Combating Shopping Cart Abandonment
Information and intelligence gathered from a retailer's e-commerce site can provide valuable insights into emerging shopping trends and help improve future e-commerce performance. Online sales, catalog, and interactive TV orders soared during the 2012 holiday season. Deloitte Consulting predicted that these types of sales will rise 15 percent to 17 percent, mostly due to online shopping, which they believe should account for three-quarters of all nonstore purchases.In 2011, online retail boasted a 15 percent to 16 percent rise in sales. and 2012 was predicted to be the fourth consecutive year in which online holiday sales would increase in the mid- to high teens.
Forbes Magazine reported that in 2011, 72 percent of all potential e-commerce purchases were abandoned. In fact, the shopping cart abandonment rate hit an all-time daily high of 82.9 percent on November 23, the day before Thanksgiving and the pending Black Friday and Cyber Monday onslaught. In 2012, industry sources were predicting that the abandonment rate woul reach 90 percent
With so much at stake, understanding customer buying behavior is critical. This is especially important during the peak buying season, as it helps merchants identify trends that can be applied throughout the year to help boost profits and reduce online shopping cart abandonment. By having the ability to analyze data acquired online during the industry's busiest time of year, retailers are able to pinpoint not only the areas that need improvement but also those that succeeded.
Why carts are abandoned
Can you remember the last time you saw someone fill up a shopping cart in a supermarket or mass merchandiser and then leave without making a purchase? It doesn't happen often, largely because there are no surprises awaiting the customer at checkout, such as exorbitant shipping costs or a price that was higher than anticipated. In-store shoppers face no lengthy registration process at checkout and they have the benefit of being able to interact with both the product and sales support as needed, which is often the most necessary component when it comes to making a purchase.
On the contrary, these are all issues consumers face almost every time they visit a retailer's Web site and are something of which consumers are weary. So while retailers look to capture market share by offering a multitude of new products and a variety of ongoing promotions, the reality is that consumers who plan to make an unusual amount of purchases in a very short period online will abandon their shopping carts with increasing frequency. This is partially because they are not ready to buy and partially because they want to ensure they get the best deals. It's no wonder online retailers face such enormous pressure to provide an optimal online shopping experience for customers.
Combating abandonment
Despite many improvements in recent years, e-commerce sites still face increasing abandonment rates. This is due to the rising sophistication of online customers and their increasing propensity to buy only when there is a perceived sale or when free shipping is offered.
Retailers can help decrease online shopping cart abandonment by addressing issues and applying improvements to certain product pages and by clearly defining information to consumers including:
Rich product descriptions that accurately describe product attributes and options.
Sizing and measurements in a manner that helps the customers understand the context—apparel can have sizing charts; appliances can show graphical representations of size, or fit within various environments.
Multiple product images that detail the various angles, or even use of the product.
Easy product comparisons based on in-depth specification information, not just side-by-side listings of free text copy.
Rich, descriptive text that includes feature and benefit statements, etc. that are designed to help sell/convince/persuade.
Consistent product details that provide the same level of information regardless of where a person chooses to shop.
Customer reviews based on shared ratings, comments, questions, answers, and stories about products and brands.
Warranty, service, installation, and product guide information, which can include digital assets.
Return policy information.
Shipping options early on in the sales process to let consumers know if the shipping policy is "no strings, coupon-based, only available on select goods, etc. The proliferation of free shipping offers can be a real boon to a retailer's e-commerce strategy. In fact, a comScore study found that 36 percent of consumers will not buy from a site unless free shipping is offered.
Availability based on optimized inventory levels.
Studies have shown that anything that surprises a consumer during an online shopping experience is likely to hinder the purchase. By including all relevant information on the individual product page, the retailer can reduce the chance of surprise for the consumer during the checkout process. Retailers are turning to software and implementing Master Data Management (MDM) or Product Information Management (PIM) solutions to make sure the right information is included in order to decrease shopping cart abandonment.
Giving data direction
How retailers handle data is now a strategic issue. This is especially true in today's multichannel environment, where methods and approaches learned from e-commerce data are influencing business decisions across the enterprise. This movement is the main reason choosing the right MDM solution is imperative and choosing the wrong solution could be a costly mistake.
Having greater control over product information and other master data paves the way for multichannel success. With an MDM solution in place, centralized product and customer data is used to feed consistent and accurate information to a variety of destinations including Web sites, print catalogs, and enterprise resource planning (ERP) systems. Cross-sell, upsell, and add-on links can also be created and can be something as simple as offering batteries or another appropriate accessory. A retailer can also create groupings of complementary products to increase the order value.
A multichannel mindset
Beyond delivering all the correct product information to the right places, the other half of the multichannel and e-commerce equation is the customer. Customers receiving redundant messages and irrelevant communications are on their way to becoming ex-customers, leaving companies to deal with the repercussions of increased dissatisfaction, lost cross-sell opportunities, and high-cost/low-return retailing efforts.
Companies approaching e-commerce with a multichannel mindset understand their customers' needs and preferences and how best to communicate with them. Each time a retailer engages with a customer, regardless of channel, new information can be gathered on product, payment, brand, and preferences. However, to be useful, this information must be centralized so that retailers can deliver a more personalized shopping experience. This can best be achieved by creating a consistent view of the customer across all of a retailer's various channels.
A truly unified experience
More than ever, the ability to react and execute faster is absolutely critical. That's why merchants that can pivot faster stand to come out on top. By gathering product, supplier, and customer data, retailers can move toward a unified, multichannel retail experience, thus decreasing shopping cart abandonment and improving margins. By implementing a strong PIM and MDM solution, a single, trusted source of information is created for the entire organization.
Executive teams can deliver real-time, consistent, and highly accurate operational information about products, suppliers, and customers. In doing so, online and multichannel retailers can use their operational information as a strategic asset and improve e-commerce performance.
Mikael Lyngsø is CEO of Stibo Systems, a worldwide market leader in strategic information management technology and solutions. For more information, visit www.stibosystems.com.