Wipe Out Shopping Cart Abandonment

These tips will help you turn clicks into cash.

By Eddie Davis

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Imagine you owned a store where half your customers left their purchases on the checkout counter. That, in effect, is happening all too often to online merchants. Potential customers go shopping on their site, like what they see, and put merchandise in the shopping cart. But somewhere during the checkout process, they "abandon" their cart and depart the site, sometimes never to return.

What went wrong? As an online merchant, knowing the answers can make a big difference in how well you convert a customer's clicks into an actual sale.

Studies have demonstrated that the single biggest cause of cart abandonment is an unexpectedly high transaction cost--typically a high shipping cost--that is only revealed at checkout. A customer believes a transaction is going to be about $75, steps up to the virtual counter, arranges payment, only to learn that the actual total is $100. We shouldn't be surprised if that shopper "walks off" in a huff. Indeed, shopping cart abandonment is often a sign of deeper troubles for the merchant. It's not just an indicator of a lost sale, but also of a troubled relationship. If customers have a sense of being baited and switched, their overall confidence in the merchant gets undermined.

The problem is aggravated by the high variability of shipping costs. During a recent online shopping excursion for a stationary bicycle, I found that shipping fees ranged from "free" to $150. That's a huge difference. And yet in many cases, the total "out-the-door" cost wasn't apparent until deep in the checkout process.

What can merchants do? First of all, you should keep shipping costs in line with customer expectations. A small, lightweight item like a pair of socks, a garden trowel or camera battery shouldn't cost $17 to ship. And adding one of these items to an existing purchase shouldn't cost $17 more. Some merchants have taken the mystery out of checkout by offering free shipping across their product lines. But if you can't afford that, at least give shoppers an early, clear indication of the actual cost. And while this might sound obvious, the same advice also applies to good news: Tell customers about special discounts, coupons and other incentives up front, not at checkout. The guiding principle: When it comes to payment, online shoppers don't like surprises.

Security and comparison shopping
Cart abandonment happens for other reasons as well. Sometimes customers are uneasy about handing over their personal information, including credit card numbers, to an unknown merchant. You can remove that concern by offering multiple options for electronic payment, including services that allow payment without disclosing financial information to the merchant.

Some customers don't click on the purchase button because, at the last minute, they want to assure themselves they are getting the best possible deal. The temptation is understandable. E-commerce has matured since its early days, and customers are the beneficiaries. More sites are competing for their business, and customers can use "shopping engines" to compare price and merchant reputations at a glance. The obvious advice: Keep your prices competitive and your service exemplary so that new customers keep coming back. In looking for the ultimate bargain, some customers depart to seek out discount coupons. If your competition is trumping you with this tactic, perhaps you should follow suit.

Sometimes, the barrier to purchase is not cost, but an unanswered question. "How long do I have for a return?" "Can I see the manual?" "Do you have it in green?" "Can I include a Valentine's card?" No merchant can anticipate every question, nor will every customer locate every snippet of information on your site. So don't hide behind your website. Provide a telephone number, an e-mail address, or both--and respond to queries promptly and personally, taking the time to hear the actual question.

Finally, some shoppers abandon their carts simply because they cannot figure out how the checkout process works. If your customers are hunting for the "purchase" button, it's time for a site redesign--preferably with something simpler.

I don't want to paint too grim a picture. Most people who enter checkout hit the purchase button. Your goal with these measures is simply to increase that percentage. Moreover, an abandoned cart is not the same as abandoned hope--a surprising number of shoppers will return and make a purchase later on. You should welcome them back like lost friends. Keep their merchandise in their cart. Offer them discounts. If they do make a purchase, take extra care to make sure they are happy. In other words, you'll make the most sales when everything clicks.

Eddie Davis

Eddie Davis is the senior director of merchant services at PayPal and is responsible for providing PayPal's payment processing services to thousands of small and medium-sized online retailers. Davis joined PayPal in 2005 with a background in merchant sales and acquisitions.

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