The theory goes that if you make it easy for visitors to follow a simple path to conversion, you’ll generate traffic and revenue.
And yes, this is correct.
But this “single track” view of conversion is overly simplistic.
In this column, let’s explore why, and how it’s important to consider all of your available conversion paths.
Why Customers Don’t Buy
Only 3 percent of visitors buy within one session on an e-commerce site. And once they get as far as the shopping cart, 71 percent will abandon. To understand why, Forrester Research asked 3,000 people why they abandon.
Source: Forrester Research, May 2010; “Understanding Shopping Cart Abandonment” Note: Respondents were able to give multiple answers
As it has been for years, the cost of shipping is still the number one reason why people abandon their online shopping carts. What’s interesting to note is that none of the top reasons have anything to do with the actual checkout process. They’re all behavioral and related to lack of readiness or willingness to pay the final purchase price.
So, making the checkout process easier for the first-time buyer is only part of the answer when addressing cart abandonment. In fact, many have learned that once changes are made, abandonment rates are still high.
Multiple Paths to Conversion
Visitors will make multiple visits to your site before finishing a sale. And on their journey, there are many different purchase paths they may follow.
After analyzing the online buying behavior of over 600,000 consumers across numerous e-commerce sites, I learned that surprisingly 75 percent of shopping cart abandoners would actually return to the site they abandoned within a 28-day period. This defies conventional wisdom: we polled online marketers and 81 percent believed that the majority of abandoners never return.
Additionally, these returning visitors are more likely to finish their purchase, as well as make future purchases. (…)
In 2006, a Wharton professor first noticed that online buyers were more likely to respond to a free shipping offer that resulted in a savings of $6.99 over an outright savings offer of $10. The explanation was that it made the online price more comparable with the offline equivalent.
This fascinating insight into buyer motivations has contributed to on a major new piece of research into online buyer behaviour, which I’ve been working on over the last few months. It will be published on December 13th as an ebook titled ‘The Science of Shopping Cart Abandonment.’
To mark Black Friday, I’ve drawn from some of this research to look at the effects of holiday promotions, and how different price points impact buyer behavior. In particular, I’ll look at the relationship between the cart value and the shopping cart abandonment rate.
What are key price points that trigger abandonment? And can different pricing tactics lead to more conversions without eroding margin? I began my research analyzing a random sample of 264,631 abandoned shopping carts in August 2011, from a cross section of B2C e-commerce sites.
What we already know is that the value of the shopping cart has a disproportionate impact on whether an e-commerce purchaser will buy or abandon. What we have discovered is that it’s not a linear relationship and too simplistic to assume this as a general rule. This leads us to conclude that there are three promotional tactics that merchants should test this holiday season to improve conversions:
Offer discounted shipping for low cost shopping carts.
Set a $99 minimum order for free shipping.
Consider specific promotions for individual products with varying abandonment rates.
1. Offer discounted shipping for low cost shopping carts. As might be expected, higher value shopping carts are abandoned more frequently, and as a broad rule, this holds true. (…)
It’s official: Free shipping is the shoppers’ top retail promotion of choice, driving the majority of customers to buy and to spend more than with any other promotion. This holiday season, customers will be even more price-sensitive, looking not only for the best prices, but free shipping and returns as well.
As we have written about before, customers have become trained to wait for holiday offers prior to making purchases. A tighter economy suggests that this holiday season should see good growth for ecommerce sites as consumers look online for the best prices. However, there is evidence that the 2012 consumer is also moving online to save money across a spectrum of goods, including luxury items.
New research by the e-tailing group shows that 73% of consumers rate unconditional free shipping as a
critical feature when making an online purchase.
The October 2011 study, “The Connected Consumer,” also shows that free returns are a critical feature for 70% of consumers, followed by discounts, coupons and rebates.
We shouldn’t be surprised that free shipping is so important. After all, the number one reason why consumers say they abandon shopping carts is the cost of shipping and handling.
Many customers don’t understand why they should pay shipping charges at all. They don’t see the hidden costs for distribution built into the product in-store, and they consider an online purchase to be an alternative to going to the mall when they can afford to wait for delivery. The inconvenience of waiting is offset against the inconvenience of driving to the mall.
The e-tailing group’s research also shows that price is the most critical factor when considering a purchase, whether online or in-store (79%). The convenience of having a home delivery is number two (63%), but this is offset by impatience to get the product quickly (55%) or the ability to purchase from a local store (45%). (…)
For many website visitors, the Online checkout user experience is far from intuitive. I just came across this great viral video from the Google Analytics marketing team on the online buying process. Taking the simple idea of what it would be like to have to go through an online shopping process in a physical store, there are many painful home truths exposed here in an amusing way.
The video follows a man trying to buy a loaf of bread in a British supermarket, but being forced to go through an online checkout process. What fun – it should resonate well with all ecommerce teams and user experience experts alike. It’ll also make you chuckle and cringe as well. What’s amazing is that it takes him so long before he abandons his shopping cart.
Enjoy!
“Not doing usability testing? Are you nuts?” said web usability expert Steve Krug at the Conversion Conference in New York last week. According to Krug, “All sites have serious usability problems. Tuning a website without fixing the problems is like painting over potholes.”
Krug is arguably the man who put website usability testing on the map with his seminal book ‘Don’t Make Me Think.’ If you haven’t read it, this is the one book on website design that everyone that has anything to do with websites should read.
Krug is an incredibly likable character. He has a self-depreciating style and dry humor that makes him an engaging and entertaining speaker. As a usability consultant for 20 years, he is naturally an advocate for testing. “My solution for everything is usability testing. Admittedly, I’m a guy with a hammer…” he says, but he is the first to acknowledge that website usability testing is not hard. His mission is to teach the skills to all ecommerce teams, because usability testing should be a continuous process, and “Who can afford to hire a usability consultant all the time?” he asks.
Usability Testing Defined
Krug defines a usability test as “watching people try to use what you create, while thinking out loud. You’re really trying to get the person to verbalize what’s going through their head.”
He’s at pains to point out that usability testing is not a focus group. Focus groups solicit opinions. Usability is about watching people try to do things. The insights come thick and fast in a usability test, when visitors struggle to complete the simplest and seemingly obvious (to the designer) website tasks.
The advantages of usability testing are that you can make a real difference in the way that visitors are able to interact with your website:
Moves you away from designing by personal biases
Creates a shared experience for the team, which helps build consensus
Gives you an ‘ah ha’ moment when the designers realize that their users are ‘not like us’
A/B tests give you different insights from usability tests, because A/B tests are quantifying differences. (…)
The theory goes that if you make it easy for visitors to follow a simple path to conversion, you’ll generate traffic and revenue.
Visitors will make multiple visits to your site before finishing a sale. And on their journey, there are many different purchase paths they may follow.
