Working hard to gain visibility, attract potential customers, and motivate them to add items to their cart only to see them ultimately abandon it is despairing. Referred to as “shopping cart abandonment,” a measure arrived at by dividing the total number of shoppers who actually purchased by the far larger number of those who merely put something into their cart, it is a critical indicator of website performance.
A September 2006 MarketingSherpa.com article presented the results of a shopping cart abandonment survey study of 1,100 e-commerce marketers. The average reported cart abandonment rate was 59.8%. Roughly one out of every two visitors who adds an item to their shopping cart ultimately abandons it instead of completing their purchase.
This alarming statistic amplifies a call to action for e-commerce businesses to use effective marketing strategies to streamline and optimize their ordering processes. By analyzing the leading causes of shopping cart abandonment, we discover that all involve a lack of effective conversion marketing strategies. Some of the top reasons for abandonment are:
- Window Shopping: consumer adds items to their cart to determine the total cost of buying (e.g. tax, shopping and product costs). The Internet makes comparison shopping easy, with visitors adding items to their cart, abandoning them, but potentially returning later after further comparison shopping on other websites.
Based on a study by ScanAlert presented in “Internet Retailer” (March 2005), consumers perform shopping research before buying, which causes a time delay between initial visit and actual purchase.” Based on the aggregate totals from these studies, the average time delay between a consumer’s first visit to a website and that consumer’s first purchase was just over 19 hours. 35% of shoppers took more than 12 hours to make a buy decision, 21% took more than three days and a full 14% took more than a week to decide to buy.”
- Confusing Process: consumer is intent on buying, but can’t determine how to complete the checkout process.
- Frustration: consumer becomes impatient waiting for a checkout page to load, being requested to provide a great deal of personal information, receiving a form error message but not being able to figure out what was in error, or has been retuned to the form to find their original data cleared.
- Privacy, Safety and Security Fears: consumer is concerned with providing personal information, including their credit card. A lack of confidence and trust in an e-commerce business is a sure sign of shopping cart abandonment, especially with the rise of malicious phishing, spam, identity theft and other fraudulent activities.
A Forrester Research study from October 2005 titled “Rethinking the Significance of Cart Abandonment” identified the top six causes for abandonment as follows:
- I didn’t want to pay the shipping charges – 57%
- The total cost for the purchase was more than I thought it would be – 48%
- I used the shopping cart for research – 41%
- I didn’t want to wait for the product – 19%
- I purchased my product or products offline – 18%
- The checkout process was too complicated – 15%
- Other – 12%
Although the rate of abandonment is alarming, the opportunity for improvement is significant. This involves identifying and implementing effective conversion marketing strategies.
Here are a number of proven strategies to help reduce shopping cart abandonment.
1. Disclose Shipping and Sales Tax on the Product Pages
Reveal the total cost of ordering prior to the checkout process. The product’s cost is only one factor in a buyer’s decision process. They also want to know the shipping costs and if taxes are associated with their order. A recent study of consumer insights showed that shoppers expect to pay equal or less for a product on the Web than at a traditional retail location. They also do not expect to pay for shipping or to pay a minimal shipping rate as a percentage of the product price.
Communicating even estimated shipping and tax costs helps the shopper frame their buying decision. By revealing all of the costs associated with their order prior to checkout, we reduce abandonment. Also, using effective marketing strategies like free shipping with conditions (e.g., free shipping on orders over $40) helps increase the visitor-to-sales rate.
The shopping cart technology employed directly affects if and how shipping and tax estimates are revealed. If an actual shipping or tax cost cannot be communicated, then present an estimate based on the average shopper. Supplying some cost basis enables a visitor to make an educated buying decision.
2. Offer Free Shipping with Conditions
Consumers don’t expect to pay excessive shipping costs when purchasing online. Whether or not this is a remnant of the dot-com days, it is the reality that e-commerce businesses must work within.
Promotions offering free shipping with conditions (e.g., free shipping on orders over $75) provide a great opportunity to reduce the shipping concern while helping you increase the average order size. Although adjusting shipping costs require careful financial analysis, the overwhelming feedback we have received from e-commerce clients is that a “free shipping with conditions” offer exceeded their expectations in profits generated beyond the cost.
3. Tackle the Registration Process Creatively
A growing number of e-tailers are moving to a multi-option registration process where they offer new visitors either a “guest” option (which allows them to avoid registration) or a registration option. The key point is to clearly communicate the benefits of registration ─ including order tracking, quicker repeat orders, notification of special discounts and (if applicable) automatic inclusion in a customer loyalty club.
If your e-commerce technology requires registration (and custom programming is not an option), then build it into the ordering process. If a customer perceives the registration process as an integrated step in the ordering process and not a separate, extra step, then the friction it creates is drastically reduced. In addition, add a “prefer to order by phone ─ call 800-xxx-xxxx” on the registration page to capture any visitors unwilling to register. Your customer service person can take the order and register for the visitor if necessary.
Ideally, if programming resources are available, integrate the registration process at the end of the purchase order. At that point, the customer’s information has been gathered and only a password is required to complete the process.
As noted in an article in CIO Insight titled “E-Commerce Performance Often Checks Out During Checkout,” a “guest checkout [where the e-commerce site gives customers the choice of registering, logging in, or doing neither and just making purchases directly on the credit card] is a key consumer perception driver” shown to reduce abandonment.
4. Show Product Availability
Communicate directly on the product page (or sooner if possible) whether the product is in inventory or out of stock. Do not force a visitor to add an item to their cart to later find that it is out of stock.
If an item is out of stock, communicate the expected time frame for its restocking. Consider the rain check procedure of traditional retailers. Offer to email your visitor a notice when the product is in stock and even offer a discount for their return and purchase.
5. Display a Delivery Time Frame
It is human nature to “want it now.” Help calm this emotional drive by providing a “standard” or “estimated” shipping date or time frame. Display the delivery time frame on the product page and in the cart. For example, a message like, “This item ships within 24 hours” has become a standard for e-commerce sites.
6. Request Email Address and/or Phone Early in the Checkout Process
Requesting the shopper’s email address or phone number early in the ordering process enables the implementation of a powerful shopping cart recovery email campaign.
A case study presented by MarketingSherpa.com in October 2006 stated that an e-tailer using auto-emails to extend a gift certificate incentive following a shopping cart abandonment achieved a 5.6% conversion rate from the shoppers who abandoned the cart initially. An incentive, or even extending a helping hand via a customer support phone number, is an effective recovery strategy.
However, the timing and sequence of the email is critically important. Ideally, send an initial email within an hour or so after the cart has been abandoned and a second “last attempt for recovery” email within 24 hours after the initial one. The tone of the email copy should focus on helping the shopper achieve their buying goal, not on selling them.
7. Define Calls-to-Action Clearly
As with the entire website, the checkout process must be intuitive. Make the “continue” button visible, instructional and separate from the administration buttons like “update” or “continue shopping.” Using a different color and larger button for the “continue” button is an effective way to ensure recognition and reduce “next step” confusion.
Be cautious of placing a “clear cart” button anywhere close to the “continue” (or checkout) one. In haste, customers may click the wrong one and inadvertently clear their cart contents. If you offer proper “edit” buttons, including a “delete item” and “update” within your shopping cart, then you may be able to eliminate a “clear cart” function completely to reduce any potential problems.
8. Clarify the Product Details in the Cart
Before completing a purchase, customers like to confirm and validate their selections. Provide the most important product details in the cart including sizes, colors, brand names, flavors, and quantities. Depending on your shopping cart technology, it also helps to display a thumbnail image for each product item.
9. Provide a “Save Cart” Function
Help consumers who are window shopping return to your website and easily purchase. Saving the added items in a consumer’s shopping cart provides you with the opportunity to contact the consumer to generate return visits, while making it easier for the consumer to complete their order upon return.
10. Add Security and Privacy Assurance
Visitors’ anxieties escalate as they near the purchase. Reduce these anxieties through placing assurances, including SSL security seals (like GeoTrust, Authorize.net, HackerSafe, ScanAlert or VeriSign), shipping, customer support, return/exchanges, guarantees and privacy policies on every page of the checkout process.
The location of these seals and policies on the page is critically important. A common misperception among marketers is that simply adding a seal or policy anywhere on the page will reduce abandonment. Shoppers possess a field of vision focused on their goal achievement and shopping behavior. Just because a policy or seal is on the page doesn’t mean it is seen and processed.
In today’s advertising-saturated world, shoppers have learned to selectively see and process what they believe is necessary for them to make a buying decision. Placing assurances close to calls-to-action and within white space helps increase their visibility. Building trust and ensuring safety are two key elements for influencing sales activities.
11. Ensure Friendly and Customer-Centered Error Handling
Customers have a lot bouncing around in their heads during the purchasing process; therefore, moving them quickly through checkout is crucial. Once they add their personal information to checkout, we should not ruin the momentum with poor error handling. If a shopper adds incorrect information or forgets to complete a field, clearly highlight where the error occurred on the page and provide instructions for correcting it. Definitely do not wipe out the information that is correct! Returning to a form to correct a missing zip code and finding out that the entire form requires completion again is a sure abandonment motivator.
If a customer’s credit card is denied, help the customer figure out why and contact them quickly by email or phone to correct the situation (if it is correctable). We highly recommend to our clients that they frequently review their credit card processing error codes to determine if their fraud-checking filters are denying legitimate buyers.
Overall, make error handling your problem, not the customers’.
12. Avoid Making Customers Complete Two Address Forms
Most shopping carts adequately address this strategy by allowing a customer to complete the shipping address form while checking a box indicating that their shipping address is also their billing address. However, some shopping carts practically hide the “same as shipping address” checkmark, rendering it invisible to the customer. Clearly present the “same as shipping address” indicator to ensure ease of use.
13. Offer Alternative Payment Methods
Some customers are just not comfortable with transacting online. By offering customers multiple payment methods including PayPal, phone, “bill me later,” various credit cards (MasterCard, VISA and American Express), fax and mail, we satisfy a greater array of shopping behaviors and comfort zones.
Consider the product type and how it is most frequently purchased. Small orders may be perfect for PayPal, while larger orders fit a “bill me later” payment method.
14. Define Shipping Methods
Give a shopper multiple choices for shipping, including an expedited option; however, don’t overwhelm the decision with five or six different alternatives. Think about the conditions surrounding the product or service and how shoppers purchase it. Some products are highly conducive to expedited ordering because they possess emergency, time-sensitive or other high-priority usage utility. Shipping for a stringent deadline event like Christmas demands a different shipping strategy to satisfy consumer intent than handling an everyday shopping experience.
15. Indicate Progress and Properly Label Each Step
Adding a progress indicator on each page of the checkout helps shoppers understand the commitment and time required to complete the order. Use easily understood labels, define the information requirements and give instructions for page completion.
16. Analyze Payment Processing Errors and Response Codes
Frequently the credit card payment processing filters to prevent fraudulent activity are set so tightly that they restrict potentially legitimate buying activity. Strike a careful balance by analyzing the most common causes of payment denial to identify areas where potential sales are being lost due to unnecessary checks.
Address verification (aka, AVS) is very important for merchants; however, it also has a tendency to filter out legitimate customers – consider the consumer who enters their address using the word “Drive” versus “Lane.” There is a risk/reward balance required to secure business form fraud with ensuring that legitimate customers are handled effectively. By frequently reviewing your payment processing errors and response codes, you may identify detrimental checks that are hindering sales and causing shopping cart abandonment.
17. Provide Clear Instructions for Order Completion
When entering personal and payment information, consumers want to avoid errors and provide information accurately the first time. Help them achieve their goal by offering clear instructions.
When requesting a credit card CVV or CVC code, show them where this number is imprinted on the credit card and state the number of expected digits they must enter. Let customers know when they need to state their name “exactly as it appears on their credit card” and explain why any unexpected information like birth date is being required.
In general, people like instruction. They like knowing that their actions won’t cause additional work for them or create unforeseen “headaches” like being requested to complete the order form a second time because they missed a field.
They also want to know “what’s going to happen next?” Let your customers know what happens after clicking the “continue” button, such as their credit card will be processed versus the opportunity to confirm their order. Customers are following your lead. Help them see into the future of their ordering process by providing clear instructions each step of the way.
18. Monitor Web Page Load Times
How long does your shopping cart page take to load? The industry average is up to eight seconds. Beyond that and a website runs the risk of abandonment.
According to an e-commerce study conducted by Keynote Systems and reported on via a “CIO Insight” article dated July 2005, “the checkout portion [of the website] was the least reliable, the most error-prone.” The article continued, “it’s not until checkout that most sites bring in log-ins, security and payment system mechanisms that might include third-party credit card companies as well as possible tie-ins with the supply chain and delivery options and tracking numbers.”
Monitor web page load times using services from website performance companies like Gomez (www.gomez.com) or Keynote Systems (www.keynote.com).
19. Offer a Small Number of Steps Toward Checkout
Don’t be overly concerned with the number of steps in your checkout process. Having fewer steps is ultimately more efficient, but it is a greater detriment to force too much information onto one or two pages (steps) rather than having four or five well-organized and short steps. Once a consumer moves beyond the shopping cart page into the billing checkout, there is a greater probability that they will stay committed and work through the order.
How Do You Measure Shopping Cart Abandonment?
Measuring shopping cart abandonment requires an effective web analytics program. The two figures required for measurement include: (a) total number of shoppers who purchase, and (b) total number of shoppers who put something into their cart and leave without purchasing. Gathering these two figures may prove difficult without an adequate web analytics/statistics program, which most web hosts do not provide within their free package of services.
An effective web analytics program provides funnel and goal analysis, which enables the measurement of shopping cart abandonment across each step of the ordering process.
Google Analytics is a fair starting point for smaller e-commerce businesses. It offers funnel navigation analysis for up to four website goals (consumer actions a website wants to track and measure). The funnel is customized within the administration section of Google Analytics and does require some moderate technical skill for code placement on the website.
Other effective web analytic programs require an investment ranging from $80 per month to over $2,000 a month, depending on various activity volumes like page views. Some of the more popular web analytic programs include WebTrends, Unica NetTracker, IndexTools, Omniture, and CoreMetrics.
Web analytic programs offer great value far beyond just measuring shopping cart abandonment, including analysis of visitor and customer conversion, as well as marketing campaign tracking. Don’t shy away from the investment if your goal is to substantially increase website sales.
Take the Call-to-Action to Reduce Shopping Cart Abandonment
Executing an effective conversion marketing project to reduce shopping cart abandonment is a process, not an event. Carefully analyze your current shopping cart abandonment rate, identify potential causes and try to ascertain how to reduce the rate. This involves a fair level of educated guessing and plenty of A/B split-testing. At times, areas of improvement are easily recognized when compared to the list offered above; however, sometimes subtle changes in assurance policy placement, changes to call-to-action text and buttons, and other seemingly minor alterations have the greatest impact on addressing consumer concerns.
It is important to analyze and plan your initiatives first to determine what it possible with your e-commerce technology and what the estimated cost/benefits are for implementation, and then to prioritize these next steps.
Equally important is to understand your customers and how they buy. Define what specific assurances they require to feel confident, safe and comfortable with ordering. After developing and validating an effective plan, execute it deliberately. Measure its effect over a reasonable period of time based on a fair sampling of shoppers. As a PROCESS and not an event, don’t expect immediate and major wins (although they are possible). Persistent and consistent testing and measuring are surer ways of tackling your shopping abandonment situation.
Reducing shopping cart abandonment is a powerful conversion marketing effort that directly impacts your bottom line. Inject some of these recommended strategies into your ordering process to achieve higher performance.