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Does Price Influence Cart Abandonment? You Better Believe It

Linda Bustos — Wed, 21 Dec 2011 08:03:39 +0000

Averages often shroud insights, which is why we should always apply segmentation to our data analysis. A fantastic example of this is recent findings by by Seewhy, which analyzed 264,631 abandoned carts and found a very strong relationship between the dollar value of abandoned shopping carts and abandonment rate.

Check out the 2 spikes in the chart below. Surprised by the percentage of low dollar value cart abandonment? This is reasonably explained by the shipping cost to item cost ratio. If an $18 sweater costs $15 to ship, the customer is more likely to jump ship.

Another peak happens around the $100 mark, which Seewhy believes is due to the psychological impact of $100 vs. $99 or less. Interestingly, higher ticket carts are abandoned almost half as often as ~$100 ones.

Other price points that spiked abandonment were $250, $400 and $500. Understandably, very high ticket items and orders require more consideration.

So what?

Knowing abandonment rates by cart value segment allows you to create an informed optimization strategy to reduce abandonment and recover abandoned carts.

Recommendations:

1. Bucket your abandoned carts into low-value, mid-value (around your free shipping threshold, if you have one, or use $99), and high value

2. Understand your shipping cost to cart value ratio for low value carts. SeeWhy suggests adjusting shipping policies to get the ratio below 20%

3. Find what critical price points have the highest abandonment rates. This is good input for selecting your free shipping threshold

4. Test your free shipping threshold. One of Elastic Path’s own A/B tests found conversion rates did not change between $100 and $60 shipping thresholds. Be sure to measure both conversion/abandonment and average cart value and revenue/profit.

5. SeeWhy recommends you investigate abandonment rates for individual products, and cross-checking the product detail page and shipping costs for these items to find clues as to why these products may be abandoned much. For example, a buy online pick up in store option may help convert certain items.

6. Think about pricing psychology when determining shipping threshold. SeeWhy’s ebook points out a good psychotactic used by Macy’s. Instead of a minimum of $100, it offers free shipping on carts $99 and above.

7. Track visits to purchase for higher value carts. Make sure your cart persists for 60-90 days.

8. Trigger remarketing emails (for cart recovery) based on cart value, considering those who abandon lower valued carts are likely motivated by different copy and offers than considered, high value purchases.

The full research report The Science of Shopping Cart Abandonment is available as an e-book download, with more information on strategies for cart recovery.

Looking for help with mobile commerce strategy? Contact the Elastic Path consulting team to learn how our ecommerce strategy and mobile strategy services can improve your business results.

8 Tips for Recovering Abandoned Shopping Carts

Linda Bustos — Mon, 07 Nov 2011 08:04:31 +0000

What is the biggest missed opportunity in ecommerce optimization? Is it A/B testing? Performance testing?

How about cart recovery?

We put a lot of focus on optimizing the cart, getting the customer through to conversion, yet still it’s not uncommon to have abandonment rates of 50% or higher. We know a good chunk of abandonment does not occur because the button wasn’t big enough or green enough or our web forms are too long. Some got distracted, some wanted to hold items for later, some left and couldn’t remember your site URL, some even thought the transaction went through when it did not.

Cart recovery emails enjoy astronomically higher conversion rates and ROI than regular email, and give you a very good chance of saving sales at a relatively low cost.

Click to enlarge image

The Missed Opportunity with Cart Recovery

A study by RedEye and Econsultancy found that 54% of companies surveyed do not target cart abandoners, compared to 26% that do. If we strip out the 20% that report cart recovery is irrelevant to their business, it’s 68% that don’t and 32% that do.

Compare this to the same survey’s findings that 53% of companies use A/B testing, cart recovery is quite possibly the biggest missed opportunity of ecommerce optimization.

But it’s not enough to just do it. There are best practices to get the most bang for your retargeting buck.

Don’t Delay

This isn’t dating, where you take a phone number and have to play it cool for 3 to 5 days to make it look like you’re really busy and important. Your conversion rate will not increase by making the customer sweat by your self control.

According to SeeWhy research, which has analyzed data from over 60,000 abandoned carts, 54% of all carts that are successfully recovered are won back within the first few hours after abandonment. An additional 10% can be recovered within 48 hours, and at the end of 7 days, 82% can be recovered.

Conversion rates for real-time recovery emails are 11% compared to 6% and 3% for 24 hours and 7 days, respectively. Open rates are also higher for real-time triggers – 60% vs. 55% after 24 hours and 50% after 7 days. Revenue per email is $11, $4, and $3, respectively.

Instant emails also reduce the risk that your customer converts before your “batch” of recovery emails are sent out for the day, saving you the embarrassment of an irrelevant email, or angering the customer that they could have received a discount if they had only not completed their purchase.

Shift from Manual to Automated

The RedEye and Econsultancy research highlights a shift from manual recovery methods to automated from 2010 to 2011. Good. Software is smarter, faster and better looking than us, and we should embrace that.

Be a Serial Stalker

Plan a series of 3 triggers, one for real-time, one after 24 hours and one after 7 days. The copy and creative of the email may be slightly different to reflect the lapse of time and to stagger offers (the first email may be just a friendly reminder, subsequent messages with sweeter deals). When possible, segment out recipients who have not opened the first email, opened but not clicked, and opened and clicked and target them accordingly. You may tinker with a series of more than 3 messages, but 3 is a good place to start until you get the feel for customer behavior.

Segment and Test Different Creative

You may want to trigger certain types of messages and offers depending on what’s in the cart. For example, high ticket items can absorb a free shipping offer better than low margin or low price items. Some product categories may naturally have a longer days to purchase or visits to purchase, and reminders rather than discount offers are effective without knicking your profit. And the more exclusive your product, the less you need to woo customers with discounts. Victoria’s Secret, for example, does not sell through other retailers. Vicky’s abandoned carts may simply need a reminder their cart is saved and ready for them to complete their purchase. The customer may be motivated by “your purchase qualifies for a Bonus Gift, click here to claim.”

Treat your emails like landing pages and test them. We know calls-to-action, copy (tone, length, messaging), images and layout all have an influence on persuasion and conversion. Don’t just “set it and forget it.” For some design inspiration and tips for content, see our previous post 14 Tips for Cart Recovery and 10 Emails Deconstructed.

Don’t Reward Abandonment

Discourage customers from abandoning in order to receive the “prize” discount by mixing up your offers. In other words, don’t send a discount the first time, every time. If possible, identify and segment out email accounts that have purchased after receiving an offer code. Alternate with “friendly reminder” emails with real-time triggers.

Plaster Your Value Proposition

Persuade comparison shoppers that your site is the right choice to purchase from, regardless of price. Include your value proposition, and don’t be discreet about it.

Capture the Email Address Early

Most importantly, capture the email address early, because you can’t trigger unless you have an email address. The best way is to ask for it as the first step, not just in the first step.

Follow Abandoners to Facebook

What about cart summary pages, before you can collect an address? If the customer was referred by an email campaign, it’s technically possible you can tie some carts back to the email address. But in most cases, using Google’s new Remarketing program allows you to target the cart-abandoner segment with whatever creative you like, such as a 10% off coupon or “your items are waiting for you at {brand.com}.” Your ad will follow them to Facebook and pretty much any site that shows Google display ads, which may get you more attention than an email series.

In fact, the two can work in tandem. Why not run Remarketing campaigns along with a cart recovery email program?

Looking for help with ecommerce site optimization? Contact the Elastic Path consulting team at consulting@elasticpath.com to learn how our conversion optimization services can improve your business results.

Shopping Cart Page Checklist: 16 Things I Look For

Linda Bustos — Mon, 02 May 2011 08:05:23 +0000

Last week in Checkout Optimization: Are You Testing The Wrong Thing?, we looked at the top reasons customers report why they abandoned their last shopping cart. You’ll recall the top reasons had nothing to do with web usability and design, but the customer’s willingness to complete the purchase at that given time – including “sticker shock,” a desire to comparison shop, or they simply were not ready to purchase yet. We discussed ways each FUD (fear, uncertainty and doubt) could be addressed on your shopping cart page, with a promise to cover the design and usability goodies as a follow up (i.e. this post!)

While there’s no recipe for an “ideal” shopping cart page, there are elements I look for when reviewing a site – both “must haves” and “nice-to-haves.”

Must Have Shopping Cart Page Features

1. Provide large, clear thumbnail images

The cart summary is the customer’s last review before initiating checkout. The customer *should* review the cart for accuracy, however some will only scan (I’m guilty of the lazy review and that’s how I ended up with a used copy of Barbara Walters’ memoirs)!

Believe me, customers will blame you for an error before considering they may have made the mistake. I wrote Alibris about the “error” before realizing I was the dunce. But this could have been avoided if the cart summary showed boldly each product thumbnail and description in my cart. For some e-shops, color will also be important in the review. For software that often has several SKUs with the same thumbnail image, it’s important to clearly highlight the differentiating attribute (e.g. 1 year subscription vs. 3 year, student edition, etc.)

This cart is difficult to review without clicking on individual products:

The Apple Store shows a thumbnail, but does not indicate what color iPod I’m ordering.

Eddie Bauer shows clear and large images (you can even zoom!)

2. Include product link, price and quantity selected

Don’t laugh. These are important!

3. Show stock availability

You may think this is unnecessary, especially if you disable cart buttons for out-of-stock products. But we know a portion of your customers will “save” items in cart and return at a later time. It’s important to assure customers the item is still available, and notify when items are unavailable.

Etsy makes it clear when items from its marketplace are no longer available, with options to move to favorites (wish list), remove or contact the seller. Similarly, an ecommerce site could add a “notify me when back in stock” link in lieu of contact seller.

Staples includes cross-sells below unavailable products. (This should be tested, as it may also reduce conversion):

4. Provide clear editing tools (update quantity and remove)

It’s not enough to have editing tools, they must be intuitive and “easy to spot.”

Avoid little icons that are difficult to interpret, like circular arrows to “recalculate” or refresh. Text links “Remove” and “Update” are more clear.

Avoid placing editing buttons out of the content space where the editing occurs:

5. Provide a visible telephone number

Always provide a second option if there’s trouble with Web checkout. Worried about attribution? Some sites use vanity toll-free numbers to track conversions referred from paid search, direct type-ins, affiliates, etc.

6. Offer clear, non-competing calls to action

Avoid styling your “Proceed to Checkout” and “Continue Shopping” links the same way. Prioritize your calls to action with “Proceed to Checkout” more prominent.

7. Show calls to action above the fold

The more items in the cart, the lower down your Checkout button sinks. Including calls to action above and below the order details ensures it’s noticed. It doesn’t hurt to duplicate them. (See Walmart example above).

I also recommend keeping the Checkout button in the “content area” or white space of the order review. Many large sites including Apple push it off to the right hand side with a mini-cart, which may not be where customers expect it.

8. Include point of action assurances

Point of action assurances (PAAs) should appear proximal to the call to action – not way up in the header or down in the footer.

Beyond the security seal, other PAAs include privacy links, return policies, “shop with confidence” boxes, or taglines below the Checkout button like Amazon’s “you can always remove it later” (which, has apparently since been removed).

9. Minimize your coupon code box

Showing a coupon box is an invitation for the customer to go deal hunting. This not only eats at your margin by discounting the cart, but you will also be shelling out commissions to affiliates who did not refer the sale.

There are a few ways to handle this issue:

1. Suppress the coupon box unless the customer has been referred by an email or affiliate campaign with a coupon code. You have the choice to auto-apply the promo or show the box.

2. Link to your own coupons page

3. Re-label the field as “Voucher” or “Gift Certificate”

4. Create an inconvenient hurdle to use the code, such as log in.

10. Pre-checkout tax and shipping calculation

A OneUpWeb survey found that 95.5% of customers expected to have price and shipping clearly stated, and 59% expect a “total cost” (tax + shipping + anything else) on an ecommerce site. We can safely assume this means pre-checkout, as nobody wants to get through a sign in page and shipping/billing form before he/she can judge whether a price is acceptable.

An interesting observation is the 10 highest converting ecommerce sites, for the most part, do not provide pre-checkout tax and shipping estimate. My opinion is to err on the side of meeting customer expectations. There are many reasons why these sites have astronomical conversion rates (exclusive/niche product, strong catalog history, distributor network, etc) which afford them strong conversion – it doesn’t come down to a common variable. (What do you think? Share in the comments).

Nice-to-Have Shopping Cart Page Features

11. Live chat

If you have a telephone number, a customer in distress will reach out. But having a live chat link or pro-active prompt is great, too. Today’s email/texting culture may prefer this method.

12. Move to wishlist

For customers who encounter “sticker shock,” or a total that’s above what they can afford, whittling down items in the cart is a common behavior. Make this easy by allowing customers to move items to a wishlist. Amazon keeps items moved from cart to wishlist appended to the cart summary, so customers are reminded the next time they’re ready to purchase.

13. Display payment options

Some folks only want to shop with PayPal, Google Checkout, Amex, etc. Showing icons can provide reassurance to these customers, but they can also compete as calls-to-action (depending on how they are displayed). One way to handle a large number of acceptable payment types is to provide a link that expands with a click or mouseover to show alternatives for those it’s important to, and suppressing it for folks who don’t care.

14. Quick Look cart editing

Extending the Quick Look feature to the cart can help a customer re-configure their selection without leaving the cart.

For complex sales that require configuration (mobile phone plus package and accessories, for example) in-line editing ability (expand and collapse details with an AJAX plus-box) is a nice feature.

15. Carrots

Reminding customers that they are $X away from (free shipping, free gift, etc) could improve your items per order and average order value.

16. Cross-sell/upsell

While not essential to conversion (and some may argue, may lower conversion), cross-sells and upsells in the cart can improve your IPO and AOV also. (This is a major opportunity for ongoing testing – testing the number of recommendations, the type of associations, price points, placements, interstitials etc).

When I review a site, I look for areas where the cross-sell/upsell experience can be improved – not just a tick mark for “has/does not have.”

16. Gift options

Not only a nice upsell, but great customer service if you offer it.

17. Print/save cart

Certain purchase contexts make sense to print or save carts. For example, a large B2B purchase, or a cross-channel research online, purchase offline sale like a home improvement project.

Testing your cart

The presence of these elements are not the end of shopping cart optimization. It’s also key how they are presented, and how your cart page works as a whole. This list is a guideline to show you what you may be missing, but ongoing testing is the best way to continue to learn what works best for you.

Looking for help with A/B and multivariate testing? Contact the Elastic Path consulting team at consulting@elasticpath.com to learn how our conversion optimization services can improve your business results.

Checkout Optimization: Are You Testing The Wrong Thing?

Linda Bustos — Wed, 27 Apr 2011 08:04:28 +0000

If your cart abandonment rate is, say, 58% – where do you start to fix the problem?

Many marketers would jump in with optimizing the checkout process by reducing steps, slicing and dicing form fields, changing button colors and adding security badges.

But what if most checkouts were not abandoned because of anything “confusing” or broken in the checkout process?

According to Forrester Research, only 11% of consumers report their last abandoned cart was due to a long or confusing checkout. Only 12% believed the site was asking too much information, only 14% were unwilling to register with a site.*

The most common reasons customers bailed boiled down to “sticker shock” (due to high shipping charges, taxes or other fees, or a high product price), the desire to comparison shop, and simply not being ready to check out at that moment. (Good ol’ FUDs).

No matter how pretty your cart button, how short your checkout process or how clear and usable your form fields, you can’t save these sales. But that doesn’t mean you can’t optimize your site for non-usability factors of shopping cart abandonment.

Let’s take a look at 5 top reasons why customers abandon, and how you can address each Fear, Uncertainty and Doubt.

Shipping costs too high

1. Make free shipping or shipping discount applications very prominent

Pre-checkout shipping estimate tool helps the customer judge the shipping charge

I was not ready to purchase the product

1. Create urgency

Include value proposition of “owning it today” (this will depend on your product and the purchase context)
Highlight any limited time offers/discounts – don’t bury them below the fold or in graphic elements that may suffer from “banner blindness”
Highlight financing options like $X/month (when applicable)
Show stock availability / mark products with high sellout risk

2. Allow customers to log in to save their carts

30% clear cookies daily, a saved cart safeguards against wipeout
Enables registered customers to retrieve their carts across devices
Abandoned carts can be remarketed to (triggered email program) when you have an email address

3. Persistent cart

To support those who will not choose to save the cart

I wanted to compare prices on other sites

1. Reinforce your unique value proposition

Value props are not just for home pages and landing pages – the cart is perhaps the most important place to convince the customer to buy from you and nobody else

2. Suppress your coupon box

The presence of a coupon box may send your customer huntin’ for deals from your affiliates, costing your margin and commissions. This is a form of comparison shopping – where can one find the best deal? Handle this issue by hiding the coupon box for customers who have not been referred by an email or affiliate with a discount (using cookies), or auto-apply any discounts these shoppers may receive

Product price was higher than I was willing to pay

1. Financing, if you offer it, could make the price more digestible

2. Boldly highlight (in red, green or orange) any auto-applied savings or sale prices

Just wanted to save products in my cart for later consideration

1. Use a persistent cart and enable saved carts, save-to-wishlist

Track % of “save-to-wishlist” actions and deduct from your cart abandonment rate

While these tips won’t take care of your cart abandonment completely, addressing these issues before getting into design and usability will get you further than UX alone. Stay tuned, next post we’ll look at the design/usability things that make a shopping cart page effective.

* Forrester Research has also reported that 23% of customers would abandon carts when asked to register. Because many sites do offer guest checkout, 14% abandonment due to required registration does not mean that customers care less about site registration, rather, less customers encountered them.

Google Checkout – What is it?

Jason Billingsley — Thu, 29 Jun 2006 21:43:24 +0000

Google has finally release a product/service that is NOT stamped with a ‘beta’ moniker – Google Checkout. I am a fan of Google. I don’t believe they are turning into an evil empire, nor are they taking over the world. However, Google Checkout is a fine bridge to moving beyond monetization via B2B and embracing the wallets of consumers (though they will still be making their money from businesses at this point still).

What is it? (From the horse’s mouth)
“With Google Checkout™ you can quickly and easily buy from stores across the web and track all your orders and shipping in one place.”

How does it work?
Instead of checking out using the merchants regular shopping cart checkout method, buyers have the option to click the ‘Fast checkout through Google’ icon, whisking them away to complete the transaction on Google’s service. The benefit for consumers being they can store all their addresses and credit cards and track all orders in one place, and use them at multiple ecommerce stores. Sound familiar? Microsoft tried it with Passport (though it was primarily for identity management) and we have seen it’s adoption wane.

Why would an online retailer offer such a service?
Well, if you are an AdWords advertiser (and really, if you are serious about online retailing, who isn’t), once you are up and running the Google Checkout badge will be displayed on your AdWords ads. Something I imagine will help your ad stand out (an icon in a land of text).

The kicker – for every $1 you spend on AdWords, you can process $10 in sales for free. For sales that exceed this amount or if you don’t use AdWords, you can process them at a low 2% and $0.20 per transaction.

What are the caveats?
What I am seeing on most vendors’ site is coupons, gift certificates, and gift wrap are not available when using Google Checkout – however, there is an API that allows merchants to tie this functionality into their system. It is dependent on the level or type of integration embarked upon.

What are the downfalls?

At first glance it appears you would have to manage orders in two separate systems. If I dissected the API a bit more, I could determine if this is in fact the case.
Depending on your user base, more options are not always beneficial.
Possible loss of visibility into checkout abandonment points

What about PayPal?
PayPal has a similar offering to Google Checkout, but it is slightly more streamlined. A fully integrated PayPal offering allows users to complete a checkout without ever leaving the merchants website. Will Google Checkout displace PayPal? Not likely. PayPal has a stronghold in the P2P transactions and the bread and butter will remain there for sometime. eBay is not likely to allow sellers to conduct transactions using Google Checkout – why would they?

Where does Elastic Path fit in all of this?
Stay tuned. I am sure we will do a thorough investigation of the most appropriate method of integration and gather feedback from customers on the demand for such a service. Elastic Path ecommerce software is currently fully integrated with PayPal, but few customers utilize the feature – it will be interesting to see how much merchant adoption of ecommerce software with Google Checkout occurs.

Final word
I think this is a great move for Google. This service will be glue for many of their offerings in the future. I think they made a mistake with the branding of it as it theoretically restricts the service to being a vendor to consumer transaction platform. ‘Checkout’ is not a versatile brand in my mind – GBuy is. But, perhaps Google doesn’t have an eye on markets like mobile P2P transactions or offline transactions like PayPal does.

I only assume PayPal will make a move to offline sooner than later based on my experience in the eBay campus store – employees can swipe a card (kind of like an ESSO Speedpass, and the purchase is deducted from their PayPal account – very slick).