Reducing Shopping Cart Abandonment

• 7.03.2003

Key Findings

Reasons for online shopping cart abandonment can be grouped as follows:

• The presence of high, hidden extra costs.
• Window or comparison-shopping.
• Confusing site design (functionality).
• Site unreliability.

Most causes of shopping cart abandonment can be alleviated through a considered adjustment of site functionality however, abandonment rates will never fall to zero as there will always be a certain level of abandonment due to product browsing, a trait of shoppers both in the real world and online.

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Abandonment as a barrier to revenue

There are some that believe every abandoned shopping cart is a lost sale.  However if one considers how people purchase in the real world this is not true.  People naturally browse prior to purchasing.  Dave Karraker a Vice President of Kmart’s online venture, bluelight.com uses the example of someone shopping for clothes.

Consequently it is unlikely that online retailers will ever see abandonment rates of zero.  However, it is preferable that rates are not seen to increase too much above this level of background ‘window shopping’ noise. Christopher Cunningham, chief information officer at the gift retailer Red Envelope, closely monitors abandonment rates on his own site.  He explains that as the customer proceeds to the check out, more intent to purchase the items is shown and one should expect a fall off in the rate of abandonment.  Any uniform increase in abandonment is likely to be the result of a functionality issue on the website (most often the introduction of hidden shipping costs).  Such stepped increases should be highlighted and addressed in order to reduce the level of abandonment. Therefore the key to improving abandonment statistics is to analyse the distribution of abandonment on the website, rather than looking at the total number of abandonments on the website.

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Influencing Factors

In late 2001 the Vividence Corporation, a leader in customer experience management, evaluated the experiences of 719 consumers as they used shopping carts on ecommerce sites. Figure 1 shows the most frequent reasons for shopping cart abandonment and the percentage of customers citing each as a reason.

Figure 1: Key factors in shopping cart abandonment

Comparison / Window Shopping and hidden shipping costs are the most frequent factors in shopping cart abandonment.  However all the factors listed above can be easily addressed with some astute website adjustments, to produce a site that will engage the customer and deny them reason to purchase elsewhere.

Removing Hidden Costs

In recent years the UK based VirginMobile has experienced phenomenal success in the UK mobile phone market.  A major factor in the operator’s success was a widespread advertising campaign based on the premise that there were no hidden costs incurred in the purchase of a Virgin mobile phone.  Many online retailers would benefit from adopting the same attitude to their own online sales.  The most frequent reason for shopping cart abandonment given is the addition of hidden and often high shipping costs and taxes onto item prices at the checkout. 

The key concept to grasp here is the necessity to provide potential clients with honest cost information from the outset.  Although there is a possibility of losing customers at an early stage by doing this, the shock of hidden costs is greater when they find out at the end rather than when they are filling their carts.

Making shipping costs visible on product pages can reduce this impact of shipping costs and taxes.  Such an approach may even compel the client to purchase numerous products in one shopping trip.  The implementation of this solution is straightforward.  Some sites provide a postal/zip code shipping calculator and/or use a small window to maintain a running total of items in the cart for the benefit of the customer.

Customer demand for accurate information also extends to stock and delivery information.  It is a very negative experience for the customer who begins to checkout their shopping cart only to be told at that late stage that the items they want are out of stock or will not be delivered in time. The customer may not return to the store, as a result neither may those who are informed by the customer of his/her negative experience with the site.  The most successful online retail sites such as Amazon.com provide this sort of information adjacent to the product images.

“Give a clear indication upfront if the item is in stock and promise a delivery date,” says Matt den Elzen, a project leader with BCG. “This is especially important around the holidays. If a customer knows [at the outset] that a product won’t be available for two weeks, there’s a better chance of him selecting an alternative product than if he spent a half-hour only to be disappointed in the end.”

Reducing Window Shopping

Shopping cart abandonment is also heavily affected by the way in which humans shop.  In the bricks-and-mortar world people naturally prefer to compare products and prices which means moving from shop to shop.  Online the situation does not differ.  The key to reducing online shopping cart abandonment caused by this ‘comparative shopping’ behaviour is to give the customer no reason to leave the shop. 

A site that is successful at retaining customers will provide information rich content in a variety of ways.  Perhaps the most important content to have is detailed product information that covers every possible aspect of the product. This may include static content information as well as dynamic visual information such as 3D views and close up images of the products detail Additionally providing the customers with the ability to appraise similar products side by side will dramatically reduce customer cart abandonment and prevent customers leaving the website in order to conduct product comparisons of their own. In a similar vein providing online shopping guides that help the customer decide which product would best suit their needs will also reduce abandonment, whilst at the same time exposing the customer to the up-sell of superior models of the same product.

Perhaps the most helpful information for a customer is through correspondence with a sales assistant in real time. If one considers the real world, shop assistants are fundamental to sales. They provide a second opinion for the customer in addition to helping the customer with any queries.  Despite the fact that there is perhaps more information online, access to it is often not always time efficient. There have been two approaches to providing the customer with relevant information and help that have been adopted recently with considerable success; the call-back button and instant messaging. The fundamental aim of providing a call back button and/or the ability to hold an instant messaging conversation with a sales representative is to provide the customer with a way of obtaining information that is not readily available on the site.

The concept of the call back button is well documented in the Mike Banks Valentine’s seminal report ‘Shopping Cart Abandonment Solved.’  Valentine argues that the reason behind abandonment is because most online customers need to know something that is not present on the FAQ page or elsewhere on the site. The procedure is extremely simple, the customer presses a 'CallButton' on the page and gets a pop-up screen asking for their name and phone number. The store representative can then call the customer back in order to answer any questions and address any concerns that they may have.

From the customer’s viewpoint the call back button is simple, it shows a willingness of the retailer to help, not just to relieve the customer of his funds and ultimately helps the customer answer questions on the product without abandoning the cart and purchasing elsewhere. From the retailers viewpoint the call back button is equally valuable. Not only does the retailer have the details of a customer that has registered an interest in a product in the stock list but also by speaking with the customer directly there is an opportunity to upsell a more superior (and more profitable) product or cross-sell complementary products.

After sales support is also a key area in which the provision of information is valuable. Following a purchase, emailing the client with an acknowledgement of order and reference number for delivery tracking will encourage return visits to the site.

Streamlining the Checkout

The quickest way to frustrate a customer is to have a confusing and complex procedure for purchasing the products. Streamlining the checkout process will reduce the likelihood of cart abandonment. Research has shown that if a customer has submitted a form with their billing details and delivery information that has an error, a significant proportion will not repeat the process on an entirely new form. Consequently using a cache that retains the information entered into the form apart from the field in which there is an error will minimise cart abandonment that is caused by having to re-enter all the information again.

Additionally, the number of pages in the checkout process should be kept to a minimum.  Perhaps it may be advantageous to have an express checkout process for customers who, for example, either have the product SKU to hand or do not have the time to decide whether they want a gift-wrapping service or would like to add a personal message to the delivery.

Another approach to streamlining the checkout process, particularly for repeat orders is to use a login process, or cookies that recognise the client’s computer and immediately pulls up their details, minimising the amount of information that has to be re-entered.  Caution must be exercised here as a significant number of customers find having to undergo a registration process prior to a purchase, a bind, and will consequently abandon their carts.  With this in mind it may be prudent to only offer the registration process to new customers rather than compel them to register before purchasing their products. Furthermore the ability to provide a multiple ship-to option is an expedient tool particularly for commercial customers or for public customers especially around holiday times when the purchase of gifts online significantly increases.

There has been a recent trend in the use of process-flow diagrams that outlines the checkout process page by page.  However it is possible that by showing customers how far they are from completing their purchase will only encourage abandonment.

Gaining Customer Trust

Establishing customer trust is a central theme in helping to alleviate all factors responsible for shopping cart abandonment.  The most important field in establishing trust is customer privacy.  According to Union Banks ‘The PORT’ more than 20 percent of respondents to the Ziff Davis Smart Business reader poll said they had stopped an eCommerce transaction because they felt the site wasn't secure.

Consequently it is of fundamental importance for online retailers to ensure the privacy of their clients in a clearly worded easy to find ‘Policy’ or ‘Terms and Conditions’ statement.  Additionally if the retailer’s site uses cookies, then details of how cookies work (in layman’s terms) should be included.  It is also necessary to allude to the widespread nature of cookie use.

Perhaps most important is the display of the encryption standards used by the site. The best approach is to use recognisable brands such as the VeriSign logo and an accompanying explanation of how the client’s credit card information is transmitted safely to the site’s servers.

Improving Site Reliability

A proportion of customers also abandon carts as a result of site unreliability.  If a site’s pages take a long time to download to the browser and frequently do not load at all, then naturally customer confidence will not be inspired. Customers are likely to abandon carts if they think that their billing security is being compromised by this unreliability in page downloads.  Abandonment may also occur if customers believe that there is a possibility that they may have to pay twice for their purchase due to some error in the submission of the payment forms.

There are several solutions that may alleviate the problem and should be given serious consideration if traffic to the site is high. The simplest solution is to optimise the site pages for download times. The most common content related cause for long download times are large and complex graphics.  Consequently they should be resampled to a smaller file size thereby reducing download times. Slow download times may also be a result of low bandwidth problems.  Client-side bandwidth issues relating to dial-up modems cannot be addressed, however the server-side bandwidth issue can be expanded to ensure that supply exceeds demand.

The sever-side system architecture may also be scrutinised to improve download time and reliability.  Redundancy measures should be revised and load balancers should be installed if demand is high.   Additionally procuring high-end hardware will improve reliability and ensure technical support is on hand should there be any outages.

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5 steps to reducing shopping cart abandonment

1. Remove Hidden Costs: Honest cost information is key.  The shock of finding out about shipping costs at the checkout rather than the start will make customers bolt.
   
2. Improve customer retention: It is human nature to gather information and compare products prior to a purchase.  If the site can supply sufficient relevant information and side-by-side comparisons it will lower the need for the customer to leave the site.
   
3. Streamline the checkout process: Keep the number of pages in the checkout process to a minimum.  Offer repeat customers the option to save their billing details so that the checkout process will be minimised in future. Offer an express product search and checkout process for those with the SKU number.
   
4. Gain customer trust: Explicitly state the customer privacy measures regarding their credit card information in the site ‘Terms and Conditions’ section.  If your site uses cookies alleviate customer fears by explaining clearly what they do and how common their usage is on eCommerce sites.
   
5. Improve site reliability: Sites that do not load or load slowly will not inspire customer confidence.  It is important to ensure that the pages are optimised for downloading times, there is sufficient server-side bandwidth, and that the system architecture is configured with high traffic contingencies in mind.