It is both a lost opportunity and a revenue opportunity at the same time: when response rates are small, these possible customers have identified themselves as being almost ready to commit but have stopped at the last moment.
If we could understand who and why they abandon their shopping cart, we could actually start to resolve the issue and gently push them over the line.
How do you identify this effect?
There are lots of reasons why customers don’t go right through the process to the end. We’ve identified the most common reasons here:
- They’re not ready to buy (now): But they might be ready to buy later so leave the merchandise in the shopping cart. But you can also have a process on how to encourage them to finish off their shopping now. Abandoned cart procedures with an email somewhere between 4 and 24 hours after abandonment will convert more sales (because some people were just distracted)
- Clunky system: This is all around how many steps there are in the buying process on the site and whether they flow logically (and quickly). Another step which can cause abandonment at this time is whether the customer has sufficient choice around payment options. A well designed process and good store functionality will deliver this and it is something that can be rectified. If this is a significant problem to you then it might be the reason to explore a technology upgrade. Site speed is often a killer here - if you are too slow then customers will leave for somewhere with a better experience
- Your proposition isn’t sufficiently compelling: It’s not all about prices but price is in there somewhere. You have to have built an incredibly loyal customer base or provide something your competitors don't (exclusive range / more information / broader range). Your store must provide expertise, value for money and a comprehensive range. Your customers should buy at a higher price point because they value the total package offered. But there is a point where they will look elsewhere. Make sure your add-ons (postage, insurance, taxes) are all clearly identified so there are no surprises. I still have shudders when I think of how budget airlines’ web stores work: the headline price is never anywhere close to the final price asked and it puts me off (and I feel ripped off)
- Things changed unexpectedly: Do you use in-shopping incentives? If so, and they change during the period, then you might find more abandonment. Whilst short term discounts might pull some customers through fast. It might also cause some customers to pause (or even walk away) if they are removed unexpectedly or don't appear. The moral of the story here is 'don't teach the wolves to chase the sledges' (i.e. don't teach people to delay because they think a sale is just round the corner)
- They were comparison shopping: Some buyers are very price sensitive and will fill their shopping carts without too much intention to complete. They’re comparison shopping on a number of sites and will only buy the cheapest. Unless you are in the business of being extremely low priced then this sort of business isn’t really worth chasing.
This will show you the sorts of situations where cart abandonment typically occurs. We don't recommend you cure all of these - it would be expensive to maximise them all - but to get them to a position where they are only making a negligible and acceptable impact on the business compared to the investment to rectify them.
How to improve abandoned carts and create valuable sales
- Remove barriers: There are small tweaks that can be made to your shopping site to make it quicker and easier into the payment process. You can increase the number of payment options too - the inclusion of a direct payment option, such as PayPal, means that credit / debt card details are not given. Some customers are still nervous of giving such details. Removing complexity and having a clear, simple process can have a positive effect too. A smooth process with the minimum of steps is best. Keeping data collection as late as possible is good too. On the positive front, you can enhance your proposition with an offer of free postage. Keep these at specific times or for orders over a certain value or for returning customers, for example. This means integrating your e-commerce software with ERP and with marketing software
- Win them back by lowering the barriers: One of the most effective ways of dealing with this issue is to have an abandoned cart process. It is based on email nurturing of the customer to encourage them the complete their transaction. It might be based on a discount (free postage or percentage off next purchase, for example). Good systems will be able to automate this for you. You will be able to see how effective your store is at recovering these ‘lost’ customers. Good nurturing means customers who abandoned their carts are 20% more likely to buy. Put an efficient process in place and some of these opportunities will be won back. The better the process, the bigger the proportion of recovered customers
- You’re not going to get them all: Some customers just aren’t going to respond to nurture or incentives or anything else reasonable that you offer. Best advice is not to get worried about this. You have commercial targets to reach and you must set a realistic limit to how big an incentive gets. Typically an 80/20 rule will be good in terms of investment - trying to achieve 100% conversion will be prohibitively expensive
How to prevent abandoned shopping carts - Is there anything else that can be done?
New back office software can be set up to do much of the work involved in abandon online shopping carts process automatically. This can be customised for various customer groups: more compelling offers to your best returning customers, different offers to others. If you don’t know what is possible to achieve then perhaps this is the time to do more research.
Ecommerce website design is something that can help with this but it does need a process too to make sure this.
If you liked this particular blog article, then you might like this one too: http://inbound.itqsolutions.net/blog/what-are-the-key-shopping-trends-for-web-stores