While many merchants are looking ahead to the official mid-November start of the holiday season, the decisions you make in the next 30 days may prove more valuable to the 2010 success of your e-commerce business.
In 2009, the stretch between Labor Day and November 15 was notoriously bleak as consumers curtailed their shopping until the earliest Thanksgiving promotions rolled out. Sales fell by 56 percent during that period while shopping cart abandonment climbed to a striking 83 percent, according to data from e-commerce solutions provider SeeWhy, which tracks conversions and abandonment rates.
All indications are that the trend is continuing this year, meaning that merchants must be more proactive as they head into the start of the holidays. The best way to do that is by examining the top reasons for cart abandonment and addressing them now before the season is upon us.
Below are the top five reasons why consumers abandon shopping carts during the online shopping experience, based on responses to a Forrester Research study released in May 2010:
1. Shipping and handling costs (44%)
2. Not ready to purchase the product (41%)
3. Wanted to compare prices on other sites (27%)
4. Item was priced too high (25%)
5. Wanted to save products in my cart for later consideration (24%)
Notice that none of the top five reasons have anything to do with site design or checkout functionality, and that several or all of these issues can be dealt with relatively simply. If you are not able to address them all before this holiday season, tackle the ones you can and make sure to consider the rest for 2011.
Here are some ways to address these issues:
• Offer free (or reduced) shipping. Simple, right? Only you know your company’s bottom line, but the numbers don’t lie – shipping fees are extremely important to consumers. “People are generally suspicious of high shipping costs, and merchants should really try to do everything they can to get those costs down as low as they can,” says Charles Nicholls, founder and CSO of SeeWhy.
If free shipping across the board is impossible, one strategy that works well is to offer conditional deals for lower shipping costs. Offer free or reduced shipping on purchases over a certain dollar amount, and let shoppers know when they are nearing that threshold to give them more incentive to make that final purchase.
• “Email me that”. The Forrester study tells us that four out of ten shoppers abandon their carts because they are simply not ready to make the purchase. So, help them get ready for the next time. Give them the option to get more information about a product sent to their email addresses or through other channels. While you’re at it, allow them to sign them up for your newsletter or qualify for a special promotion. Abandoned shopping carts do not have to result in lost customers if you can identify those shoppers and continue to market your products to them – especially when they are products in which they have already shown an interest.
• Use the data. More than half of the Forrester respondents are abandoning their carts either to check prices from other merchants or because they have already determined your price is too high. Analyze this information and try to do something with it. Like the previous suggestion, this will involve retargeting visitors that have left your site. Try to find out what kept them from completing their purchase, and take advantage of that information. Conversely, when customers tell you what products in your inventory are the hottest by buying them off the virtual shelves, the information you can learn from abandoned shopping carts can be every bit as valuable down the road if you collect it and use it creatively.
• Offer guest checkout. It did not make the Forrester top five (it was actually No. 7 with a 14% response), but many carts are abandoned because shoppers are often unwilling to register on a new site – even if they have found a product they want. Guest checkouts make creating accounts an optional part of the process and can significantly reduce shopping cart abandonment.
• Persistent Shopping Carts. These are carts that save a shopper’s inventory until they come back to visit your site, so they may browse your site without making a purchase but still have the items loaded in their cart when they return. If this is not a functionality that you have in your e-commerce store, it may be something to look into for 2011 because it has been proven to save abandoned sales. If you have this functionality and want to lower your abandonment rates before the holidays, look into the timing of your cart’s “persistence”. Particularly for holiday shoppers, you may want to ensure that someone browsing for items in the next 30 days can still find those items in their cart when they come back to your site on Dec. 21, meaning that you may have to increase the timing mechanism on this functionality for the next couple of months.
Like last year, 2010 holiday consumers are going to be more careful and cautious than in some years, so any reassurance you can provide along the way will result in a lower shopping cart abandonment rate.