Great expectations

Attention online merchants: Your customers' patience for technical foul-ups getting in the way of their purchases is wearing dangerously thin.

The reason: As e-commerce site experiences continue to improve, customer expectations improve right along with them.

The good news is that online shopping-cart-abandonment rates have decreased dramatically in 2007, to 52% on average from 60% in 2006, according to MarketingSherpa's latest E-commerce Benchmark Guide.

One reason for this pleasant drop in abandonment rates is that marketers have increasingly taken control of closing the deal, MarketingSherpa finds. “In the past, carts were more a function of the tech team than of marketing,” said the report. “Marketing and merchandising got the shopper all the way to the cart and then tech took over. However, over the past two years, we've seen a surge in marketers tweaking cart design.”

The bad news is that online shopping still has some glitches, and customers are less and less inclined to put up with it. Nine out of 10 consumers have experienced problems completing transactions online, according to a recent survey conducted by Harris Interactive on behalf of Tealeaf Technology.

Forty-two percent of those who experienced problems when conducting transactions have switched to a competitor or abandoned the transaction entirely, according to the survey. And 52% of those who received bad customer service from a merchant after experiencing problems with their sites have stopped doing business with the company altogether.

The stakes are rising, too: Forrester Research estimates 2007 online retail sales at $157.4 billion and projects the number to grow to $271.6 billion, or 9% of retail sales, by 2011.

“We're in a perfect storm, as users' dependency on e-commerce grows and their patience for bad online experiences wears thin,” says Rebecca Ward, CEO of Tealeaf.

The simple answer to the so-called perfect storm is, of course, making it as easy as possible for customers to finish their transactions online. Don't distract them and don't get in their way, say the experts.

Fair enough. But what are some of the concrete steps a merchant can take to lower abandoned-shopping-cart rates and close more sales?

For one thing, don't force shoppers to log in to buy something, says Larry Kavanagh, CEO of e-commerce design firm DMinSite. Make sure people can shop using “guest checkout.”

“The IT folks will look at this idea and say: ‘What a waste. The only thing you're not asking a customer for is a password,’” says Kavanagh. This is true indeed. A checkout process requiring people to log in does require only one more piece of information than allowing them to checkout as guests.

But for whatever reason, when a guest-checkout function is added to an e-commerce site, conversion-to-sale rates go up — dramatically.

“The magic of guest checkout is the psychological aspect,” says Kavanagh. “Even though they still have to enter their name, address and all their other information, psychologically, it still makes a big difference to them to think that they're not having to register.” It's not unusual to see a 20% to 30% increase in conversion-to-sale rates simply by adding a guest-checkout feature, he says.

Graeme Grant, chief operating officer for e-commerce technology provider Allurent, adds: “Absolutely, you've got to add ‘check out as a guest.’ We find that is the most important way people want to check out.”

For example, when Ulla Popken recently added guest checkout to its Website, the women's apparel merchant experienced an online sales increase of nearly 25% in less than a week, according to Kavanagh.

Clear the path

Another step multichannel merchants can take to increase conversion rates at checkout is to eliminate distractions, says Kavanagh.

“Removing any link that allows someone to go somewhere other than the next step in checkout is going to increase your checkout percentage,” he says. You might think you're helping them if you provide an FAQ link or a link to go back to the category, “but all you're doing is distracting folks,” he says. “You want them to be narrowly focused on just what it is you're trying to accomplish, which is the checkout.”

According to Grant, in the drive to accomplish fairly common goals — such as collect registrations, sell gift cards, offer multiple ship-to options — the core goal of the checkout process often gets buried.

When you try to cover all those different options, “the user's core [objective], which is: ‘I don't want to register; I want to give you my credit card and I want to go,’ gets very hard because there are so many elements junking up that core path,” says Grant.

But what about cross-selling and upselling during checkout? Is that a mistake?