Reducing Abandoned Shopping Carts In E-Commerce

In March 2014, the Baymard Institute, a web research company based in the UK, reported that 67.91% of online shopping carts are abandoned. An abandonment means that a customer has visited a website, browsed around, added one or more products to their cart and then left without completing their purchase. A month later in April 2014, Econsultancy stated that global retailers are losing $3 trillion (USD) in sales every year from abandoned carts.



Clearly, reducing the number of abandoned carts would lead to higher store revenue — the goal of every online retailer. The question then becomes how can we, as designers and developers, help convert these “warm leads” into paying customers for our clients?

Before Cart Abandonment

Let’s begin by looking at recognized improvements we can make to an online store to reduce the number of “before cart” abandonments. These improvements focus on changes that aid the customer’s experience prior to reaching the cart and checkout process, and they include the following:

• Show images of products.
  This reinforces what the customer is buying, especially on the cart page.
• Display security logos and compliance information.
  This can allay fears related to credit-card and payment security.
• Display contact details.
  Showing offline contact details (including a phone number and mailing address) in addition to an email address adds credibility to the website.
• Make editing the cart easier.
  Make it as simple as possible for customers to change their order prior to checking out.
• Offer alternative payment methods.
  Let people check out with their preferred method of payment (such as PayPal and American Express, in addition to Visa and MasterCard).
• Offer support.
  Providing a telephone number and/or online chat functionality on the website and, in particular, on the checkout page will give shoppers confidence and ease any concerns they might have.
• Don’t require registration.
  This one resonates with me personally. I often click away from websites that require lengthy registration forms to be filled out. By allowing customers to “just” check out, friction is reduced.
• Offer free shipping.
  While merchants might include shipping costs in the price, “free shipping” is nevertheless an added enticement to buy.
• Be transparent about shipping costs and time.
  Larger than expected shipping costs and unpublished lead times will add unexpected costs and frustration.
• Show testimonials.
  Showcasing reviews from happy customers will alleviate concerns any people might have about your service.
• Offer price guarantees and refunds.
  Offering a price guarantee gives shoppers the confidence that they have found the best deal. Additionally, a clear refund policy will add peace of mind.
• Optimize for mobile.
  Econsultancy reports that sales from mobile devices increased by 63% in 2013. This represents a real business case to move to a “responsive” approach.
• Display product information.
  Customers shouldn’t have to dig around a website to get the information they need. Complex navigation and/or a lack of product information make for a frustrating experience.

Unfortunately, even if you follow all of these recommendations, the reality is that customers will still abandon their carts — whether through frustration, bad design or any other reason they see fit.

After Cart Abandonment

The second approach is to look at things we can do once a cart has been abandoned. One tactic is to email the customer with a personalized message and a link to a pre-populated cart containing the items they had selected. This is known as an “abandoned cart email.”

The concept is pretty simple. At the right time, a customizable email is sent, complete with a personalized message and a link to the customer’s abandoned cart. Of course, this approach assumes that the customer has submitted their email address — effectively, they’ve done everything but paid. Abandoned cart emails represent one last attempt by the merchant to convince the buyer to check out.

In September 2013, Econsultancy outlined how an online cookie retailer recaptured 29% of its abandoned shopping carts via email. This is a huge figure and one we might naturally be skeptical of.

To get a more realistic perspective, I asked my colleagues at Shopify to share some of their data on this, and they kindly agreed. Shopify introduced “abandoned cart recovery” (ACR) in mid-September 2013 (just over a year ago at the time of writing). Here’s a summary of its effectiveness:

• In the 12 months since launching automatic ACR, $12.9 million have been recovered through ACR emails in Shopify.
• 4,085,592 emails were sent during this period, of which 147,021 carts were completed as a result. This represents a 3.6% recovery rate.
• Shop owners may choose to send an email 6 or 24 hours after abandonment. Between the two, 6-hour emails convert much better: a 4.1% recovery rate for 6 hours versus 3% for 24 hours.

It’s worth noting that the 3.6% recovery rate is from Shopify’s ACR emails. Many merchants use third-party apps instead of Shopify’s native feature. Given that Shopify is unable to collect data on these services, the number of emails sent and the percentage of recovered carts may well be higher.

Given the statistics, abandoned cart emails are clearly an important part of an online retailer’s marketing strategy. Luckily, most leading e-commerce platforms enable merchants to send custom emails, either in plain text or HTML. Knowing how to implement these notifications is a useful skill if you are designing for e-commerce, and they represent added value to your services.

Conclusion

While there are many tactics to persuade customers to buy, inevitably some people will get to the payment screen and decide not to continue. Any tactic that helps to seal the deal is certainly worth considering, and given the small amount of work involved in implementing an email to recover abandoned carts, it’s a great place to start. Designers and developers are in a powerful position to help their clients increase their revenue, and being armed with tactics such as the ones outlined in this article will hopefully enable them to offer a wider range of services.