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Guiding principles to minimize online cart abandonment

If online retailers are to minimize cart abandonment, improving the online checkout experience must be a priority.

Guiding principles to minimize online cart abandonment

Online Cart Abandonment has tormented digital marketers and eCommerce sites for years. Cart abandonment happens when a customer selects a product but then, for any number of reasons, leaves without purchasing. According to the Baymard Institute the average cart abandonment rate is nearly 70%, equating to billions of lost revenue every year.  If you have an eCommerce site, the data is clear, improving the online checkout experience should be a priority for your Brand.

The goal of all eCommerce sites is to drive sales, yet many brands still focus their primary attention on driving customers to their site instead of converting those that are ready to buy. Advertisers spend countless hours and millions of dollars building out a marketing strategy that drives awareness, interest, consideration, intent, and evaluation, but then they stumble at the proverbial finish line of the “Purchase” stage.  This common eCommerce mistake reminds me of the phrase “A bird in hand is worth two in the bush.”  This expression can be applied and relevant in many situations, however if you interpret it with the lens of an eCommerce Brand, it means; don’t lose a sale (bird in hand), while you spend budget chasing after potential customers (the two in the bush) who don’t yet know anything about your brand or product.  As a digital marketer this resonates with me; unfortunately, many eCommerce sites and Brands have never heard this, understood it, or may have forgotten this basic strategy.

There are many reasons why a customer may not purchase on your site once they put a product in their cart. Some of these lost conversions/abandoned carts you can’t control, but there are two guiding principles that successful eCommerce sites do to minimize lost sales once a customer gets to the checkout page.  In fact, I’m willing to bet in the last three months you have also decided against buying a product or service online (I, too, am a cart abandoner) because the Brand’s website did not follow the fundamental and basic principles of: 1) make it easy for the customer to buy and 2) instill trust and minimize risk. 

 

Make it easy for the customer

Brands spend thousands of dollars advertising their product, showing why their product is superior and why the customer not only wants it, they need it.  To improve conversions, eCommerce sites must remove any reason a customer has to leave the checkout page before buying, by doing the following:

  1. Offer a guest check-out option.  Many potential customers do not want to create an account, provide an email and create a password before buying, they want to buy now – make it easy for them!
  2. Make sure the Checkout is only one page.  Today’s eCommerce customer has come to expect quick transactions, and a frictionless buying experience.  Filling out multiple pages before completing a purchase is akin to shopping in a traditional brick and mortar store, finding the product you want – but then seeing a checkout line 20 people deep.
  3. Allow multiple payment options. We are not just talking about allowing both Visa and American Express; today’s online shoppers are using debit cards, PayPal, Klarna, Apple Pay, and Google pay.  There is no reason an eCommerce site should limit a customer’s ability to easily buy with common and popular payment options.
  4. Live Chat and FAQs on the Checkout page. Customers often will put a product in their cart, go to the checkout page but instead of purchasing they second guess their choice.  Do not force your customers to leave the checkout page or your site because they cannot get an answer to a product question.  The most effective eCommerce sites are using chat to address FAQs and make the checkout experience seamless and easy for the consumer. 

 

Minimize as much risk from the purchase experience and maintain trust

Studies and research have shown (Palgrave Communications, Han & Kim, Panwar), there is a tremendous level of perceived risk for customers when purchasing online.  For years, online retailers have been challenged to overcome customers’ unease with buying something they can’t touch, wear or try.  There is a very real emotional and psychological risk an online shopper senses; that of potential wasted time, lack of trust with the retailer and the expense of receiving and returning something that they do not like. To build trust with online purchasers and greatly minimize the perception of risk, the most popular and effective eCommerce sites always:

  1. Clearly show and explain fees and shipping costsNobody likes to be surprised by hidden costs at checkout, it gives the customer the impression that they are being duped. Research by WorldPay shows that unexpected costs at checkout, result in a massive 56% cart abandonment. Not only do you risk losing half of your sales, you may lose the opportunity to sell to that customer again.
  2. Offer a money-back guarantee and free returns. Nordstrom pioneered this level of great customer experience with their traditional “brick and mortar” stores, but online retailers such as eBay and Amazon have quickly embraced this strategy and minimized much of their customers’ purchase risk.  This strategy is so important in today’s eCommerce space that, as reported by the Baymard Institute, “80% of shoppers are deterred from making a purchase by the lack of a good return policy”.  No doubt there are increased costs associated with providing this level of assurance to your customers.  However, if you could potentially double your online sales and create a positive customer experience, the decision is obvious.

 

Final Thoughts

Cart Abandonment is a problem for online retailers worldwide. Forrester Research estimates revenue losses close to $31 Billion dollars due to cart abandonment.  eCommerce sites such as Amazon and eBay have improved their online sales by removing obstacles and annoyances in the checkout process, minimizing the perception of risk and building trust with their consumers.  Unfortunately, many Brands, Websites and Marketers are hyper-focused on upper and mid-funnel marketing strategies and drop the ball when it comes to cart conversion.  Making it easier for your customers to buy, while providing a better online customer experience will only improve your ROI and conversion rates. 

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