What’s your idea of a streamlined checkout process?
Cart abandonment is nothing new for online retailers. In 2013, roughly 74 percent of shopping carts were abandoned, a number that climbs a point or two every year, according to a study by BI Intelligence. That’s an estimated loss of $4 trillion. Reversing such a trend and getting shoppers to complete their purchases is one of the biggest challenges online retailers will face in the next few years.
Here’s how you can do it.
Causes of Cart Abandonment
Three-quarters of respondents to the BI Intelligence survey said they intended to return to a retailer’s site or store to complete their abandoned purchases. But three-quarters still leaves $1 trillion in sales in the wind.
The main problems relate to cost. Eighty-six percent of online shoppers are unpleasantly surprised by what they perceive as high shipping costs tacked on at the end. Total cost of the order is another key reason cited by nearly three-quarters of shoppers. Consumers also cite difficulty of returns and security of the payment system as reasons for not completing transactions. As card breaches multiply, concern about card-not-present fraud increases. For example, nearly one-third of Americans indicated they wouldn’t buy online last holiday season due to security concerns.
Those issues aside, a large portion of shoppers abandon carts before even reaching the payment stage. BI Intelligence reported:
- Checkout login accounts for 37 percent of cart abandonment
- Twenty-one percent bail out at the point of entering their address
- Twenty percent leave at the entry point for shipping and delivery address
Solutions to the Problem
A common way of reengaging consumers is to retarget them with emails after they abandon their carts. Consumers have become wise to the ways of getting a better deal, however, with many abandoning their carts to see if the retailer will offer a discount or free shipping to close the sale.
Shipping once served to help online retailers cover their margins, until Amazon Prime reset the table stakes. Walmart recently abandoned its version of Prime to lower the threshold for free shipping to $35 – lower than most but not as low as some retailers, such as L.L. Bean, which offers free shipping as standard. While retailers need a way to cover the cost of free shipping, consumers don’t understand why their $8 purchase becomes $20 after taxes and shipping are added.
That’s why streamlining the checkout process would make a difference. Faster, easier and safer would entice consumers to complete transactions now – and make them feel more secure about doing so. For instance, what if you could register once and get an easy-to-use security token that would enable you to shop universally? That token then would serve as a key, unlocking all retail sites – treating you like a return customer, but not transmitting your personal data. Then, your thumbprint or a code could authenticate and automatically populate your payment, billing and shipping information. The result would be a hassle-free checkout that put the focus on the goods you’re buying instead of the purchase itself.