Shopping-cart abandonment is as old as e-commerce itself. Web merchants have battled the problem largely by redesigning their forms or by streamlining the so-called user experience and cutting the number of pages a customer must go through to complete a purchase.
Nonetheless, cart abandonment industrywide remains at over 50%, according to an October report by Cambridge, MA-based Forrester Research. More than 88% of online shoppers say they have left items in the cart without completing the purchase online, Forrester reported.
The majority of shoppers surveyed — 57% — said they’d abandoned shopping carts because they didn’t want to pay the shipping charges. Forty-eight percent said they’d left a purchase unfinished because the total cost was more than they had expected. And 41% said they’d used the shopping cart for research.
Forrester concluded that online merchants shouldn’t sweat shopping-cart abandonment so much. “Retailers can optimize checkout processes and paths to purchase all they want, but unless they’re willing to play the low-price game, consumers will continue to abandon shopping carts,” analyst Carrie Johnson wrote. Forrester recommended that rather than focusing on exact abandonment figures, online retailers should be on the alert for changes in the rates: “A steep rise in cart abandonment could raise red flags about a technical glitch or a competitor offering much lower prices.”
That said, the report relied on self-reported behavior, which is notoriously inaccurate. And if some sort of glitch has been at work on the cart all along, there will be no spike in the abandonment rate.
And the report, while not wrong, “could could give people a reason to think that they’re off the hook,” says Darryl Gehly, executive vice president of Watertown, MA-based technology consultancy Molecular. “You want to understand what kind of hurdles you have put in front of your customers that are preventing them from doing business with you. It may be that a large percentage of your customer base may not want to pay shipping charges, but we also know that that is not always the case.”
A richer checkout experience
Sometimes the cart technology is to blame. The typical online shopping cart remains a clunky HTML application that requires multiple page loads to complete. And with each page load comes the possibility of an error and, consequently, a lost sale.
Some merchants have tried rich-media shopping carts to simplify and speed up the checkout process. And in September, Cambridge, MA-based Web technology start-up Allurent introduced what is believed to be the first stand-alone rich-media shopping cart that can be integrated into an existing infrastructure.
The Allurent cart makes use of a Flash plug-in that is installed on 98% of computers, according to the company’s founders. The cart involves no page loads, as is the case with HTML carts. So if a shopper types in a credit-card number with the wrong number of digits, a big red block resembling a comic-strip thought bubble appears instantly with an arrow pointing to the credit-card field and the warning “Your credit-card number contains the wrong number of digits.” HTML shopping carts would typically require the user to hit the “next” or “submit” button and wait for the page to reload before a small warning would appear at the top of the screen.
Allurent’s cart also lets customers assign multiple ship-to addresses to orders by clicking and dragging pictures of their purchases into different boxes on the screen. In addition, the cart has a “we also suggest” feature that allows the merchant to upsell and cross-sell throughout the checkout process. Shoppers can then buy the recommended products by clicking and dragging them to the order form.
“Our application allows you to do the upselling and cross-selling during checkout and resume the checkout process immediately without having to navigate through pages,” says Allurent’s cofounder/chief technology officer Fumi Matsumoto. “The customer experience is better in the rich Internet commerce world. In the HTML world, typically you’re dealing with HTML forms. Information gets lost a lot. You’re moving from page to page. If you make a mistake, it’s not easy to fix.”
Allurent’s cart also combats sticker-shock abandonment by, for example, instantly calculating shipping charges when the shopper provides his zip code. “The moment there is enough information to calculate the shipping costs we show it to them, so there is less of a sticker shock as they go through the process,” Matsumoto says.
Understandably, online retailers have been reluctant to use graphically rich e-commerce applications for fear of losing sales from dial-up users whose machines get bogged down by heavy graphics. But this is becoming less of an issue as more Web users migrate to high-speed access. Online audience measurement firm Nielsen/NetRatings reported in September that the percentage of active Internet users (those who log on at least monthly) who accessed the Internet via broadband at home rose to 61.3% from 51.4% in August 2004. The number of people using a dial-up connection dropped 10% during the past year, to 54.3 million from 60.6 million.
What’s more, “those spikes in sales coming in at noon indicate that a lot of people are doing their shopping from work, where they have high-speed access,” points out Monica Schrager, senior strategic analyst for Ann Arbor, MI-based Web development firm Fry.
A hefty price tag
Rich-media shopping carts may be the future, but pricing currently puts them out of reach for most merchants. A one-off rich-media shopping cart costs $250,000-$500,000 to implement, says Molecular’s Gehly, whose company built a rich-media cart for TJMaxxHomeGoods.com last year. Allurent’s cart, dubbed Allurent BUY, is somewhat cheaper — it starts at $150,000 plus implementation costs, according to the company — but that’s still a major capital expenditure for most companies.
After Framingham, MA-based TJX Cos., the parent company of discount retail chains T.J. Maxx, Marshalls, and HomeGoods, implemented the rich-media cart, conversion-to-sale rates during checkout on TJMaxxHomeGoods.com soared by 50%. But the spike in conversion rates apparently wasn’t enough to keep the e-commerce site afloat. TJX in October announced it was closing TJMaxxHomeGoods.com because the site will lose $15 million this year and the company wants to eliminate further losses.
Happily for those who aren’t ready to invest in a rich-media cart upgrade just yet, Larry Kavanagh, president of Covington, KY-based e-commerce consultancy DMinSite, has been studying buyers’ behavior in order to figure out how to apply basic direct marketing skills to shopping carts.
Among his initial conclusions are that Websites should eliminate any links that take shoppers back to the main site during the checkout process. “We’ve found that people were hitting a link that took them back to the main site and were never coming back through,” Kavanagh says. “One of the things we’re trying to do is keep them single-minded and focused: ‘There’s nothing else to do other than check out right now.’”
Password or log-in snafus account for 20%-25% of his clients’ abandoned shopping carts, he continues. “In the data we’ve collected, I can see that they have attempted to log in, they put in a password that was close to their real password but not their real password, and even though we provide a password hint, the password hint doesn’t remind them what their password was,” Kavanagh explains.
Also, shoppers who have moved since their last purchase often have trouble logging in because their zip code on file with the merchant doesn’t match the zip code they’re trying to log in with. “They’re frustrated because they know they have an account there but they can’t find it,” he says. For that reason, merchants who don’t have repeat customers coming back at the rate of, say, Amazon.com may want to consider eliminating the password/log-in function. Kavanagh says he is testing the idea with one of his clients.
Gehly says he was surprised that the percentage of people abandoning purchases because of log-in troubles in Kavanagh’s research was as low as 25%. Gehly’s advice: “Always give customers the option of logging in or checking out as a guest.” He also advises giving customers the ability to remove an item from their shopping carts in real time.
One area where DMinSite’s research jibes with Forrester’s is in business-to-business shopping-cart behavior. “A lot of what looks like abandoned shopping carts [on b-to-b sites] are people who want to fax in their order or something like that,” says Kavanagh.
Some of DMinSite’s more advanced b-to-b clients are adding prefixes to the SKU numbers of online items so that they can track products that were found online but ordered by phone or fax. “For every dollar of sales that they get through the online checkout process,” Kavanagh says, “they’re finding that by putting that prefix code in front of the SKU numbers on the site, they’re getting an additional $1.20 in faxed or called-in orders.”
B-to-b customers will often put a bunch of items in a cart and then print it out so that they can get a manager’s approval, Kavanagh adds. “In the b-to-b world you have to look at abandoned shopping carts a little differently than you do in the b-to-c world.”
QUICK TIPS for reducing shopping-cart abandonment rates
Don’t require shoppers to register or log in. Regardless of the corporate goals that registration is trying to fulfill, offer users the option of completing a purchase “as a guest,” without registering.
To mitigate sticker shock, provide shipping costs and taxes as early in the process as possible.
Consider testing a live chat function. This would enable customers who are having some sort of problem checking out to contact a service rep immediately without leaving the site.
Add a third-party security certification. In an A/B-split test conducted by security auditing firm ScanAlert, the conversion rate increased 14% for consumers who saw the ScanAlert certification mark.
Because comparison shoppers account for so many abandoned carts, create a saved-search function that allows users who are comparison-shopping to easily return to your Website and pick up exactly where in the checkout process they’d left off.