The shopping cart abandonment rate has increased to 75% in the first 6 months of 2011. The rate, which averaged 71% for 2010, measures the proportion of online shopping carts that are started, and then abandoned.
Normal seasonal trends have the rate decreasing in the first half of the year, declining further over the summer months, then spiking in anticipation of holiday promotions being rolled out.
Once the holiday promotions are widely available, the rate declines again as shoppers make their holiday purchases online in volume.
Causes of the increase
- Economic uncertainty
There continues to be considerable economic uncertainty, and while ecommerce is faring better than many sectors, there’s no doubt that many consumers are cautious in their approach and are looking for the ecommerce channel to reduce costs. While convenience still drives many purchases, price sensitivity is increasingly playing a role, leading consumers to research purchases more.
- Increasing customer sophistication
A recent Forrester study concluded that 89% of consumers had abandoned at least one shopping cart. Cart abandoners are more experienced and have been using the internet longer, and spend more online than consumers that don’t abandon. As ecommerce has become a mainstream activity of many consumers, so too has the general level of sophistication, with the consequence that many consumers will routinely comparison shop for the best price. The Forrester study showed that 27% of abandoners had abandoned a shopping cart in order to comparison shop on other sites.
- Mobile devices pushing up the abandonment rate
Ecommerce purchases on mobile devices are forecast to be 3% of the overall online commerce market in 2011; however the abandonment rate on mobile devices is significantly higher than on tablets or PCs. While the overall impact of mobile shopping is currently small, it is becoming a factor that we will see more of going forward. Many mobile users are not buying using their mobiles but are researching for a later purchase on a larger screen. The availability of easier purchasing and payment methods designed specifically for mobile devices should change this longer term, but in the meantime, higher mobile cart abandonment rates are inevitable.
Given these underlying forces, what can marketers do about shopping cart abandonment? The first thing is to understand the causes, from the consumer’s perspective.
Top Causes of Shopping cart Abandonment
The Forrester report concluded that the top five causes of shopping cart abandonment were as follows:
- Shipping and handling costs were too high – 44%
- I was not ready to purchase the product – 41%
- I wanted to compare prices on other sites – 27%
- Product price was higher than I was willing to pay – 25%
- Just wanted to save products in my cart for later consideration – 24%
What’s interesting to note is that all five causes are either a price objection (shipping and handling; comparison shopping; price too high) or timing objection (not ready to buy; saving items in the cart for later). Neither price nor timing is easy to address using traditional conversion rate optimization techniques.
The underlying increase in shopping cart abandonment is not so easy to address either, but the specific causes of shopping cart abandonment give us some guidance as to where to start. So, here are some suggestions that may help to partially address price- and timing-based objections:
- Addressing price-based objections
Shipping and handling costs are the single largest cause of abandonment. So given this, it’s obvious that any shipping cost reductions that you can make will help your conversion rate. Another option to consider, though, would be to offer free shipping if possible; or if not, minimum order free shipping—say on orders over $75. In many cases, there’s an added side effect of an increased average order value.
Minimum order free shipping also works very well with shopping cart recovery programs. Using behavioral rules, you can tailor campaigns based on whether the abandoned cart was above or below the minimum order value to qualify for free shipping.
It’s probably also worth looking at an individual product’s probability of being abandoned and checking the shipping cost in relation to the items cost. Customers inevitably abandon when the shipping price exceeds or approaches the value of the item. This analysis can also identify products that are priced incorrectly or too high.
Finally, pricing objections can be very effectively handled in remarketing emails. Currently, the most popular remarketing offer is a 10% discount, though in some cases up to 30% is offered. [Note: There’s sometimes a concern about using price offers in shopping cart recovery emails, and you can read more about strategies to minimize the risk of training customers to expect abandoned shopping cart offers here].
- Addressing timing-based objections
Timing objections, such as ‘Not yet ready to buy,’ are pretty much impossible to tackle on site. However, you can make it easier for abandoners to come back and buy. For example, check that your cart persistence is set to 60 days or more so that the site will remember the items the abandoner was considering. Equally important, adding an ‘email me this’ button on the product detail page provides the visitor with an easy way of bookmarking pages of interest.
This is, of course, why email remarketing campaigns are so effective. Consumers are increasingly using shopping carts as places to store items for future purchase. So, a well timed sequence of gentle nudges by email not only catches them when the timing is right to buy, but provides a direct link back to their cart, making it easy and frictionless to buy.
Click here to view our recently recorded a webinar on conversion tactics for holiday 2011.