Shopping online may be the next step for many retail verticals, but ecommerce carries its own set of challenges that must be addressed. Among them is shopping cart abandonment.
Nothing is more frustrating for an online retailer than when a consumer seemingly selects products to purchase, only to back out at the last possible second. What was a possible sale quickly turns into another missed opportunity.
However, according to a recent Power Retail report, there are transaction management steps that ecommerce retailers can take to ensure sales go through. That way, both sides get what they want out of a possible transaction.
1. Consider shipping costs
One of the advantages that traditional shopping has over ecommerce is the lack of shipping costs. Whenever purchasing goods online, consumers will almost always consider the shipping costs. Whether or not they deem the costs necessary will determine if a sale goes through.
According to the report, low-value carts are abandoned most often because of shipping costs. Not many consumers will purchase an item for $15 if shipping costs an additional $10 - or 68 percent of the price.
"So it's well worth checking the ratio of shipping cost to cart value for some of your lower value abandoned baskets and seeing whether you can adjust shipping policies to try to get the ratio below a maximum of 50 percent for at least some of them," the report stated.
2. Price perception is key
Though the difference between an item costing $99 and $100 is not much, the perception that a three-figure item is more valuable leads to more shopping cart abandonment, Power Retail warned. The difference between $99 and $100 is the most significant for orphaned carts, but there are also considerable jumps at $250, $400 and $500.
Again, shipping may remedy the problem.
"What this suggests, of course, is that these are great break points at which you might offer minimum order free shipping," the report said.
When shipping costs don't push consumers' carts over this threshold, the likelihood of a purchase going through increases.
3. Certain products stand alone
It occurs naturally, but certain items tend to have a high rate of abandoned carts, the report said. The report gave the example of two items that both cost $499. One is abandoned 95 percent of the time, while the other is only left 32 percent of the time.
"There are many potential causes of this, of course, and sometime these are completely understandable given the specifics of the item," the report stated.
The cause could be due to the specs of the products, but, the report said, companies should take a deeper look and see if they can figure out why abandoning one product is so much more common than another. When the problem is identified, a retailer will be better equipped to deal with the issue.
Though the problem of abandoned shopping carts is a difficult one to solve, it's imperative for companies given the growing popularity of ecommerce, according to experts.