Tips for Preventing Shopping Cart Abandonment
Research indicates that 65 percent of retailers are more likely to sell to existing customers than to new customers, and it costs five times as much to attract new ones than to retain existing ones. It’s a clear challenge to keep and add customers to retail ecosystems. To e-commerce retailers, there are significant costs to generate new business, and the likelihood of a new visitor completing a purchase is cripplingly low.
We can further illustrate this problem via shopping cart abandonment. Even if consumers add items to their digital cart, 70 percent tend to get abandoned. Consumers get distracted and leave, they think they can get a better deal elsewhere, or decide not to purchase altogether. Out of 100 carts, only 30 will convert to actual sales — the math isn't pretty. To make it worse, January 2022 marked 20 consecutive months of year-over-year online inflation.
Consumers are increasingly concerned about rising costs and cautiously abandoning their carts. With that in mind, how can e-commerce businesses work smarter to land much-needed purchases?
1. Rethink purchase policies.
Consumers want to feel that their unique needs are understood and are actively being taken care of when taking the final action in their buying journey. According to a new report, checkout completion rates average 56 percent for desktop and 45 percent for mobile when shipping is free. Even a slightly higher shipping fee that was once just a nuisance is now a deal breaker to consumers bracing themselves to pay more for purchases. Research also indicates that 40 percent of shoppers are more confident to buy if an e-commerce shop has multiple payment options.
Consumers are becoming increasingly accustomed to receiving their goods easily and quickly, and shoppers have preferences on how much they're willing to spend and how they would like to pay for items. Retailers can address abandonment issues by taking steps to clearly display prices and costs before checkout, and ensuring they're easily calculable. Establishing further customer-centric options such as same-day pickup and an easy-to-follow return policy can provide the confidence they need to complete their purchase.
2. Establish efficient checkout power.
Nearly one in five online shoppers who abandon their shopping carts blame complicated checkout processes. It’s an inconvenience that’s led to $260 billion worth of lost orders that could have been recovered, not to mention declined sales from orders placed by legitimate customers that are accidentally flagged as fraudulent.
As inflation continues to impact sales, retailers need all the help they can get to make shoppers’ experiences as painless as possible. It’s why 77 percent of shoppers prefer buying on Amazon.com due to its easy checkout process.
Upgrading checkout processes by analyzing and then eliminating friction and pain points can result in an immediate increase in conversions. Examples include functionality for automating login credentials and payment info, keeping back-end software up-to-date to avoid technical errors or websites from crashing, clearly displaying payment security badges and credentials to create consumer trust, or ensuring fraud prevention solutions don't continue to decline the one in six legitimate shoppers that were declined at least once last year. Even rethink tactics that supposedly drive loyalty, like requiring customers to create a store account. That step alone accounts for 24 percent of cart abandonment.
Nearly six in 10 U.S. consumers admitted that they proceed with caution with hitting the “buy now” button. However, there are many other layers of friction that can be eliminated with the right checkout processes.
Getting new visitors or returning visitors to shop your e-commerce business is futile if they leave without completing a purchase. Spending time to reconsider store policies and upgrade checkout solutions can result in an enormous payoff.
Isaac Gurary is the CEO of NoFraud, a provider of e-commerce fraud prevention and revenue protection.