How Behavioral Targeting Impacts Cart Abandonment

Mar 06, 2010 12:31 AM  By

The cart abandonment rate is one the most watched metrics in retail e-commerce, and one that most merchants could stand to improve. But before making changes to their Web sites, retailers need to understand the many factors that lead to cart abandonment – not all of which are inherently evil.

Cart abandonment rates average around 70%, but they can vary widely based on industry, product category, and customer base. For instance, research-heavy categories such as consumer electronics generally have higher abandonment, while specialty retailers, with exclusive product offerings, often boast much lower rates.

Some of the most obvious factors driving cart abandonment include inventory availability and unexpected shipping and tax charges. Many Web sites do not indicate whether a product is actually available for purchase until the cart page; others wait until the checkout process. In either case, customers who can’t purchase the product they’ve selected are highly unlikely to convert.

In the same way, few Web sites indicate tax and shipping charges on search or product pages, and customers can be unpleasantly surprised to see how these charges add to their total purchase price. Some retailers have taken steps to address these factors by incorporating tax, shipping, and inventory availability information earlier in the shopping path. Investing in real-time inventory tracking technologies and prominently displaying free shipping promotions throughout the site experience can also help.

Other, less obvious, factors may also contribute to cart abandonment. Consider, for example, the following two scenarios:

  • Many retailers automatically store cart contents between site visits, customers have grown accustomed to using the shopping cart as a wishlist, storing items for future research or reference, with no intention of purchasing during the current session.
  • Because of the growing influence of cross-channel shopping patterns, many customers may add a product to cart on the Web, but then head to a local store to view the product live prior to purchase. The latest research indicates that although about 70% of customers research products online prior to purchase, less than 10% of all retail purchases are transacted through the Web. This fact alone may account for the majority of abandoned carts in some product categories.

Both of these examples highlight the need for retailers to understand the customer behaviors and intentions behind the metrics in their Web analytics reports. Both examples also underscore the fact that a retail sales cycle often involves multiple interactions across multiple sales channels.

To understand and impact cart abandonment, retailers should first research their customer’s “natural” behaviors, and then seek opportunities to influence those behaviors through targeted content and promotions.

The best way to get an understanding of customer behaviors is through direct customer research, including surveys and usability testing. In running usability tests for more than decade, and I’ve never tested an e-commerce site that had zero problems in the cart and checkout process.

Even seemingly minor user interface issues can have a significant impact on cart conversion rates, so identifying and correcting these issues should be top priority. Misplaced buttons, small fonts, confusing instructions, and non-standard form fields are all common issues that create obstacles leading to cart abandonment.

Once you understand the patterns contributing to cart abandonment, you can leverage automated messaging campaigns and behavioral tracking technologies to reconnect with customers.

These campaigns can be highly successful in terms of e-mail open rates, click-through, and ultimately, conversion rate. Three of the strongest opportunities in this area are abandoned cart e-mails sent to customers with quick links back to product and cart pages, “back in stock” alerts via e-mail or SMS text messages and price drop notifications allowing customers to set specific thresholds.

Because of the many factors contributing to shopping cart abandonment, there is no silver bullet to combat it. Instead, retailers should make it a top priority to investigate their customers’ behavior, and adopt a portfolio approach to initiatives, including reviewing availability messaging, upfront cost presentations, trigger e-mails, personalized site content and usability testing.

Kevin Moffitt is vice president-customer strategy and experience for crosschannel platform provider CrossView.