Abandoned shopping carts cost the industry dear
The multi-billion cost of abandoned shopping carts to the e-commerce industry is revealed in a new report.
Nine out of ten e-commerce shoppers have at some point left a site without buying after putting goods, according to the Royal Mail’s 2009 Delivery Matters Research. One in three buyers did so frequently last year, resulting in lost sales of £2.7bn. And more than half of those who abandoned their carts said they did so because they were unhappy with the delivery charge.
Clear information about delivery charges would lead 60% of online visitors to continue shopping with an e-commerce, the report showed.
Eight of ten (82%) of online shoppers said free delivery on all items would encourage them to increase their use of a site, while 65% would do so because of good customer service.
Just under a third (31%) said they abandoned a cart because delivery would take too long.
Dan Hewett, head of small business goods fulfillment at Royal Mail, said: “The online marketplace grows ever more competitive and having tempted shoppers to explore their stores, e-tailers simply cannot afford to miss out on sales because of poor website functionality and inadequate delivery information.
““Our research shows that delivery details and options remain a major influence on online shopping habits.”
In response the Royal Mail has launched a free Delivery Promise Tool that retailers can use to analyse their website from a shopper’s view.
Everyone who uses the service, which takes 15 minutes to complete, will receive a detailed report, recommending improvements to each part of the website, from site navigation to delivery options, the buying process and customer information.
Our view: Why is it that so many online retail sites don’t tell shoppers how much the delivery is going to cost till the end of the process? We must all have abandoned purchases, especially those for relatively small items where a relatively enormous delivery cost is revealed at the end. I even heard about one case not so long ago, where an extra delivery charge was revealed after the payment had been taken.
None of this works for customers – who want to their internet bargain to remain a bargain, even when it’s been sent in the post. So the big issue is knowledge, this report shows. Tell a customer how much it’s going to cost up front and cut down on abandoned cart statistics.
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2 Comments »
Unfortunately I struggle a bit with having Royal Mail producing research that suggests that ecommerce teams should offer free shipping! But having said that, it is a bit problem: on average 71% of shopping carts are abandoned without a purchase being made in the same session.
A recent US study by analysts Forrester concluded that the number one reason why consumers abandon their shopping carts is the cost of shipping and handling. This has been the top reason for abandonment for many years, and not much has changed. The top 5 reasons in the Forrester study are all related to either (1) cost in some way, or (2) timing – the customer is not yet ready to buy. I have written a blog reviewing the Forrester research in detail here:
http://seewhy.com/blog/2010/06/03/reasons-why-website-visitors-abandoned-their-shopping-carts/
In ‘Our View,’ you also suggest that not showing the shipping and handling until late in the process is a significant contributor to the overall shopping cart abandonment rate. In the Forrester study, 22% of consumers stated that it was one reason that they had abandoned shopping carts, making it the sixth most significant cause of shopping cart abandonment. Compare this with ‘Shipping and Handling costs were too high’ (at 44%) and ‘I was not ready to purchase’ (41%). In fact the top 5 reasons given all relate to either cost (too high, searching for a better deal etc) or because the customer wasn’t yet ready.
Having said all that, I agree that it is intensely annoying (and you might argue discourteous to the potential purchaser) not to show the shipping and handling costs up front. For some ecommerce sites it can be hard to bring the cost up onto the product detail page: if they are shipping to international destinations, or if their shopping cart is provided by a hosted provider.
With any ecommerce site it’s critical to identify exactly where your customers are falling off – and do something about it. Apply some intelligent logic: if it’s when you show the shipping costs, change how you do it, be more upfront. If customers are not quite ready to purchase, how can you interact more? do they have unanswered questions?
Consider a high street retail store, if 90% of people left without making a purchase the owner would be fixing it – finding a way to improve conversion rate. He would undoubtedly speak to the customers, look at prices/range/customer service/promotions/window display – all these can be applied to an online operation. The key one, and most underutilised (yet is extremely effective for conversion rates) is speaking to customers – so when a customer falls off your site it can trigger a phone call into your contact centre where a helpful agent is directly connected to the customer to discuss the order, offer advice and answer any questions (and maybe an incentive). You’d be surprised how effective this can be. Companies such as LeadCall are doing this for a number of big brands, and not so big, right across the various sectors.
(Clearly the site has to be designed to capture their contact details first, but there are best practice ways to encourage this)
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