It’s an increasingly unhappy plight for online retailers — shopping cart abandonment.
An estimated $4 trillion in annual abandoned merchandise results in an $18 billion loss for retailers each year. But perhaps the most staggering stat is that 68% of all consumers abandon their online shopping cart. And e-commerce retailers don’t have as many options to recoup the loss compared to brick ‘n mortar stores.
So, e-commerce storefronts are fighting back in the most up-front way they can – reminding us that we once wanted to buy that thing!
About 25% of online retailers currently send at least one shopping cart abandonment email to remind us. The trend is sliding upward, to several emails and within a short timeframe. (They won’t let us forget!) And marketers are now spending extra attention catering to this channel since mobile shoppers now account for 40% of global e-commerce transactions (and this is expected to increase to 70% by 2017). But, on the other side of that coin, industry studies show that mobile users are responsible for gobbling up as much as 97% of the shopping cart abandonment pie.
Intrigued? You’ll want to review the Euro IT Group’s full infographic here.
Sending a notification via the company’s mobile app is a strategy e-commerce retailers are using to confront the problem. But industry studies show that only about 27% these shopping apps are used regularly. (We may have downloaded the app but we don’t use it often!) Plus, when we come back to the bottom line again, industry studies have also found that shopping cart abandoners will spend 55% more when they are successfully remarketed to.
It’s an odd tug-of-war to be sure but what’s a good online retailer to do?
Leverage every possible way to engage with the customer! About 75% of retailers wait until the third contact, frequently by email, to offer an incentive to the customer for completing the sale. Yet, when we look at the major reasons cited for shopping cart abandonment — shipping costs — we can see there might be an answer to the problem that most online retailers aren’t exploring yet.
But here again, it’s more complicated than it first appears. The ideal option, sending an SMS notifications has it’s pluses — an estimated 90% of text messages are read within 3 minutes of receipt — as well as it’s minuses — about 60% of users turn app notifications off. (We don’t want to get ‘em!)
Why are consumers investigating a purchase up until the final button click but not finishing the checkout process? The reasons are rather eye-opening:
- 46.1% of cart abandonments occur at the payment stage
- 37.4% occur at checkout login
- 35.7% occur once shipping costs are revealed
- 20.9% occur when the user needs to enter their billing address
- 20% occur when the user needs to enter their shipping or delivery address
Digging a bit deeper, we see that consumers assign four of the top five reasons to the hassle of entering information on a PC or into a mobile device. Only one reason relates to price, the shipping costs.
This indicates that online retailers need to address what challenges consumers most — the checkout process. Potential buyers rebel at long or complicated checkout forms that may include entering a shipping address here and different (or even the same) information as a billing address there. This annoyance is responsible for about 39% of U.S. shopping cart abandonments, industry studies show. Online retailer Amazon has streamlined the process through it’s popular “1 Click Ordering”. The company knows it has a winner and is promoting it via a heavy rotation of TV ads that features two religious leaders unknowingly buying the other the same gift, all so 1-click quick and easy via the Amazon mobile app.
Here’s some other shopping cart abandonment key facts:
- 90% of a consumer’s buying fever fades after one hour
- A $100 “psychological barrier” prompts many consumers to abandon their carts
- Most consumers abandon their purchase on a Thursday
- 2/3 of shoppers said they would buy more online if returns were free