With global online sales set to reach a total value of $3.45 trillion in 2019, ecommerce is an area of unprecedented opportunity for businesses, particularly those that are prepared to seize the enormous potential to engage with customers in the mobile space.
Despite the huge numbers that highlight the recent growth and current strength of global ecommerce, it's clear there’s scope for further expansion as the industry prepares to enter the third decade of the 21st century.
The average visitor conversion rate for ecommerce websites worldwide in the first half of 2018 was thought to be less than 3%. The average shopping cart abandonment rate, meanwhile, was closer to 70%.
Cart abandonment is clearly a significant problem that could represent a major threat to revenue generation for many businesses. Therefore, it's vital to come up with a focused strategy to combat it.
The scale of the problem
The relatively high likelihood of customers abandoning their shopping baskets without completing a purchase is one of the biggest possible disadvantages of ecommerce for merchants to be aware of. The sense of anonymity and freedom provided by online browsing helps people to feel more comfortable to 'walk away' from purchases than they would in a physical store.
According to a survey by Barclaycard, which processes nearly half of all credit and debit card transactions in the UK, 41% of respondents abandoned a transaction at a virtual check-out in the past year, compared to 24% who walked away from an in-store purchase.
The so-called 'surf and turf' trend could result in more than £18 billion ($22 billion) of lost sales every year in the UK alone.
Other key findings from the research included:
- Peak time for cart abandonment is between 6pm and 10pm
- Young consumers (aged 18-34) are the most indecisive online, according to retailers
- November, December and January are the worst months for abandoned purchases, as consumers browse Christmas gift ideas and look for Black Friday and January bargains
- 17% of shoppers who abandon purchases say they like to 'window shop' with no intention to buy
- 12% say they put items in their online basket to reserve them before they sell out
Arm yourself with intelligence
Having the right data and analytics to understand your business operations and your customers' behavior can deliver value in many ways. Where online shopping cart abandonment is concerned, collecting as much information as possible about the obstacles to conversion can help you make essential improvements.
However, this is an area where many ecommerce merchants appear to be falling short. The Barclaycard findings showed:
- 59% of online retailers are unaware of the average buyer drop-out rate on their website
- 27% analyze the browsing behavior of shoppers who abandon their baskets
- 45% are unable to pinpoint lost sales by gender and 41% are unable to do so by age group
Making the overall ordering, payment and checkout process as frictionless as possible is one of the best ways to give your customers an easy, positive experience, thereby minimizing the risk of abandonment and increasing the likelihood they’ll buy from you again in the future.
One of the most common sources of friction at the checkout stage is payment. The key focus here should be on striking a balance between security (which should be the top priority for both the company's and the customer's sake) and user convenience.
Displaying security logos such as Mastercard SecureCode, Verified by Visa and VeriSign Secured can help customers feel comfortable to share their payment details. Once you’ve established the foundations of trust, you can offer to securely store return users' card details, so they can check out with greater speed and convenience next time.
Reconsider your shipping and returns policies
One of the common reasons why people abandon purchases is because they aren't happy with shipping costs, delivery times or the returns process. If you find you’re experiencing a particularly high cart abandonment rate, it's worth looking into whether your policies in these areas are the source of the problem.
Being flexible with delivery can be one of the most effective ways to keep customers on side and increase the chances of them completing a purchase. If it's financially feasible for you to do so, offering free shipping will be a powerful buying incentive for people who are willing to wait slightly longer for their items to arrive. Those who need something urgently will appreciate the option of paying for express delivery.
Consumers who regularly purchase online will also want to know about your returns process, which should be as clear and transparent as possible. People who have concerns about the difficulty of returning products won't hesitate to abandon their cart and look elsewhere.
Deploy well-timed interventions
Pop-ups are seen by many web users as a nuisance, but for online shoppers, a relevant message sent at the right moment can be exactly what's needed to pull them back from the brink of abandoning a purchase.
User behavior tracking tools can help you identify when potential customers are about to navigate away from your site, allowing you to send targeted messages with the key piece of information or reassurance they need to go ahead and complete a purchase.
These interventions can also provide an opportunity for you to engage with your audience and develop a relationship with them. Acknowledging that they may not be ready to purchase yet, but will be welcomed back after they’ve had some time to think about it, will contribute to a generally positive customer experience and improve perceptions of your brand.
Send follow-up emails or messages
The next step up from appropriately timed web pop-ups is using email or SMS messaging to ensure that, even though a customer has decided not to go through with a particular purchase straight away, you're not missing out on the opportunity to engage, evolve your relationship with them and address any issues that might have hindered the sale.
It's possible that the customer has been thinking long and hard about buying the item, and an encouraging email or message from you could be enough to sway their final decision.
Offer discounts and personalized recommendations
Reducing the price of an item that has already attracted someone's interest is one of the most effective ways to close a transaction, and a sale at a discount is better than no sale at all.
Providing a positive brand experience and laying the foundations for a long-term customer relationship can also deliver much more value than you would lose by offering a small one-off discount.
Another tactic that can yield results and improve your cart abandonment rates is giving bespoke recommendations of other products individual customers might be interested in, based on their past purchases and browsing behavior.
Personalized experiences are becoming increasingly important in the ecommerce industry, with many consumers no longer accepting a generic, 'one-size-fits-all' approach. Being able to follow up an aborted purchase with a relevant, data-driven recommendation of an alternative product can help you re-engage the customer and strengthen your relationship with them.
Invite customers to keep a wishlist
A common reason for people to add items to their virtual shopping baskets but not go through with the purchase is so they can reserve the product, or remember it for future consideration.
If, after studying user behavior and collecting the relevant data, you find this is a common occurrence, one of the possible solutions to the problem is inviting customers to create their own wishlist on your site.
Investing in this resource can improve your cart abandonment rate and encourage people to keep returning to view and update their wishlists. This contributes to a richer, more satisfying user experience and fuels brand loyalty.
Invest in remarketing
Effective remarketing, also known as retargeting, can deliver valuable results if you want to minimize the risk of missing out on customers who have visited your site, shown interest in a particular item but not completed a purchase.
There are various approaches to remarketing, such as sending targeted emails that reflect the recipient's recent browsing, or incorporating a particular piece of code into your existing advertising on search engines. Remarketing can also be an effective tactic on social media.
Planned and executed in the right way, it's a strategy that can help you reduce cart abandonment and drive revenue.