Abandonment is one of those performance metrics that is a grim reminder of lost revenue. It’s a depressing thought: that a significant portion of your users will leave without making a purchase. It’s something that you will have to take in stride if you want to retain your sanity when growing your ecommerce business.
The inordinately high abandonment rate of shopping carts is a fairly unique problem posed to online retail. After all, you don’t see people filling up handcarts at a local boutique, only to leave them at the register and walk away from the cashier without saying a word.
At a basic level, it doesn’t make sense. Your visitor has arrived at the online point of sale, item in-hand, and ready to take it home… What’s the problem?
Traditional retail has significant advantages at checkout:
No Shipping Fees – In-store, know how much you’re committing to spend, there are no hidden fees and shipping is usually a non-factor.
Purpose and Intent – You came with a purpose, to buy something - a physical item that you can see, hold, and take with you immediately.
Signing Up and Committing - After purchase, you never have to deal with the merchant again if you so choose.
Ecommerce has difficulty with these areas:
Shipping Fees - You want to have the lowest price possible on display, so you don’t include extra fees (like tax) and shipping costs on product pages. Your audience can be global and someone has to pay to get the item there.
Purpose and Intent - There are a million ways to get distracted from the task of buying. We browse online and are not incessantly looking to purchase (contrary to what advertisers may think). Additionally, users have many other navigation options beyond “Checkout” or “Convert” like: exiting, the back button, link out to advertisements, or to save the cart for later and move on.
Signing Up or Committing -While giving shipping and email addresses are an expected part of the online shopping process, it’s still a commitment. Many sites require an account to save a cart (or even just to order) and sometimes create a disproportionate level of obligation on the part of the user before they have established a commitment to follow through with the purchase.
Lets take a look at these common problems and ways that you can fix each of these issues to build trust, increase transparency, and decrease your shopping cart abandonment rate.
Problem: Hidden Shipping Fees
Fix: Early Transparency of Costs
In a July study by UPS on the “Pulse of the Online Shopper” ( Download here), 5 of the top 6 reasons that users abandoned an online shopping cart revolve around shipping. Of respondents, 58% report that they have abandoned carts because the shipping costs made the total higher than expected.
Are you surprised? Of course not; no one likes thinking they will be paying $5 and end up paying $12 with shipping and tax. In the mind of the shopper, there’s a point where the convenience of shipping doesn’t outweigh the cost of receiving it. It depends on the product, but free shipping is significantly more appealing than any charge.
You would think that a company with such strong public distrust for it’s data security would make it as EASY as possible to bring in customers. If you somehow find yourself on their checkout page, you are faced with a couple of annoyances that may drive you away.
You’ve got things in your cart and you’re ready for checkout. If you missed their $50 free shipping promo, which is actually a good tactic that they use well and show often, then shipping will be a big factor in your buying decision. You can’t see any shipping costs yet since you haven’t given an address but at least there are date estimates.
So you proceed to checkout, where you are first asked for your address. Ah! This must be where they calculate it. In goes the address and you submit, expecting shipping costs once they know where the item is going.
Here’s the result:
How do I want to pay? I don't yet, I haven't even seen the price.
Instead of giving you the estimated total with shipping and tax, they want to get your credit card information first! This is the breaking point for anyone who is not fully committed to the purchase; without shipping costs calculated, I most certainly am not committed. Especially in the case of Target, where their products are available elsewhere, you can bet that I’m going to do more searching for a less intrusive, more explicit pricing.
Best Buy does a great job of both offering free shipping at $35 and making it super obvious what their shipping times, policies, and costs will be.
Check out this product listing for headphones:
In addition to allowing you to hover over their shipping details, they also let you know the unique shipping information for each item. It’s fairly tough to incur shipping fees from Best Buy, as they retail mostly bigger-ticket items and do a lot of in-store pickup, but if you do spend less than $35, you are given a clear, informative checkout screen.
Let’s say I’m ready to checkout:
Shipping is estimated before I even put in my area code (you don't have to input a full address to get the estimated tax, just the postal code works) which is significantly easier and less intrusive than requiring me to submit my entire address.
At this point, I know exactly how much it will cost and can choose to either continue or keep shopping on the site. But contrary to with Target, I was able to see all of the relevant information before I hit any resistance in the checkout funnel.
How to Improve Shipping Transparency:
Offer free shipping at a dollar threshold.
Like both Target and Best Buy did, you offer free shipping at a certain cart value. People love free and are willing to hit that cart value just to get it; 58% of those in the UPS ComScore study indicated that they have and are willing to add items to their cart to secure free shipping. Find your average order value, offer free shipping at a slightly higher threshold, and drive up-sells, reduce friction, and use your new “FREE shipping” model as a marketing technique in your ads and social promotions.
Be obvious with your costs and terms if you absolutely can’t offer Free or flat rate. Offer rationale rather than just costs.
If you have a single warehouse, are selling out of your garage, or are in a market where lowest price point is a must, you will probably have to account for shipping to avoid breaking your margins. Try to let users estimate costs early so that the user is more easily persuaded later. Test various locations within your funnel to display your price with shipping but be sure that once you have a user’s address they see the actual cost.
If users are aware of impending costs from the beginning, you avoid sticker shock and snap decisions to abandon the cart. A simple explanation of the price breakdown and why can also go a long way to easing the suspicion of jacked-up shipping costs to pad your own pockets.
Be upfront about costs earlier rather than later.
37% of those who have abandoned carts have done so because the shipping was listed too late in the process (UPS ComScore).
Also consider the placement of your shipping terms, pricing, and special offers. Do you want to have them on product pages, like the Best Buy example or at checkout? What about this example from TJMaxx, where at the top of every page, within the banner, it counts down the amount you need to purchase to receive free shipping.
They hit you again during checkout (assuming you are under the amount) right before the continue button, incase you missed it.
Problem: Window Shopping (Just Browsing)
Fix: Develop Intent to Purchase or Return
It’s really easy to toss a cart aside and move on, as we do a lot of research and jumping around online. After all, we can just find it again with a couple of searches, right? If your site doesn’t aim to capture, facilitate, or direct a user’s intent to purchase, someone else’s site will.
Lets assume a user has found their way to your cart to check shipping prices. They’ve put in an item, what’s next?
There are a lot of possibilities:
- Find out more about your shipping.
- Abandon cart to search more.
- Click through to an ad.
- Get distracted by something, anything.
But remember, these users have expressed interest in this item (or items) and are on your site, in your checkout funnel; what better combination of circumstances could you want? A fairly common technique to re-affirm and develop a user’s commitment to the purchase is to include everything (shipping, credit card, account setup, product review) all on one page and to keep showing your items throughout the checkout process. Here’s T.J. Maxx again with a one-page checkout.
In addition to showing me my item the whole time so that I don’t forget what I will be losing if I abandon my cart, they also re-affirm my savings with a badge, showing me how much I am under-paying for the item. The idea is to encourage the sale and let the user know just how close they are to having the item.
But let's say I'm just browsing and hadn't intended on following through at this time (the most common scenario).
In this case, you are looking to capture future intent. Make your site where the user returns when they want to find the item later. Check out how DSW, the shoe outlet, redirects what would potentially have been an abandoned price comparison cart into a lead through their wish list:
Like Best Buy, DSW addresses shipping immediately and takes care of the guesswork on the first page. Secondly, they offer the option to save the item for later once on the page so that if the user are content with the price (but isn't ready to buy) they can save it. DSW addresses the concerns of both a committed visitor and a passer-bye and allows the capture of future intent.
For more examples of how a wish list can help your site, check out this response to this question on Quora from Ian McAllister, who was in charge of overseeing Amazon’s wish list and registry features.
How to encourage intent to purchase:
Make your checkout one step or one page.
The concept is simple: the quicker you can get a user to your payment button the better. Less refreshing is a good way to both reduce friction during the checkout process and to allow complete transparency of the transaction.
How do you get one-step checkout? Here are some solutions for the top platforms:
It will depend on your audience, but you can achieve the same goal by requiring only the information most relevant to completing each task during the checkout process. For example: asking only for the Zip Code to calculate shipping and saving the full address for the payment phase.
Allow for customers to save or create a wish lists of items.
While an immediate purchase is ideal, sometimes the timing just isn’t right. Allowing a user to create a wish list is a solid way to capture emails for retargeting campaign, mailing list, and cart reminders. Another awesome benefit is that with many wish list plugins there is the option for users to “share” their list. This extends the potential exposure to their contacts and social channels.
How do you setup a wish list? Here are some solutions for the top platforms:
Problem: Signing Up for Accounts Before Checkout
Fix: Add Guest Checkout. Make Account Benefits Obvious
With less invasive personalization available through cookies , accounts are not an essential part of a user’s product hunting experience. Especially when price checking, comparing shipping, and other non-committal exercises, a required account is going to break the flow of your checkout.
Remember, you are likely going to get that email anyway during the checkout.
Transactional emails are standard, expected practices of all leading ecommerce sites and users understand this. All of the major retailers mentioned above (Best Buy, Target, T.J. Maxx) offer account creation during the checkout process but it is not mandatory. Then, in the final steps of your checkout, they then ask again if you’d like to setup your account. At this point, the user has already committed to inputting location, credit card information, etc. so it isn’t so much of a stretch to just go ahead and sign up. This can hold especially true if you offer incentive for the signup (Free shipping, coupons, chance to win something).
In case you haven’t dealt with one of these situations before, here’s the checkout process from ForbiddenPlanet.com, which specializes in pop culture merchandise of all types. In order to accomplish anything checkout-related, users first need to create an account.
There is rarely a good reason to force account signup before checkout. Unless users are wholly committed to the purchase, it's likely to increase abandonment. Additionally, there's no rationale behind why a user would need to sign up.
Florists’ Transworld Delivery (FTD) implements a couple of ingenious schemes to get users to hand over their contact information without compromising their checkout process. First, They ask if you want to sign in with Facebook:
Social sign-ins are a great way to encourage account creation without explicitly asking for user input. In an industry where occasions such as birthdays, events, and parties are the lifeblood, having access to a visitors friends list, pages, and posting is a gold-mine for marketing. (This may not be a good solution for everyone, though and you will have to assess the pros and cons of using Facebook signin for your ecommerce site.)
In the next step, FTD takes it a step further by offering $10 off of your next order by inputting 3 dates to remember. All you have to do is pick a special few somebodies and the date in question and opt in to their ambiguous mailing program. It’s easy to forget that you are essentially committing to receiving at least 3 pieces of promotional material, as the fine print on the right says that they will email me offers, but it feels like $10 for nothing!
FTD has gotten me to the next step of their funnel, gathered personal information, and committed me to their promotional material. This was all before inputting a single piece of payment information OR an email address. It's a low-friction, fruitful encounter for the user that is a great example of how adding value to giving personal information can reduce abandonment.
How to avoid bounce at account signup:
Make accounts optional and have guest checkout
If your user finds value in your services, they will create the account in earnest. You will capture their email address regardless, as it will likely be their preferred method of correspondence.
Offer incentive for signing up. If nothing else, explain why they are signing up.
Does signing up actually serve the user’s needs? Even if it’s mainly so that you can market, retarget, and try to up-sell your users should profit from it as well. Describe all of the great features that are available to them when they sign up: faster checkout, personalized preferences, and so on.
Consider this: what is your customer’s lifetime value? Can you afford to offer free shipping, services, or coupons in exchange for potentially securing an email signup in addition to a purchase. Take this example from Nike, who highlights the benefit of becoming a member during checkout:
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What has worked for your business? Add a comment in the comments section below!
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