Information and intelligence gathered from a retailer’s eCommerce site can provide valuable insights into emerging shopping trends and help improve future eCommerce performance.
Online sales, catalog and interactive TV orders, soared during the 2012 holiday season. Deloitte Consulting predicted that these types of sales will rise 15% to 17%, mostly due to online shopping, which they believe should account for three-quarters of all non-store purchases.
In 2011, online retail boasted a 15% to 16% rise in sales, and 2012 was predicted to be the fourth consecutive year where online holiday sales increase in the mid- to high teens.
However, Forbes Magazine reported that in 2011, 72% of all potential eCommerce purchases were abandoned. In fact, the shopping cart abandonment rate hit an all-time daily high of 82.9% on November 23rd, the day before Thanksgiving and the pending “Black Friday” and “Cyber Monday” onslaught. In 2012, industry sources were predicting that the abandonment rate will reach 90%.
With so much at stake, understanding customer buying behavior is critical. This is especially important during the peak buying season, as it helps merchants to indentify trends that can be applied throughout the year to help boost profits and reduce online shopping cart abandonment. By having the ability to analyze data acquired online during the industry’s busiest time of year, retailers are able to pinpoint not only the areas that need improvement but also those that succeeded.
Why Potential Customers Abandon Online Shopping Carts
Can you remember the last time you saw someone fill up a shopping cart in a department store and then leave without making a purchase? It doesn’t happen often largely because there are no surprises awaiting the customer at checkout such as exorbitant shipping costs or a price that was higher than anticipated. In-store shoppers face no lengthy registration process at checkout and they have the benefit of being able to interact with both the product and sales support as needed–which is often the most necessary component when it comes to making a purchase.
On the contrary, these are all issues that consumers face almost every time they visit a retailer’s website and is something consumers are weary of especially during the weeks leading up to the holiday shopping season. So while retailers look to capture market share by offering a multitude of new products and a variety of ongoing promotions, the reality is that consumers who plan to make an unusual amount of purchases in a very short period online will abandon their shopping carts with increasing frequency. This is partially because they are not ready to buy and partially because they want to ensure they get the best deals. It’s no wonder why online retailers face such enormous pressure to provide an optimal, relevant and personalized online shopping experience for customers.
How to Help Combat Shopping Cart Abandonment
Despite all the improvements in recent years, eCommerce websites still face increasing abandonment rates. This is due to the rising sophistication of online customers and their increasing propensity to buy only when there is a perceived sale or when free shipping is offered.
Retailers can help decrease the percentage of online shopping cart abandonment by properly addressing and applying improvements to certain product pages and by clearly defining information to consumers including:
- Rich product descriptions that contain quality descriptions that accurately describe product attributes and options. Failing to convey detailed product information, retailers not only limit their sales but also hinder the way they are found in searches.
- Sizing and measurements in a manner that helps the customers understand the context – apparel can have sizing charts, appliances can show graphical representations of size, or fit within various environments (counter-depth, flush-mount, etc)
- Multiple product images that detail the various angles, or even use of the product. Product in the package, out of the package, images showing nutrition or allergen information, etc.
- Easy product comparisons that are based on in-depth specification information, not just side-by-side listings of free text copy. This requires breaking down paragraph-based copy into specific elements or attributes that customers would use as a comparison point.
- Rich descriptive text that includes feature and benefit statements, etc. that are designed to help sell/convince/persuade,
- Consistent product details that provides the same level of information regardless of where a person chooses to shop. Retailers need to ensure that they share more accurate information with its websites, eCommerce applications, printed media, kiosks, POS systems, sales training materials, customer service applications, etc.
- Customer reviews based on shared ratings, comments, questions, answers, and stories about products and brands.
- Warranty, Service, Installation and Product Guide information which can include digital assets. Alternatively the information could be made available for download or as plain text on various eCommerce channels.
- Returns policy information can be reduced by properly managing the complex process of gathering, managing, publishing and sharing product information within the enterprise and across the supply chain. Every year, a large percentage of products are returned simply because of incorrect, insufficient or inconsistent product information.
- Shipping cost that clearly articulates shipping options early on in the sales process to let consumers know if they shipping policy is “no-strings”, coupon-based, only available on select goods, etc The proliferation of free shipping offers can be a real boon to a retailer’s eCommerce strategy in fact a comScore study found that 36% of consumers will not buy unless free shipping is offered.
- Availability based on optimized inventory levels. This require a single, consistent view of product information across the enterprise and supply chain — and without forcing every department, business unit and supplier to use the same system or data format.
Ensuring that consumers have the information they need is one way to improve the chances for a completed online purchase. Studies have shown that anything that surprises a consumer during their online shopping experience is likely to hinder their purchase. By including all relevant information on the individual product page, the retailer can reduce the chance of surprise for the consumer during the checkout process. As such. retailers are turning to software and are implementing Master Data Management (MDM) or Product Information Management (PIM) solutions to make sure the right information is included with the right product in order to decrease shopping cart abandonment.
Giving Data Direction to Improve the Multichannel Retail Experience
Some eCommerce platforms excel at servicing pages, connecting products and consumers, and processing consumer payment. How retailers handle data is now a strategic issue. This is especially true in today’s multichannel environment where methods and approaches learned from eCommerce data are influencing business decisions across the enterprise. This movement is the main reason why choosing the right MDM solution is imperative and by choosing the wrong solution could be a costly mistake.
Having greater control over product information and other master data paves the way for multichannel success. With a MDM solution in place, centralized product & customer data is used to feed consistent and accurate information to a variety of destinations including websites, print catalogs, and enterprise resource planning (ERP) systems. Cross-sell, up-sell and add-on links can also be created and can be something as simple as offering batteries or another appropriate accessory. A retailer can also create groupings of complementary products to increase the order value.
One View of the Customer Across All Channels
Beyond delivering all the correct product information to the right places, the other half of the multi-channel and eCommerce equation is the customer. Customers receiving redundant messages and irrelevant communications are on their way to becoming ex-customers, leaving companies to deal with the repercussions of increased dissatisfaction, lost cross-sell opportunities and high-cost/low-return retailing efforts.
Companies approaching eCommerce with a multichannel mindset understand their customer’s needs and preferences and how best to communicate with them. Each time a retailer engages with a customer, regardless of channel, new information can be gathered on product, payment, brand and preferences. However, in order to be useful, this information must be centralized so that retailers can deliver a more personalized shopping experience. This can best be achieved by creating a consistent view of the customer across all of a retailer’s various channels.
The End Goal: A Truly Unified Multichannel Retail Experience
More than ever before, the ability to react and execute faster is absolutely critical. That’s why merchants that can pivot faster stand to come out on top. Through gathering product, supplier, and customer data, retailers can move toward a unified, multichannel retail experience thus decreasing shopping cart abandonment and improving margins. By implementing a strong Product Information and Master Data Management solution, a single, trusted source of information is created for the entire organization.
Executive teams can deliver real-time, consistent and highly accurate operational information about products, suppliers and customers. In doing so, online and multichannel retailers can use their operational information as a strategic asset and improve eCommerce performance.
Mikael Lyngsø is CEO of Stibo Systems.