How Retailers Can Reduce E-Commerce Cart Abandonment
2020 was a difficult year for retail, but the adoption of e-commerce increased significantly as people forced to stay home had to find different ways to purchase what they needed. The increase in website visitors was impressive but masked a major issue with the shopping cart abandonment rate. End-of-year reports put the cart abandonment rate for desktop at 69 percent, and even higher on mobile at 85 percent. Cart abandonment has always been a challenge for retailers, but the fact that it got worse points to a systemic issue.
It's All About Perceived Value
There are many reasons why shopping cart abandonment is high. It starts with the fact that people do a lot of browsing and will add items to the cart, almost like a wish list, and use that to shop on other sites as they search for the best deal. More than ever, consumers want control and don’t like surprises. This aligns with the issue of anxiety and how consumers easily develop doubts that they may not be getting the best value or that they don’t understand all the details, which could cost them in terms of time and money.
At the end of 2020 there were two clear themes that resulted in anxiety and consequently cart abandonment:
- Unexpected shipping costs, fees, and taxes: Sixty percent of shoppers abandoned their purchase when met with higher than expected shipping costs or additional fees and taxes at the point of purchase.
- Longer delivery or pickup times: This was a cause for cart abandonment when consumers had an expectation of same-day delivery or pickup only to find out that it would take days or longer before they could get their purchase.
In both cases, the consumers do not feel they are getting their perceived value. This leads to frustration and since the online world makes it easy for them to quickly search for alternatives aligned with their expectations, they abandon the purchase.
The Problem is More Complex Than Most Realize
The shopping cart abandonment represents billions of lost potential revenue every year. The answer is about reducing friction points by providing consumers the information they seek and keeping the journey simple. Unfortunately, this is becoming more complex as markets evolve and customer expectations keep increasing. Until recently it would have been hard to fathom that curbside pickup for groceries and other retail items would be a staple. Today it is and consumers are now using that level of convenience as a baseline for other purchases they are considering.
Retailers have to consider where the friction points are and identify opportunities for improvement. The challenge to overcome is speed. Many of the tools used to track visitor activity accumulate data and only after enough of it has been generated can data mining begin in search of patterns.
Retailers also need to understand what customers want to see and in what order. This is the process of journey mapping. It can be hard to know how certain information may be more valuable earlier on in the journey to reduce anxiety and get the customer to go straight to buying. An example is presenting different delivery and shipping options with pricing and dates before the customer even adds an item to the cart.
AI Can Get Consumers to Hit the Buy Button Faster
Using historical data and analytics tools has its value, but the speed at which markets shift demands the ability to experiment with live and real customers to learn quickly. Retailers need a new school of thought and capabilities to continuously learn and optimize the customer experience (CX). Using Artificial Intelligence (AI) to experiment with CX delivers on the need for speed while handling increased complexity. AI enables retailers to grow intelligently and maximize each customer interaction by addressing critical aspects of the journey, such as reducing friction points and ensuring customers are getting the information they need to make decisions.
AI can optimize the whole customer journey at scale and serve up digital experiences relevant on different channels and to different types of customers. It can help companies decide what information to display and when, based on live customer feedback. AI learns from this feedback and immediately adapts which experiences are being served up to build on the success of the winning ideas and combinations. Getting customers to hit the buy button is about being able to connect all the dots to increase the number of visitors that go through with a purchase. AI is uniquely suited to make this a reality.
Michael Scharff is the CEO and co-founder of Evolv Technologies, an AI-driven solution for digital growth optimization that serves the best experience to each audience, every time.
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