to improve effectiveness which align consumer and retailer goals at the website.
It’s fundamental to understand consumer wants and needs when executing a marketing strategy. I think of websites as part of the marketing strategy. The individual website does not have to be the weakest link.
I can see how more shoppers would be abandoning their carts. All of the reasons listed resonate with me, particularly shipping sticker shock. Also, striking that perfect balance of simplifying the cart-building and checkout process without rushing folks along is no easy task yet you know it when you’ve experienced it. I like having easy access to my cart throughout the shopping process and the ability to pop back into shopping mode on a whim. I’ve been known to ditch when those two processes become too tedious.
Also, SKU and brand rationalization may be much maligned on the brick and mortar side; however, some websites could use a bit of editing (Zappos comes to mind). Sometimes the “endless aisle” is a bit too endless.
There should never be a surprise when an online customer gets to check-out. There can only be two reasons for that. The first is the online retailer’s ecommerce site is poorly executed. The other is that the internet retailer is hiding information (such as shipping fees) thinking that by the time the customer checks out, they are already committed to the purchase.
Personally, I find the biggest reason for abandoning a shopping cart is technical. Many of them don’t work very well. That was the case a few days ago, where upon the 3rd failure of the site to put all the items I wanted into the cart, I just left.
Unfortunately, more and more companies are coming online and they haven’t thought through the shopping process, which includes check-out from the shoppers’ point of view.
I was surprised not to see much mention of ‘below manufacturer’s minimum pricing’ as a culprit. To avoid getting caught pricing items below manufacturer’s minimums, retailers use a ‘see price in cart’ function. This prevents manufacturer’s software from easily catching their pricing. So, of course more consumers are abandoning their carts–they only put items in the cart to find out the price.
All the comments so far are spot on. 95% of all our problems are self-inflicted wounds and that’s true here too. In my experience it’s the simple things that cause abandonment. Like hiding the cost of the product until you’re ten pages in; using shipping as a major profit source (“get a second one free, just pay additional shipping”); and the lack of seller identity – like an address or phone number. We can’t forget that people do business with people!
And then some of my biggest complaints aren’t even on the list like: asking for irrelevant information; poor product information; and industry jargon no one else understands.
Too often, both websites and shopping carts are designed for the convenience of the vendor. The best question to ask is: Is this experience shopper friendly?!
Online consumers are only interested in a very small bag of ingredients. When put together, this bag holds what is considered to be “THE BEST DEAL” for the desire or need.
Online shoppers will spend hours and days looking to get “exactly” what they want at lowest total secure price. Substituting older obsolete versions of inventory and/or accessories is a problem that consumers are aware of and look to avoid. Adding high shipping charges will null the deal in an instant. Any sign, perceived or implied, of unsecured sites or improprieties will also terminate the process at once. A typical transaction will see 2, 3 or more test transactions terminated at the door step because of the must-see details found downstream of “Add to Cart.”
Competitors and Competition Service companies visit and test sites 24 hours a day, every day of the week for pricing info. I have no doubt that if this alone was to stop, a large portion of the abandoned-carts issue would be gone for good. The next, most effective means to reduce the numbers would be to include all merchandise descriptions and charges up stream of “Add to Cart.”
Shopping cart abandonment has been an issue since the beginning of e-commerce. Has there been an increase in this problem since the economic downturn?
Without the romance of the in-store merchandising, music and sales people, shoppers may be more likely to have second thoughts about spending money at all. Lack of payment options and online support may be easier to fix than a deeper-seated reluctance to indulge one’s self in this environment.
Many of these points are valid, but one that I did not see mentioned is purely technical. As more people become connected via broadband, it simply becomes so convenient to jump online and “look around” that people are often just using the online stores as a means of entertainment. When it comes time to buy they will go down to their local outlet and bring their purchase home with them.
Is cart abandonment really a bad thing? Maybe its a good thing. Cart abandonment in a real store is a BAD thing! But in e-commerce, it’s different. People are researching, people are navigating, people are comparing, people are chatting…all leading to very quick changes of decisions and very simple re-entry when a decision is finally made.
Sites should encourage cart abandonment (or cart suspension); it’s to be expected. It’s just so easy to start and stop, and change directions in this environment that it’s part of this new world. That is not to say that some e-commerce sites will do a better job overall and have higher conversion rates, but overall, as long as online sale continue to increase and e-commerce sites do a great job of check-out and ability to suspend a transaction, I think cart abandonment is a somewhat less important stat and just an important reality in this new environment.
The shopping cart abandonment problem is the result of poor communication by merchants. I often abandon carts when I find that information regarding product pricing, shipping, taxes, etc, is not spelled out in plain English by a merchant. When a merchant sends me an advertisement via email and the only way I can find out the delivered cost of an item is to put the item in a shopping cart then the merchant is asking for trouble. If merchants were above board and did not try an play with the consumer, then this problem wouldn’t exist.
Merchants should learn that messing with people will cost them money in the long run. If you don’t want abandoned carts, then find a way to provide all the information a consumer needs to make a buying decision before the cart is created. If your site forces consumers to create a cart so that information can be obtained then what you think is a “cart” is viewed by the consumer as a decision matrix and you will loose more than you will gain.