December 13, 2010
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Affordably Build Your Brand
FedEx Global Brand Management Director Monica Skipper shares a cost-effective way to build a bigger brand for your small business.
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No businesses like tire-kickers, but most still welcome the opportunity to convert indecisive shoppers into satisfied customers.
Few businesses wrestle with the problem more than e-commerce companies. The average rate of online shopping cart abandonment reported in 2009 was 51 percent, according to Forrester Research. Others have estimated as high as 70 percent.
Virtual shopping cart abandonment has been a problem since online shopping was introduced. Initially, a large percentage of shoppers blamed a complicated checkout processes or lack of technical knowledge. But in the recent Forrester survey, only about 10 percent of respondents cited these issues as buying-decision busters.
Today, it seems one of the biggest causes of cart abandonment is high shipping costs—and it’s cited as the biggest cause in the Forrester survey: 44 percent of the nearly 3,000 people surveyed said they have abandoned a cart for this reason. “Not ready to purchase the product” was the second-most common reason for cart abandonment (41 percent), followed by a desire to compare prices on other sites (27 percent), and the price of the product itself being too high (25 percent).
With more consumers comparison-shopping and migrating across an increasing variety of purchasing channels, elevated cart abandonment rates are likely here to stay. But small e-retailers can go out of business by encouraging cart loyalty through lower prices. As a smarter strategy, researchers recommend these steps:
- Make shipping rates available early in the process and offer discounts when and where you can. Six out of 10 online shoppers indicate that shipping costs of up to 10 percent of the transaction value is reasonable. Not every retailer can afford to use a free shipping policy, but there should be room to play with shipping offers that are dependent on coupon codes or minimum orders. Whether you’re able to discount shipping or not, be sure the cost is clearly visible early and often to avoid surprises. In the Forrester survey, 22 percent of cart abandoners stated that shipping and handling costs were listed too late in the checkout process.
- Clear the path to purchase. While site registration is a valuable source of customer data, it’s also a painful source of millions in lost sales (as much as $20 million, according to a 2008 Forrester report). Online shopping consultants recommend creating the opportunity to check out as a guest, while offering registration as an option for future coupons and promotions.
- Reassure shoppers that their security is a top priority. In a 2009 survey by PayPal and comScore, 21 percent of respondents cited security concerns as a reason for abandoning a virtual shopping cart. Anne Holland, founder of the research firm MarketingSherpa LLC, recommends posting reassuring security icons throughout e-commerce websites. She also suggests including privacy and trust language next to any fields asking for personal data. “It’s stunningly easy to do, yet it drives me nuts to see how many merchants still completely ignore it,” she says.
- Create trust. Hand-in-hand with security measures is communicating your online store’s trustworthiness. Make your customers feel safe by clearly stating return policies and providing several ways they can reach you, including a phone number, email and postal address.
- Provide alternative payment options. Many shoppers prefer to use PayPal, Google Checkout or similar systems that enable them to complete online transactions without entering their financial and shipping information for each purchase. Forrester reports that 75 percent of online purchasers have an alternative payment account.
- Ask abandoners why they didn’t buy. Some online merchants have tested exit pop-up surveys for anyone who abandons a cart. Because these are frequently blocked by security software, you may have better luck sending a follow-up email. This way, you can notify customers that their already-filled carts are waiting if they want to return to your site, while inviting them to explain why they didn’t complete their purchase.
- Encourage customer reviews by offering discounts to those who provide them. You can encourage online shoppers to share their thoughts by following up purchases with personal emails or adding a link to your e-newsletters. Satisfied customers are your most powerful marketing tool, after all.
Paul Nolan is editor of SalesForceXP magazine, a bimonthly publication that provides sales managers with insights for getting “Xtra Performance” from their sales teams.
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VenpopHQ 6 months ago
Great post about the problem that is shopping cart abandonment! I recently came across this infographic for ways to avoid this trend that you may be interested in http://venpop.com/2011/how-a-wish-list-can-help-avoid-shopping-cart-abandonment-infographic/