Shopping cart abandonment is every online retailer’s worst nightmare. As marketers and product leads, we’re well-aware that (1) buyer journeys are complex and (2) the process of guiding audiences to the point of transaction is extremely challenging. We rely on signals to evaluate whether our customer acquisition, engagement, and retention programs are performing optimally. ‘Add to cart’ is the ultimate signal that we’re doing something right — that is, until something goes horribly wrong, and users don’t complete the transaction.
For most of us, shopping cart abandonment is a frustrating black box that kills our conversions. And yet, industry-wide data suggests that these trends are the norm rather than the exception:
- The average documented shopping cart abandonment rate is almost 68 percent, according to a study from Baymard.
- Forrester Research (via ConversionXL) says that the estimated total of annual abandoned shopping cart revenue is around tens of billions of dollars.
- ConversionXL points out that in Q1 2013 the average shopping cart, basket and booking abandonment rate among top 200 retailers was 73.6 percent (up from 70.7% in Q4 2012).
Why Shopping Cart Abandonment Happens
You may think that shopping cart abandonment happens because customers click ‘add to cart’ before making a complete decision. According to data compiled by Statistica, ‘indecision’ is reason #5 for abandonment.
The top three reasons for shopping cart abandonment are as follows:
(1) Buyers get frustrated when they’re presented with unexpected costs (56%).
(2) Consumers were just window shopping never intended to buy in the first place and are just browsing (37%).
(3) Shoppers were committed to buying but ultimately found better pricing elsewhere (36%).
These are challenges that can be fixed. Here are some steps that can be taken to tackle the top 3 reasons for shopping cart abandonment.
1) Unexpected Costs
Some companies (for instance, entertainment sites and concert ticket vendors) are notorious for surprising buyers with unexpected surcharges and priced. From a customer’s point of view these undisclosed fees are more than just unwelcome — they’re deceptive, and they’re a deal-breaker.
It’s completely reasonable for a retailer to pass certain fees — such as shipping, taxes, and processing costs — to consumers upfront. But don’t wait until customers have entered the checkout flow. Instead, be transparent, and alert consumers ahead of time. And don’t just explain what the fees are — explain why you need to charge them by allowing shoppers to ‘learn more.’
For inspiration, take a look at how the Gap brands break down prices for shipping and coupons in an easy to scan section, early on in the checkout flow:
It’s true that we do, in fact, shop with our emotional brain, but we’re also extremely rational people who empathize with businesses that are working hard to deliver great service. With some context about what we’re paying, we’re likely to be more understanding about what we’re buying, recognize the value of what we’re buying, and complete the purchase funnel. Be transparent about these details, early on. You don’t want to unintentionally trick people.
2) Shoppers Who Are ‘Just Browsing’
Are your website visitors just taking a look because they’re curious? That’s totally fine.
Buyer journeys are complex, and ‘exploring’ is often the first stage of the conversion funnel. Consumers are highly self directed, and if they like what they see, they’ll come back and make a purchase — even if you’re promoting a deal or coupon code, rest assured that buying journeys tend to be more sophisticated than pure direct response.
You still need to take steps, however, to navigate shoppers through the conversion funnel without annoying or hard-selling them. Instead, give prospects resources to help them learn and stay empowered such as buying guides, fashion tips, and photos. You can also keep them engaged by running retargeting campaigns to remind them of products that they’ve recently looked at.
For inspiration, check out fashion retailer ModCloth. The company has built an engagement and retention machine through content, behavioral retargeting, and other mechanisms to keep prospective shoppers interested.
Here is an example of a retargeting campaign on Facebook:
Here is an example of ModCloth’s ‘wishlist’ feature, which allows prospective shoppers to take action in saving items that they are potentially interested in buying.
If your website visitors aren’t ready to make a purchase, don’t worry. Just give them the resources to make an informed decision, and remain present along the way.
3) Competitors Offering Better Prices
Consumers are highly research driven, and they’re always on the lookout for better prices — up to the very last moment of making a purchase.
There are a few ways that online retailers can prevent churn and keep consumers from flocking to competitors:
- Offer a price-match guarantee throughout the checkout process so that customers are always aware that this option is available.
- Be active in listing coupon codes on websites like CouponCabin and RetailMeNot, where shoppers are often browsing deals. A coupon code could potentially beat a price match guarantee from elsewhere.
- Offer additional perks such as a (really awesome) loyalty program so that shoppers don’t even look elsewhere.
- Make it really easy for shoppers to read about products on your own website so that they don’t have to look elsewhere.
Final Thoughts: Personalize Experiences
When shopping, consumers are looking for products that speak to their exact needs. Up until recently, these 1:1 experiences were impossible to achieve at scale, but thanks to technology, personalization is now feasible. Harness the power of marketing automation to understand each user individually and take your customer acquisition and retention strategy to the next level.
What tactics have helped you minimize customer churn and shopping cart abandonment? Share your thoughts in the comments section below.