A recent study finds that getting customers through the checkout process is becoming harder than ever, deliberate cart abandonments have nearly doubled since last year. – src. Bizjournals.com
As online retailer the most important part of the online buying process is how your customers get to the “Thank you page”. An online transaction isn’t complete until consumers make it through checkout. A recent study finds that getting customers through the checkout process is becoming harder than ever, and deliberate cart abandonments have nearly doubled since last year. Cart abandonment happens, both when shopping online or within actual physical store.
Two possible reasons why people abandoned shopping carts:
- they may not have the money they need to complete the transaction; or
- they may decide to look at another retailer for lower prices;
With too many e-commerce websites across the country the recent state of cart abandonments have been tied to consumers who are looking for a better price from the retailer. To consumers who are techno-savvy they know that many online retailers have triggered email campaigns that kick in after a certain period of time after a person abandons their cart. These triggered emails often have coupon codes (e.g. 10 percent off if you go back and complete your order or get % of discount on your 2nd purchase or earn shopping points that you can redeem in your future purchase).
While shopping cart abandonment has always been a problem for online retailers, but there is evidence that the situation is getting worse for online retailers. According to a study of 300 online retailers in the U.S. and U.K., there was a significant increase in the number of online shopping carts that were deliberately abandoned. In the past year, the percentage of deliberately abandoned carts nearly doubled. It was at 8 percent previously and so far, it’s 15 percent for this year.
Though the existing re-targeting technology is an efficient way of attracting customers to come back, the data suggests that consumers may be abusing this approach in order to obtain a reduction in cost.
The Side Effect
An unfortunate side effect of this marketing practice is that it encourages business owners to artificially inflate their prices since they know people won’t buy unless they get an additional discount on the sticker price.
This is what happened to JCPenny a few years back. The retailer stopped offering coupons and special prices, believing that customers would welcome a clearer pricing scheme. They eventually had to backtrack when it was discovered that people liked the whole fake pricing and saving with coupons. Consumers like getting discounts. So if a business has their prices set so low that they can’t afford to give a discount, it would be wise to raise the price slightly just so it’s possible to offer discounts that make people feel like they’re getting a good value.
There are three ways in which retailers can approach this deliberate abandonment behavior:
- Retarget only new customers;
- Limit discounts to more profitable products; and
- Ensure technology used can apply multiple filters and offers.
The study also provided some insight onto other things that cause people to abandon carts. One in three consumers did not complete a purchase due to delivery cost and about one in four said they did not like being forced to create an account before the purchase could be completed.
Fact: These issues can be addressed through better shipping options and using social logins to reduce the hassle of creating an account.
As today service-oriented information such as store locations and hours, stocking information, and contact numbers is what today’s consumers want, instead of a hard sell.
Below is a shopping cart abandonement infographic to help visualized the rising trend.