Published July 12, 2022
People are increasingly moving online to purchase all sorts of items. However, that’s leading to a phenomenon known as cart abandonment. Even when people seemingly decide to buy, most of them bail out of the process before they get to the end. While some people will inevitably change their minds, their decision is often due to problems in the buying process. Get these right and you might unlock a considerable amount of missing revenue for your business.
Buying online is like buying in a shop. People will browse the aisles (in this case the website), pick a product they like, put it in their shopping cart and head to the checkout. However, somewhere between here and the point at which people pay for their purchase, a number of them will change their mind.
That percentage is remarkably high. In general, around 80% of buyers abandon a site after adding something to their cart. These figures hurt retailers. By putting an item into their basket, customers are expressing a clear intention to buy. A high abandonment ratio represents revenue retailers are potentially missing out on.
The reasons may vary. Sometimes potential buyers may have come to their senses and decided it is too expensive after all. Other times, they might have become frustrated with the buying experience and decided to see if they can buy it more easily elsewhere.
Every year, retailers spend $23.50 bn on digital ads to drive revenue to their websites. However, the average conversion rate for websites still hovers below the 3% mark. With online sales expected to reach 22% of the overall market in 2023, compared to 14.1% in 2019, abandonment rates are becoming increasingly important in terms of revenue. Forrester estimates brands lose an estimated $18 bn every year due to lost revenue opportunities. Around $4 tn worth of merchandise is predicted to be abandoned in shopping carts next year alone. Moreover, as ecommerce evolves and more companies get the experience right, customers are becoming less forgiving. They expect convenience and are less tolerant of any buying journey which is overly complicated, long or intricate. The margin for error is slim and getting slimmer all the time.
Solving these problems starts with understanding why people are abandoning their carts. According to date from Sales Cycle, 34% of retailers abandon carts because they are asked to create an account. About 23% abandon them due to issues with shipping and 18% abandon them because they want to compare prices elsewhere. What each of these have in common is that they all create an additional barrier between the customer and buying a product.
Creating an account takes time and involves trusting a retailer with your data. Any unforeseen problems with shipping can persuade people that the process is more hassle than it’s worth. Furthermore, the numerous choices on offer online means that buyers will always be tempted to see if the grass is greener elsewhere. Understanding this will help you design a seamless buying process which keeps people engaged until the end. Here are three possible options:
1. Remove barriers: Customers are impatient at the best of times. Just as in-store customers may walk out if they see a long queue, online buyers may give up if the process takes too long. Each additional process gives them more time and opportunity to reconsider their decision. The more you ask of them, the more likely they are to give up.
2. Provide a choice: A rigid payments structure can alienate many customers. As mentioned above, asking people to make an account can put some off. At the same time, an account helps you give people a better service and will make the buying experience even easier next time around. To avoid turning people off, it can be useful to offer them a choice between buying as a guest and signing up to an account.
3. Provide a clear call to action: In some cases, people can be put off by what they see as an opaque and complicated process. This is especially true in the retail sector which, during the course of the pandemic, attracted many people who would not normally have been buying online. Keeping things simple and providing a clear call to action which lets people see how to move to the next stage is a great way to guide them through the process. For example, having a buy now button, or anything which shows them how to progress to the next stage is a great way to keep people engaged and move them through the buying process.
Ultimately, it’s about creating an online buying experience which is shaped around the way people shop online. Companies have become much better at providing ecommerce functionality. They have ironed out many of the kinks and brought in new features to make the process faster and simpler. However, buying behaviour is changing and expectations growing. Staying up to date with those changes and giving people the online buying experience they want will be one of the biggest challenges of the next five years.
Related: Develop long-lasting customer satisfaction with a robust retail strategy
Looking ahead, we are seeing a dramatic shift in how customers interact with businesses. The pandemic triggered a dramatic acceleration of people shopping online. Even those sectors in which people usually shop in person saw ecommerce use shoot through the roof.
However, the trend is more nuanced than one from offline to on. Customers are looking for an omnichannel experience with lots of choice and flexibility. They are mixing on and offline purchases and expect the same seamless experience through all channels. For example, curbside pickup sees people placing an order online before going to pick up an item in store.
As well as online, people are also turning to mobile platforms. These sites have very different experiences to desktop websites, which is one reason why mobile customers traditionally have a higher cart abandonment rate than other online users. Companies are having to implement mobile websites to ensure they can be read effectively by smartphones, tablets and other devices. These adhere to very different rules but have the same goal of making the information more accessible and the navigation process easier from a mobile device.
Lastly, the rising number of payment options also puts pressure on retailers to up their game. From credit/debit card payments to mobile wallets and even cryptocurrencies, people want to be able to choose their own payment method. If they can’t find their chosen option on your website, they may decide to select one that they can.
The challenge is considerable for retailers. Technology is evolving rapidly and, as it does, customer expectations and behavior is adapting. Those who fail to move with the times will see rising numbers of abandoned carts. To avoid that, they need to give people what they want, namely, choice, clarity and a simple, easy to use platform which removes all the barriers which prevent people from buying.
It's an ongoing process and you may find yourself having to react to changes as they happen. In a fast-moving commercial world, retailers need to become fast-moving and adaptable to keep up.
David Wilkinson, President, NCR Commerce on the Future of Self-Checkout, POS & more