Strategy Centre

Reasons Why Customers Abandon Their Baskets

 
  
24 June 2015 12:13
  

Shopping Cart Abandonment

It is true to say that basket abandonment is never completely unavoidable for retailers, as no business will ever achieve a 100% conversion rate.

Despite this understanding, basket abandonment is still a challenging issue that retailers need to address as, according to the IMRG Capgemini e-Retail Sales Index figures, it is estimated that abandoned basket transactions equate to £2.3bn of lost revenue.

Although you might expect that things should have improved as people got used to shopping online, the situation has actually worsened as customers have become choosier regarding their purchasing behaviour.

In fact, as online sales increase, an Experian survey shows that one in two UK adults believe online transactions are becoming increasingly time consuming (49%) and complicated (53%).

However, this is just the tip of the iceberg as to why shoppers abandon their baskets. By understanding the causes of basket abandonment and by making a few adjustments, retailers can sizeably reduce the impact of basket abandonment.

High shipping costs

One of the main reasons for abandonment is that shipping costs are too high.

In the US last year, UPS and comScore partnered on a study which found that 81% of online shoppers said free shipping played a major role in their experience. Nine out of ten shoppers said they abandoned shopping carts, while 6 out of 10 said they’ve done so after finding out that shipping costs made the price higher than expected. Half said they abandoned carts because their order value wasn’t large enough to qualify for free shipping. The research also showed that shoppers are more likely to drop out if they have to wait a long time for delivery.

When asked what would encourage them to complete their purchase, 73% of respondents said free shipping, followed by a guaranteed delivery date (60%), a variety of payment options (56%) and a login option to save purchasing preferences (50%).

Not ready to purchase

A second group of people that abandon their baskets are those who are just not ready to purchase. This group saves items in their basket for later in order to compare the prices with other online retailers. Or they become distracted and forget to complete a purchase. They might also leave because their preferred payment options might not be offered.

This table created by eMarketer.com provides more detail about these first two reasons why shoppers abandon their baskets:

Infogram by eMarketer.com

Verification and registration processes

A final major reason for basket abandonment is forced registration, or the registration process being too long or complex.

According to a survey by insights experts Experian, nearly half (45%) of UK adults will abandon an online transaction due to this. Half of those (47%) said they simply went to a competitor, while one in five (20%) gave up completely and abandoned the transaction. Less than one in five (17%) bothered to try to resume it at a later date. Those living in relatively isolated locations with poor broadband access were most frustrated: three quarters (72%) said that verification processes were becoming more complex. This is significantly higher than the national average.

The Experian survey went on to highlight how tolerant people can be depending on the sector involved — retail scored second to last:

Experian Survey table

Studying this research will provide a better understanding of why identity and security procedures continue to be a source of annoyance for consumers and a key cause of lost business for online retailers. It is something that must be tackled.

Recommendations

Now that we have identified the main reasons for basket abandonment, here are a few ways that retailers could improve the checkout stage in order to increase conversion rates:

  • Keep it simple
    Avoid unnecessary barriers. Avoid too many clicks between selecting items and completing the final checkout process.
  • Remove compulsory registration
    The research has shown that customers often don’t have time for this, so by offering guest checkout you can massively reduce the number of drop outs.
  • Reaffirm sales messages
    This is your last chance to reaffirm messages to customers about why they are buying from you. You are ‘experts in’ or you have ‘excellent service’ might just be the final push the customer needs to purchase.
  • Reaffirm prices and delivery charges
    This allows customers to scan their basket and check their costs before they complete. Removing any ambiguity about costs means that they are more than likely to complete.
  • Provide alternative payment methods
    According to Worldpay, alternative payments account for 22% of global ecommerce transactions, worth a total of £165bn — so give shoppers other ways to pay.
  • Use clear calls-to-action
    Use big, clear messages so that the customer knows exactly what the next step is.

The results from the surveys described here reveal that there is a range of reasons why customers abandon their baskets at the checkout stage: high shipping costs, overly-complex verification procedures and last-minute distraction or indecision. By identifying potential issues with their checkout process and following the recommendations described above, retailers can decrease the number of shopping baskets abandoned by their customers and improve their conversion rates.

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