FORBES – Bad news for you: Most of your online customers will abandon their cart, and not complete the sale. They will navigate away from your site, away from the shopping cart, and never complete the process.
The primary culprit for shopping cart abandonment is the checkout process. If you could improve your checkout process, you can improve your sales by a huge margin.
How much money is lost due to shopping cart abandonment?
The shopping cart abandonment rates are appalling. Some studies (I.e., Rejoiner) report that shopping cart abandonment is as high as 80%. The average abandonment rate reported by Baymard Institute is 67.91%. This number the percentage of people who, instead of completing their purchase, will leave your site.
Out of every one hundred users who puts something in their shopping cart, nearly 68 of them will leave without making a purchase.
Shopping cart abandonment is one of the biggest curses in the ecommerce industry. How much money are you losing due to shopping cart abandonment?
Let’s do the math.
- Monthly checkout visits. Let’s pretend you have 25,000 monthly checkout visits. Remember, these are just visits, not actual sales. A visit is defined as a potential customer who started to buy something. Maybe they selected a product and put it in their shopping cart, or they started to fill out their shipping information, etc.
- Average order value. Further, let’s say the average shopping card order is $200.
- Abandonment rate. Finally, let’s assume that your shopping cart abandonment rate is 67% — right at average.
- Shopping cart abandonment is costing you $3,350,000 each month, or $40,200,000 annually.
What could your business do with an extra $3.5 million monthly, or $40 million annually?
Those numbers are hypothetical, so try plugging in your own numbers:
Average monthly number of checkout visits (estimated) x Average order value (estimated) x .67 (average abandonment rate) = Monthly loss due to shopping cart abandonment.
I want these numbers to sink in so I can emphasize the information that follows in this article. Your checkout process is “the number one reason that people abandon the shopping cart. Sitepoint’s article,“10 Reasons People Abandon Online Shopping Carts” puts this at the top of their list: “Annoyed at Complicated Checkout Process.”
WorldPay created a survey of the reasons why people abandon shopping carts. Many of these reasons have to do with the checkout process. However, even the reasons on this list that are not directly connected to the shopping cart, could be ameliorated by improving the checkout process.
Here are the reasons why people abandon their shopping carts. I’ve highlighted the ones that are directly tied to the checkout experience.
The next logical question to ask is, “How can I prevent shopping cart abandonment?”
The set of recommendations that I provide below have to do with improving your site’s checkout process. This is where the wallet comes out, the customer is ready to buy, but the risk of abandonment is high.
Here’s how to improve your checkout process.
Six Ways to Improve Your Checkout Process
1. Make checkout mobile-friendly: Chances are pretty good that you have a responsively-designed site. But is your checkout process responsive, too? More specifically, is it optimized for mobile users? A greater percentage of users than ever before are not only browsing on their mobile devices, but using their phone to complete transactions as well.
A full 88% of smartphone shoppers have a negative experience when using their phones for mobile shopping. Their pain points, as surveyed by Skava and reported in Market Wired are difficult navigation (51%), tiny product images (46%), and inconvenient checkout process ( 26%).
To illustrate the frustration that customers experience with non-mobile friendly sites, here is how the typical process works. (Screenshots taken with an iPhone 5.)
First, the customer visits a website to purchase a plant. The print is so small that it is not possible to read without pinching to zoom. Further, the product images are also very small, making it difficult to see what the plant looks like.
Next, the customer selects a plant. Unfortunately, the text is still very small, making it hard to see shipping options and other important information.
Then the customer puts the item in the shopping cart. Again, it is difficult to see the specific information and even the total price for the purchase.
On the checkout page, the customer is presented with a bewildering form to fill out. The progress bar indicates that this is only the first of four steps to complete the checkout. Filling out this form on a mobile device would be very difficult. Most likely, a customer would abandon the cart at this point, if not much earlier in the process.
This is not an isolated example. It is a representative example, meant to show how big of a pain non-optimized checkout processes are.
By contrast, take a look at this mobile-optimized checkout process. Notice how the checkout page displays trust signals (“Payment secured with 256-bit SSL encryption), clear shipping information, and large tappable buttons.
I’ve intentionally discussed a mobile-friendly checkout process first, because I believe that most retailers could vastly improve their sales if only their checkout process was optimized for mobile.
2. Use a progress indicator: Customers need to be informed about where they are in the process. Frustration can set in if the customer thinks that the process is taking too long. If the customer can see a clear path towards completion, they are more likely to follow through on the purchase.
Notice how this flower retailer uses a three-step progress bar to indicate where the customer is in the process:
Remember your mobile users, too. Mobile users especially need to have a sense of their position in the progress. Notice the earlier image under “mobile-optimized checkout process”, the mobile checkout process that indicates my position in the “Final Step” of the process.
3. Be generous with payment options: Customers will want to pay in all kinds of different ways. Make sure you make it easy for your customers to pay using the most common methods of payment. PayPal is a must-have. Many customers use PayPal because of its apparent security and convenience. (With PayPal, there is no need to take out a credit card to complete the purchase.)
Both UnderArmour and Nike’s checkout process features the “Checkout with PayPal” button at the very beginning of the cart.
This gives customers a knowledge of the payment options before they get further into the process of checking out.
4. Don’t require membership or login: Some online retailers make a huge mistake by requiring that the customer log in or create an account in order to continue.
This is a major friction point that may produce abandonment. Often, customers are either not interested or not willing in creating an account. Most customers have a single intent — to purchase the item. Preventing this purchase by introducing the speedbump of a registration or account creation will result in abandonment.
Apple’s checkout process makes it easy to complete the transaction without creating an Apple ID (at least at the beginning). RayBan’s approach is similar. You can check out as a guest, create an account, or sign in as a returning customer.
The smaller your retail operation, the less “right” you have to demand that the customer create an account. Customers may be more willing to sign up with Amazon or Apple, but if you are a retailer that they only expect to purchase from once, they are less likely to create an account.
Your best option is make membership optional.
5. Put security features everywhere: A leading cause of abandonment is a distrust of payment security. The ecommerce world has been rocked by massive information leaks in the very recent past. Customers are understandably skittish about releasing their personal details and payment information.
As online retailers, we need to make sure that every step of the checkout process features trust signals — indications that the customer’s payment information is absolutely secure.
The method of assurance you provide is not as important as the fact that you are providing assurance. For example, few people have heard about “thawte” (Teleflora’s badge), but they know what “secured” means, and they know what a padlock indicates. Further, they know that that style of symbol usually means that there are security measures in place on the site. This gives them the confidence that they need to go forward with the purchase.
6. Request only the essential information: Endlessly filling out forms is the bane of many online shoppers. They don’t enjoy it. In fact, generally speaking, the less you ask for, the more they will be likely to buy.
Customers know intuitively, what information you need from them in order to complete an order. If I’m ordering a couple pairs of shoes from Banana Republic, for example, I know that I must provide a shipping address. The same is true when I’m ordering an iPad. If the company asks for any extraneous information, it should be marked as “optional.”
Shopping cart abandonment is one of the biggest sources of loss for online retailers today. The lion’s share of the blame falls directly into the online checkout process. By failing to fix these checkout issues, many ecommerce site owners are losing millions of dollars.
I don’t know how much money you’ll save by improving your checkout process, but most clients I’ve worked with have a recovery rate from 10-30%. The amount of sales that you can recover with rates like that really adds up.
What steps will you take to improve your online checkout process?