August 2006 - Online Strategies

The Perfect Shopping Cart

By Ken Burke

Online merchants put enormous effort into merchandising to their customers through sophisticated websites. They use a wide range of strategies to get customers to increase the number and size of purchases. To many merchants, the shopping cart is simply a tool for getting customers to checkout. But shopping carts are much more. They are critical to your effectiveness in getting customers to make purchases.

Much to the dismay of online merchants, shoppers add products to their shopping cart then leave without paying. They’re not shoplifting; they are abandoning the cart. Research by Forrester finds 88 percent of online shoppers have put items in their basket and left the site at least once without completing the purchase. The lost revenue for your business can be staggering. Imagine you have revenue of $10 million and an abandoned cart rate of 50 percent. If you could reduce that rate by a mere 5 percent to a rate of 45 percent, the result would be an extra $1 million in sales. Of course, if the cost of reducing abandoned cart rates were high, it would be a difficult choice to make. Fortunately, all it takes is an awareness of what pushes customers away from your site, plus a willingness to implement proven elements for keeping them on the path to purchase and increasing average order size.

Ironically, your overall abandoned cart rate is not the most critical issue: equally important is a change-an increase-in that rate. An increase indicates something is going wrong, that your site is either failing to induce customers to get to checkout or is pushing them away. The average abandonment rate even varies, depending on the type of online merchant. Store-based retailers have the highest average abandoned cart rate at 59 percent, while catalogers typically experience abandonment rates of 43 percent. Brand manufacturers and pure e-tailers fall somewhere in between.

The differences are due to known traits of shopping behavior-67 percent of online shoppers who have abandoned a cart check multiple channels for prices before purchasing and one-third of shoppers use the online venue for research before making the purchase in a store, according to Forrester Research. This means there will always be abandoned carts due to many factors that are not under your control. The objective here is to help you identify the factors that are under your control, and reduce your current abandonment rate to the lowest it can be.

There are many reasons why online shoppers give up on a full cart before they get to checkout. Large surveys of demographically varied shoppers reveal the most common explanations. For one, it is not because they are less financially capable of paying for products-online buyers have an income that is 12 percent higher than the average consumer, according to Forrester. The top reason for abandoning a cart is shipping cost: 57 percent of online shoppers do not want to pay this cost. This is an example of the larger problem of sticker shock. Forrester found that 72 percent of online buyers expect the price to be lower online than elsewhere. That explains why 48 percent say the reason they abandon their cart is because the total price is higher than they expect it to be.

Additional reasons for shopping cart abandonment typically fall under two categories-factors influencing consumer purchase motivation and challenges posed by website design. The good news is that you can counter the negative effects of all these obstacles in the path to purchase. In fact, you can build the perfect shopping cart.

The perfect shopping cart is not a single list of elements that every online merchant should implement. Your perfect shopping cart is different from what is ideal for another website in a different industry; it is even different from the perfect shopping cart for a competitor. What all perfect shopping carts do have in common, though, are elements that increase customer confidence, provide the right information at the right time, and make the shipping experience easier.

For example, you can reduce your site’s abandonment rate significantly by allowing customers to save their cart and return later. Even easier is showing them the shipping and tax rate as early as possible-as soon as they add a product to the cart-and the result is a reduction in abandonment. Forrester found that many sites do not provide contextual help at the right time-meaning a customer needs an answer to a question about shipping, returns or customer service and cannot find it. The result is frustration and cart abandonment.

There is a set of simple, powerful guidelines to create the perfect shopping cart. Keep in mind the shopping cart is the first page of the checkout process; and therefore, the most important. As you build the perfect cart, keep these principles in mind:

  1. The shopping cart must be present and accessible throughout the entire shopping experience.
  2. The shopping cart must enhance and build trust with the customer.
  3. The shopping cart must be easy to use and reduce known purchase barriers.
  4. The shopping cart must preserve the relevant shopping experience and not interfere with the path to purchase.
  5. The shopping cart should be used to increase the average order size by informing, merchandising and making clear that your products are unique, special and different.

Following these principles ensures the shopping cart remains a critical and positive step in the overall buying process. Given its importance, you owe it to your bottom line to improve the shopping cart experience and keep the abandonment rates as low as possible.

Before embarking on the development of your perfect shopping cart, you can try to find out why your customers are leaving without buying by conducting an abandoned cart survey. There are two approaches. The first is to put a window with a survey request in front of them when they abandon their cart. This is an aggressive but effective approach. The second is to send them an e-mail-assuming they are registered or have provided e-mail contact information-asking them to take the survey. Customers are brutally honest when they are unhappy and a survey is an excellent opportunity to learn or confirm why carts are being abandoned.

This is particularly true if you have made a change to your site that was intended to stimulate business but may be having the opposite effect. In the survey, you can ask both specific questions about elements on the site that could be affecting cart behavior, as well as open-ended questions that let your customers give their own reasons.

You may use the information from the survey to implement any or all of the techniques that adhere to the principles of the perfect shopping cart. All will lead to a better shopping experience and healthier bottom line.

Ken Burke is founder and CEO of MarketLive Inc., a leading provider of e-commerce software and related solutions based in Petaluma, Calif. He can be reached at (877) 341-5729.


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