To really understand shopping cart abandonment, imagine making a list of groceries, going to the supermarket, and filling up your shopping cart but instead of proceeding to the cash register – you simply leave your cart in the middle of the aisle and run for the nearest exit.
In the online world, that’s what happens to 7 out of every 10 shoppers. And it’s a massive drain on retailer’s profit margins. The question is, why do consumers abandon their carts when shopping online, and what can retailers do to get their online shoppers through checkout – and ensure repeat customers?
This article will explore the important role that both online shopping experience and last mile delivery plays in that process – and how every online retailer can reduce and even prevent digital cart abandonment.
What are the reasons for shopping cart abandonment?
It’s important to differentiate between cart abandoners who abandon their carts before and after starting the checkout process.
Shopping cart abandonment prior to checkout
Almost 60% of online shoppers in the US claim that they left their cart because they were just browsing and never intended to make a purchase anyway.
Part of this has to do with product availability and product pricing.
Are you offering the products that your target consumers are looking for? Are competitors offering the same or similar products at reduced rates?
Many online retailers today often have to compete with retail giants whose ecommerce sites offer free shipping on all or many products, or offer subscription models which include free shipping. This can affect customers who already know what they want, and are coming to a retailer’s website to compare prices.
Shopping cart abandonment at checkout
The second group, online shoppers who abandon their carts after proceeding to the checkout page, are even more interesting.
This group of digital shoppers seem ready to make a purchase. But then, for some reason, these customers abandon their cart at the very end of the process. Understanding why this happens is one of the keys to reducing cart abandonment and increasing both ecommerce sales and customer stickiness.
Analyzing the reasons for checkout abandonment can directly impact online sales – if the proper remedies are put into place. According to the Baymard Institute, the top 5 reasons for cart abandonment during the checkout process are:
- High shipping costs, taxes and fees (48%)
- Not willing to open a user account for an online store (24%)
- Delivery options are not compatible with customer needs (22%)
- Lack of trust in online stores to give them credit card details (18%)
- Checkout options and processes are too complicated (17%)
Most of these checkout failures can be prevented by clear pricing information, streamlining the checkout process and providing multiple delivery and payment options.
It’s interesting to note that both the #1, #3 and #6 reasons for cart abandonment, representing 86% of the responses, involve shipping and delivery.
What does last mile delivery have to do with cart abandonment?
While cart abandonment happens at the very beginning of the shopping experience, most people think of last mile delivery as something that completes the transaction – two separate bookends.
If a shopper abandons their digital cart, then there is no order and no need for delivery. In that case, how can last mile delivery possibly influence an event that precedes it?
Despite this paradox, there are three important ways that delivery can affect cart abandonment:
Consumers abandon their online shopping carts when…
- The delivery option they want is not available
- Delivery options are not visible, or
- The delivery costs are too high
Shoppers want to know, have you got delivery available when I want it? And is it at a price that I’m willing to pay?
If the answer isn’t ‘yes’ to all of these, it’s a problem. And if you have these services, but shoppers have no visibility into the options or the price of the service prior to checkout, it may provide an unpleasant surprise that will turn them away.
To take the statistics above, 16% of shopping cart abandonment happened because online shoppers couldn’t figure out the final order cost prior to checkout. This happens because the average ecommerce platform or website doesn’t ask for a preferred method of delivery until the checkout process – and delivery options have a direct impact on the final order cost.
Shopping cart abandonment solutions
Now that we have an understanding regarding the underlying reasons for cart abandonment, especially as it relates to shipping and last mile delivery, here are a number of practical tips that can reduce the shopping cart abandonment rate for your eCommerce store.
7 ways to prevent online shopping cart abandonment
- No hidden costs or surprises for shoppers at checkout
- End-to-end visibility for customers
- Reduce shipping costs
- Provide more fulfillment options
- Use data to personalize the experience
- Special offers
- Implement and highlight sustainable delivery
1. No surprises
Online consumers want to be in control and don’t like surprises -especially when trying to find the best possible prices.
According to a DigitalCommerce 360 survey, 25% of shippers were frustrated with unclear shipping costs. Other common yet nasty surprises include unexpectedly long delivery times, taxes and other fees that only appear towards the end of the transaction.
Negative surprises right when consumers are ready to check out fosters distrust in particular online stores – to the point of hoppers refusing to share their credit card details.
It is advisable to put all pricing information up-front and gain consumer confidence at the beginning of the customer journey – rather than misleading potential customers with low prices that grow significantly during the checkout process.
2. Key parameter: visibility
Consumers want to know what is happening with their orders from start to finish. This includes when the order is out for delivery, whether from a warehouse or local store.
This information must be easy for consumers to access wherever they are shopping, on whatever device they shop from.
Giving online customers end-to-end visibility into delivery timeframes not only reduces digital shopping cart abandonment but also enhances overall customer satisfaction, improves brand loyalty and increases customer retention. Loyal customers are more likely to overcome technical obstacles and complete transactions rather than abandon their shopping carts.
On the backend, ecommerce retailers need to integrate inventory systems that provide real-time updates regarding shipping timeframes and delivery windows.
The most efficient solution for this user experience is a single delivery management system that provides both a front-end interface for consumers along with backend interfaces for easy integration with existing retail IT systems.
3. Delivery cost reduction
During these uncertain times with rising prices and supply chain disruption, it’s challenging to get on time delivery at all, regardless of how much it costs.
Online consumers on the other hand are looking for the lowest prices and have come to expect a free delivery option. For retailers, this means either adding a modest delivery fee that won’t scare away consumers or absorbing delivery costs and squeezing their already shrinking bottom line.
Either way, delivery costs must be cut by introducing automated technologies that increase efficiency, reduce costs and provide end-to-end visibility for all stakeholders.
These include working with a delivery network of multiple fleets, and automatically routing deliveries to the best possible fleet or driver based on the cost to deliver. The DMP (delivery management platform) must integrate with the retailer’s delivery providers, in order to provide visibility into the cost per delivery.
For more tips, check out this article on reducing last mile delivery costs.
Visibility and cost reduction – a powerful combination
When retailers have visibility into inventory, delivery provider costs, and the customer’s location information, they can show prices for specific items to online customers during the shopping process.
This is a key differentiator and competitive advantage for any online business. Adjusting pricing based on shipping during the online shopping process can make products appear cheaper, and prevent shoppers from dropping off ecommerce stores before the checkout process.
Put customers in control of their order fulfillment.
Today’s online consumers demand full control over what they want, when they want it and how it is delivered. The key is choice, which for some shoppers takes the form of convenient, expedited shipping and delivery, even if at cost; for others, it’s slower free shipping.
You have to move away from ‘it’ll arrive tomorrow’ to ‘it’ll arrive tomorrow between 2-4”. Get more granular in the level of choice you give to your customers.
Also, how are you charging people for those options? Is it worth it to somebody to add on a $10 delivery fee to get it today, or do you want to give them the option for slower, cheaper shipping? Since order size is tied in as well, do you suggest that they can reduce the delivery fee by increasing the order size?
Ideally, delivery options should include free delivery (even if slower) as well as premium same and next-day delivery. But keep in mind that offering same day delivery is irrelevant if you don’t have goods located nearby.
You need to understand your inventory availability on a daily basis, and understand how to manage that. Start by supporting shipping from local stores, dark stores and micro fulfillment centers (MFCs). In fact, we see customers moving to dark stores for delivery, because it’s easier to control the inventory than the inventory in a traditional store.
Increasingly, retailers have customer-facing traditional brick-and-mortar stores, while using dark stores to fulfill their online orders and inject more delivery options and ‘choice’ into their ecommerce offering.
Customers are often hunting for the unique selling proposition on a retailer’s site, and it may well end up being a specific delivery option that tempts them to keep shopping.
It’s important to show the user which choices they have – which delivery options are available – early in the online shopping process, instead of waiting until they reach the checkout page. Put them in control of their order fulfillment.
Existing customers are less expensive to retain, because once you start gathering data on their orders, you can start with customized suggestions, becoming proactive in the engagement.
If you know they always order same-day, you can present this as a pre-filled suggestion. If they left feedback previously that the order came early, you can flag the order with a note to the driver not to arrive early.
Retailers have customer data, but too often they don’t know how to understand or utilize it in order to prevent cart abandonment.
It’s all about leveraging that data, personalizing the response. When you look at the cart, how personalized an experience can you make it? That’s the question you should be asking.
6. Special offers
There is always one last chance to catch potential customers just as they are in the act of abandoning their cart, or directly after. This might include pop-up screens offering them discounts, free next-day delivery or extended returns policies to complete the shopping cart transaction and build customer loyalty at the same time.
If they are registered users, then a chain of emails can be put into motion reminding the customer about the products they abandoned, offering to complete the transaction. If that doesn’t work – offers of free shipping, an extended return policy or special discounts can also be offered to close the deal.
If the potential customer is not registered, then cookies can be used to identify a returning user, remind them about the abandoned cart and offer guest checkout options to complete the transaction.
While it’s good to have a strategy for trying to salvage lost online customers and regain eCommerce revenues, it’s even more important to take the right measures for reducing shopping cart abandonment and preventing it wherever possible.
6. Green delivery options
Consumers today (especially young consumers) often look for green options like bag-less deliveries, or ordering with companies that reduce carbon emissions through low or zero-carbon delivery methods.
For these shoppers, green delivery features can be a key differentiator if clearly presented in the checkout process. It can even be a ‘buy in’ option which customers click on, giving them an active role in making their delivery greener.
Keep in mind that while this is a great differentiator, it only works if the rest of the delivery promises are met.
Harnessing technology to prevent cases of cart abandonment
Reducing that number is the quickest way for retailers to see greater returns from their ecommerce business. But in order to do so, they must be proactive in understanding why their specific shoppers are abandoning carts and following up with actionable solutions to prevent cart abandonment in the future.
Think about the shopping experience, and any offers made to the customer, as a promise. And when it’s a personalized promise, and the person feels you are engaging with them and their needs, it’s that much more powerful a tool for keeping customers happy, and ready to shop with you again.
Shipping and delivery play an important role in the promises that retailers make to customers, and in the choices (the delivery options) they offer them. Improving delivery from an operational and customer-facing perspective can sway shoppers to take their shopping carts through checkout instead of abandoning them.
Providing this level of last mile customization and personalization during online browsing requires a delivery management platform that can automatically identify available delivery options and present the options based on delivery time, or the cost to deliver. It necessitates both backend integration with inventory and eCommerce systems, as well as connections to third party delivery fleets and carriers, and independent crowdsourced delivery drivers.
When retailers apply last mile technology to enable the choices their shoppers want, that’s what will create a competitive level of personalization, visibility, and cost reduction that improves the customer experience and successfully reduces cart abandonment.