NEW YORK (MainStreet) – Most online shoppers have been there: You find a product you like online, you add it to the shopping cart and proceed to checkout… and then, at the last minute, you have second thoughts and close the window, telling yourself you’ll sleep on it and come back later.
It’s the online equivalent of abandoning your shopping cart in the middle of a grocery store, and indeed, e-commerce professionals refer to it as “shopping cart abandonment.” And it’s no small problem for online retailers: In an environment where backing out of a purchase is a simple matter of clicking “X” on a browser window instead of clicking “Buy,” approximately 72% of online shoppers abandon their shopping carts before consummating a purchase. And shopping cart abandonment looks to be on the rise as people get savvier about comparison shopping before making a purchase.
“This is the number-one area that e-commerce sites are focused on right now,” says Ken Wisnefski of e-commerce marketing firm WebiMax. “When you’re looking at online retail you look at two key components: There’s just getting the user base to the site and involved, but then the big key component is conversion into sales.”
With so much money at stake in solving this problem, you better believe that online retailers are pulling out all the stops to figure out how to make shoppers follow through and make a purchase. Here are some of the tactics they use.
If you want people to buy stuff on your website, you need to make buying as easy as possible. It may seem obvious, but one of the best ways to do this is to make sure you have a giant button that says “buy.”
“It’s all about making calls to action very easy, with big, bright buttons,” says Alex Schmelkin of Alexander Interactive, a web marketing firm that specializes in designing e-commerce websites. “Some of the more stylized e-commerce sites try to stay away from the big, red ‘buy’ button, but research shows it works.”
Research also shows that the design, placement and even wording of those buttons is critical. In a recent study conducted by research firms Forrester and Channel Intelligence, buttons where the first word was “Buy” (for instance, “Buy it now”) had conversion rates 53% higher than buttons where “buy” was later in the phrase or non-existent (for instance, “where to buy.”) The same report also found that the buy button was most effective when it was “above the fold” (that is, toward the top of the page) and placed close to the product image.
Just as you shouldn’t have to search for the register at a bricks-and-mortar store, you shouldn’t have to strain to find the button that lets you buy.
Of course, clicking the “buy” button is just the beginning. From there you’re taken to a checkout page, and that’s where many e-commerce sites get into trouble.
If you’ve ever abandoned your shopping cart at a bricks-and-mortar store, there’s a decent chance that it’s because you were confronted with a long line and just didn’t feel like waiting to make your purchase. The same principle applies in online retail: The more difficult it is to execute a purchase, the more likely it is that the customer will grow frustrated and abandon the process.
“Don’t ask me a thousand questions,” says Mark Ryski of the HeadCount Corporation, a retail analytics firm. “Don’t get in the way of taking my money.”
Simplicity is the name of the game here, a message that more online retailers seem to be getting. It’s why Amazon introduced a one-click shopping functionality to their website: Not only does it encourage impulse buying, but it also cuts down on people getting to step four of the checkout process and then becoming distracted and walking away from the transaction.
And it’s also why many retail websites offer guest checkout – that is, the ability to check out and make a purchase without first creating an account. In the now-famous article “The $300 million button,” author Jared Spool described how a major e-commerce site was losing $300 million a year in sales because of its decision to make users log into the website before making a purchase. Spool describes how users, unsure of whether they actually had an account with the site, would try various email-and-password combinations, click the “forgot password” link and in many cases wind up creating a new account on the site (45% of all users had multiple registrations in the system as a result of repeatedly forgetting their login information). Needless to say, this extra layer of frustration was driving off would-be users, and experts echo the contention that compulsory registration drives off shoppers.
“I’ll be in the midst of doing something, and I’ve got to enter in all that contact info,” says Wisnefski. “That’s one of the reasons I abandon the cart sometimes.”
Internet users already have more passwords than they can possibly manage. Asking them to create an account (or remember login information for a website they use sporadically) is yet another roadblock that smart online retailers are moving beyond.
Knocking down the roadblocks to purchasing is about more than just doing away with registration requirements and implementing one-click shopping. It’s also about designing websites that are easy to use and make helpful information readily available.
One personal touch incorporated by many e-commerce sites is the option to open a live chat box in the middle of the checkout process to address any questions you might have about the process or the product you’re about to buy.
“The live chat option is becoming a lot more prevalent in shopping carts,” says Wisnefski. “Do you have questions about shipping or when the package will arrive? The more people you can have in the process from a resource perspective, there’s a huge uptick [in sales].”
Schmelkin, of Alexander Interactive, adds that e-commerce sites should consider little things like the phrasing of error messages, which have the potential to scare off customers.
“The moment you press submit and an error message pops up, you might get scared and leave,” he explains. “How it’s phrased is important – you want to have the appropriate tone and not be too technical. Instead of something like ‘field 3 is required,’ write ‘please double check your ZIP code’.”
Finally, as people increasingly shop on smartphones and tablets, online retailers are realizing that there is aneed to optimize the shopping and checkout experience for such devices. While consumers still are more inclined to use tablets and phones for research rather than actual purchases, online retailers still want to avoid losing out on those sales.
“[On smartphones] you have to come up with a scaled-back interface and bigger buttons so it’s easier to understand,” says Schmelkin. “And native concepts on tablets are key: On a desktop you use the ‘next’ button to see pages, but on a tablet people just expect to be able to swipe across.”
User-friendly design choices can only take you so far. At the end of the day, money is the most important factor in securing a purchase.
In particular, we’re talking about unexpected charges. Getting to the final page of the checkout process and realizing that your $30 slow cooker is actually going to cost $35 when shipping costs are included is exactly the kind of event that’s likely to cause shoppers to storm out in a huff. Indeed, another Forrester study identified shipping charges as the top reason for shopping cart abandonment.
“People get to the final stage of the process where they’re ready to hit submit, they see there’s shipping costs and they’re pulling back out to see other prices,” says Wisnefski. “That’s why you’re seeing more places that give incentives like free shipping.”
More retailers than ever are offering free shipping and in some cases lowering or doing away with the minimum purchase thresholds that have traditionally been required to get an item shipped for free. And many apparel retailers have taken things a step further by offering free return shipping as well if an item doesn’t fit, making the transaction a truly risk-free proposition for any shopper who’s having second thoughts about the purchase.
Another important price consideration for online retailers is transparency. In addition to being upfront about the cost of shipping, Forrester research also suggests that retailers should be careful not to overinflate the bargain they’re offering by showing only the manufacturer’s suggested retail price (MSRP) as a price comparison.
“It is clear from the [Channel Intelligence] data that manufacturers that share more pricing information enjoy higher conversion rates,” wrote Forrester in its recent report, noting that e-commerce sites that display actual retail prices in addition to MSRP were better at getting shoppers to buy.
Online shoppers will inevitably shop around to see what other prices are out there, so if all a retailer lists is its price and the MSRP and don’t acknowledge that other retailers may be selling a product for less, shoppers are going to call them on it and take their business elsewhere.
Even a retailer that does everything right will end up with some abandoned shopping carts. What it does next determines whether the carts stay that way.
Wisnefski says that while online retailers generally used to clear out your shopping cart when you abandoned it, they’ve now significantly expanded how long they’ll keep your items waiting for you. And if you have an account with the website and were logged in at the time, many retailers will send follow-up emails to remind you of your abandoned goods. While we’ve received such emails from retailers like Newegg and Walmart, it’s an option that far too few retailers take advantage of: A 2009 study by email marketing firm Listrak found that only around 10% of online retailers sent abandoned cart messages to testers who did not complete a purchase they had started.
But retailers have other tricks up their sleeves as well. Most websites use third-party tracking software that plants cookies and tracks users’ browsing habits, all with the goal of providing more targeted advertisements. But on many e-commerce websites such tracking software serves a more specific purpose: “retargeting,” which allows an online retailer to record the fact that you spent time on its website and then follow you around the Web with ads encouraging you to come back. In some cases you’ll even see ads that include the specific products you viewed while browsing the website, with the ultimate goal of getting you to return and follow through with your purchase.
No retailer likes to see you walk out the door without buying anything. But while nobody from a physical store will chase you into the parking lot to try and entice you to get back in the checkout line, in the online world they have plenty of ways to get you to come back and pick up where you left off.
Matt Brownell is a staff reporter for MainStreet. You can reach him by email at email@example.com, or follow him on Twitter @Brownellorama.