Shopping cart abandonment. We’ve all done it. Some of us have even done it in an actual brick-and-mortar retail store (you know, putting an item back in the wrong place or telling the cashier as you’re checking out that you’ve changed your mind on an item).
But “shopping cart abandonment” happens a lot more frequently online where there’s less judgment and more external distractions. In fact, abandonment happens more often than an actual purchase. According to the Baymard Institute, 69% of online shopping carts are abandoned—illustrating that even though it’s easy to find what we need online, it’s just as easy to change our minds, close the browser, and move on.
Shopping cart abandonment is an inherent part of online shopping. For many, browsing online is about research, price comparisons, gift ideas, saving items for later, or a way to offset boredom.
However, for those that aren’t “just browsing,” the top five reasons for shopping cart abandonment are:
- Extra costs too high (shipping, tax, fees) - 61%
- The site wanted me to create an account - 35%
- Too long / complicated checkout process - 27%
- I couldn’t see / calculate total cost up-front - 24%
- Website had errors / crashed - 22%
All of the reasons above come down to two things: user experience and logistics. So, how do you solve for those and make it easier for your customers to shop with you?
User experience design: Surfacing the right information at the right time
According to Baymard, four of the top five reasons for shopping cart abandonment have everything to do with user experience (UX) design and website functionality. But UX design is a complicated. It includes brand identity, website design, and usability. It can make or break a purchase before a consumer is even ready to buy.
First impressions are everything
Your website may be the first interaction a customer has with your brand. If it is hard to navigate, challenging to find something, or even just a little bit clunky, you can lose a potential customer. And all of that can happen in the “just browsing” phase before a shopper has even considered you as a viable option.
Even if someone is in the “research” phase, if your site is clean, organized, easy to use, and gives them the information they need, there’s a higher chance they’ll return when they are ready to make their purchase.
Turn a first impression into a lasting one
We aren’t UX experts, but there are a few ways in which UX design can augment the buyer’s journey by putting the right kind of information in front of your prospective shoppers at the right time.
If your shoppers have to jump through hoops so they can see what they’d be spending with you, you’re more likely to lose the sale. Consider this: If 61% or shoppers abandon carts because extra costs (shipping, tax, fees) are too high, then they probably couldn’t figure that out soon enough in the process. Similarly, 24% directly reference the inability to calculate total costs up-front as a factor in abandoning a purchase. That’s a lot of lost sales.
Instead, if you can improve your website design to surface information more quickly, you can help your shoppers make faster, more informed buy decisions. That’s something they can trust and will remember.
Now, let's talk about the #1 offender: Shipping and logistics
Overwhelmingly, the number one reason for shopping cart abandonment are the extra costs associated with completing a purchase. Sixty-one percent of shoppers will abandon a purchase because of the shipping rates, taxes, and fees associated with completing the purchase.
Additionally, another 16% of respondents cited “delivery was too slow” and 10% said “returns policy wasn’t satisfactory.” Clearly, logistics play a role in eCommerce purchasing decisions. More importantly, it highlights an opportunity to improve conversion rates by updating inventory management and fulfillment strategies.
New industry standards
It’s hard to compete with the instant gratification of an in-store purchase, but eCommerce retailers are well on their way to creating a compelling alternative with faster, more affordable shipping.
In particular, Amazon has been the leader behind evolving customer expectations. Just a few short years ago, five-to-seven business days at a premium was the standard, but that has been replaced with free, two-day shipping, and same-day is not far behind.
In order to convert more sales, eCommerce retailers have to price products competitively and reduce shipping times and costs. For many, it’s going to come down to rethinking logistics.
Did you know?
- 73% of shoppers today want affordable, fast shipping
- 49% want free shipping and 35% want easy returns
- One of the top features when making a purchasing decision is delivery speed (54%)
- Shoppers can shop anywhere—even when they’re shopping: 76% of shoppers use their smartphones while shopping
How to reduce shipping costs and times
If your logistics and delivery promise are sacrificing sales, then it’s time to consider a new solution.
eCommerce retailers can’t afford to forfeit sales because operations can’t keep up with customer demand. The cost is too high. You know the adage: It costs five times as much to attract a new customer as it does to retain one. What if your delivery promise became an inherent part of your customer retention strategy?
It’s estimated that 10% of retail sales will come from online in 2017, and will account for 18% of U.S. sales. That’s more than ever before and the number is only climbing. As more and more sales move online, eCommerce retailers will have to bolster logistics to stay competitive and win more sales with a more compelling delivery promise—all of which needs to be scalable.
Unfortunately, traditional warehousing solutions can’t offer the level of flexibility needed to grow and improve shipping times and costs.
eCommerce retailers that want to reduce shopping cart abandonment and improve customer retention through a better delivery promise need a nimble solution for inventory management and fulfillment. It also means getting more products closer to demand centers to reduce shipping costs and times.
While a new logistics strategy is no small feat, consider the payoff. If the average eCommerce website is losing 69 out of every 100 shoppers, what’s that costing you? Shopify ran the math: If you make $15,000/month in online sales and could convert just 25% of those abandoned carts, you’d make an extra $45,000/year.
Current sales: $15,000/mo.
25% of $15,000: $3,750/mo
Total sales opportunity: $45,000/year in extra sales
By offering faster, more affordable shipping, you can decrease shopping cart abandonment. And, with the right solution, you can do it incrementally to test what size fulfillment network is right for you.
The uplift required is probably less than you think, especially with an on-demand solution that lets you call the shots.