Insight

Abandonment is far too common, but you can reduce it

Brick and mortar shoppers rarely abandon their shopping carts. On-line, this occurs frequently. High shipping costs are the single biggest reason for abandoning a shopping cart on-line, mentioned by 44% of shoppers. Another 28% complain that the site did not mention shipping costs or had slow shipping (Khalid, 2012).

Our clients have significantly reduced abandonment and increased checkout rates by using several techniques:

  • Be honest about shipping. Capture ZIP code early and compute shipping costs as soon as possible.
  • Offer free shipping. For orders above a certain level, e.g. $75, offer free shipping. Or offer free shipping on all orders during the holiday season.
  • Avoid information overload. Keep the order summary simple.
  • Use scarcity. Remind buyers when inventory levels are low.
  • Allow "guest checkout." Don't require buyers to create an account before checking out. But do let them create an account at the end of the checkout process.
  • Consider a flat rate for shipping if your product, margins and logistics allow for it.

Retailers can lose a sale because of shipping costs. The product may be just right, at a good price, and it's available with 2-day shipping. But if the shipping cost is too high, the sale is lost. If your abandonment rates are above 65%, which is typical in 2012, then take a closer look at your analytics for deeper reasons. Explore shipping alternatives and pass the savings along.

If you experience high abandonment rates due to high shipping costs, perhaps you are paying too much for inventory shipments. Do not believe that UPS always has the lowest rates. Next day delivery does not always have to go by air. Expand your options and make the shippers compete. You will save money, as will your customers, and they'll reward you with their business.

Retailers can also tell if they are overpaying for shipping if they are losing sales. That's why free shipping plays such a big role in on-line retail. If the customer is over-paying then it is likely that the retailer is over-paying, too. Some sellers entice customers with low product prices but try to make up for the low margins with high shipping costs. Ebay listings are famous for this, but beware: customers are turned off by this and will not come back.

UPS and FedEx are most often considered for rapid shipping. Don't forget USPS, which has great service Monday through Saturday, as well as priority mail. Consumers also automatically associate next-day air with urgent shipments, but that is not necessarily true. Ground shipping is often just as fast as air. Both UPS and FedEx promise two-day ground delivery between Chicago and Atlanta. Why fly?

Reference

Khalid (2012). Shopping Cart Abandonment Rate Statistics, http://www.invesp.com/blog/cro/shopping-cart-abandonment-rate-statistics-infographic.html

Fairfield Professionals is a boutique consulting firm specializing in the food safety, consumer products and healthcare industries. Fairfield's services include business intelligence, user experience research and design, product management, project management, process improvement and software selection and implementation.

Business Intelligence

Business data organized, analyzed, and presented strategically helping managers to make intelligent decisions faster.

User Experience Design

Making computer interfaces easy-to-use and fast to learn.  Reducing costs, speeding adoption and increasing conversion rates.

Product Management

Building and marketing technology products that people love supported by market and data driven organization and processes.

Project Management

Initiate, plan, execute, control, and close the work of a team to achieve specific goals within given constraints.

Process Improvement

Reducing costs and preparing for growth by identifying and implementing blue collar and white collar improvements.

Selection & Implementation

Needs analysis through roll-out. ERP, warehouse, order processing, order entry, fulfillment, retail, merchandising.

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