Ecommerce Checkout Article
With nationwide online retail sales expected to reach above $100 billion this year – estimates range from $115 billion to $175 billion, excluding travel – it is very evident that there are lots of would-be customers visiting the Web sites of their choice with the intent to purchase items.
Not withstanding the gaudy projected totals, online retail sales only represent roughly 5 percent of the total U.S. retail marketplace. Still, Internet use in America and around the world continues to grow, with broadband access gaining in penetration to even rural, isolated areas. The more ‘net users, the greater the number of potential customers for online retailers (sometimes called e-tailers) to sell their wares to.
That’s a good thing; now for the bad news – approximately three-quarters of online customers abandon online shopping carts during the purchase process. The reasons that they do so include the desire to simply comparison shop, too-high shipping costs, technical difficulties experienced during the transaction and a lack of time to complete the purchase, among others.
It is therefore vitally important that online retailers do all within their power to convince putative buyers to complete the sales transaction and purchase the product(s). Studies indicate that there is a lot of room for improvement in this area.
Technical problems, in particular, continue to dog smaller e-tailers who don’t have the wherewithal to offer advanced shopping carts, nor to have experienced computer programmers on hand to fix things if there are any breakdowns. As a result, many smaller online establishments struggle, both with attracting customers from larger Web sites and with fostering a level of trust with their visitors that credit information is safe.
The largest, most well-established sites are by no means short of financial resources to make customers’ online experience as smooth as possible. However, not even those who are among the best in the business – for example, Amazon.com – can afford to rest on their laurels, but should always be searching for new ways to improve on the abandonment factor.
What are the most important factors in creating the best online buying experience? Numerous studies on the subject have shown that most of the shopping cart features, in and of themselves, confer neither a huge benefit or detriment to online sales. These include:
The method and cost of shipping – Buyers, of course, want to receive their items as quickly as possible at the lowest possible cost. Free shipping, provided a given customer purchases a certain dollar amount of merchandise, is a very popular option among the bigger e-tailers. By most accounts, it is a popular option, particularly if the shopping cart is flexible enough to inform a would-be customer that purchasing another item or two would make them eligible to reduce shipping costs to zero.
Allowing for gift wrapping or sending a message to the intended recipient – Studies found that adding new levels of complexity to the shopping cart experience usually evoked a collective negative response from online shoppers. While most large e-tailers offer the aforementioned options, there was little indication that it significantly helped their overall conversion rates.
Placing the ability to ‘cross-sell’ once a customer makes a choice into the shopping cart – Given the level of Web programming necessary to effectively employ this tactic, it is not surprising that only a small percentage of even large e-tailers were able to offer this option. By presenting similar or complimentary items, even if the customer didn’t opt to buy them, the amount of products being placed in front of them substantially increased, which is a positive factor as long as it didn’t unduly interfere with the shopping cart process. However, this option was not judged to be a huge determinative factor in whether or not a person chose to go through with their original transaction.
Requiring a Card Verification Value (CVV) code during checkout – Utilized as an anti-fraud measure, the three-digit code is found on the back of all major credit and debit cards. One major study found that making the code mandatory for online purchase reduced the overall effectiveness of the shopping cart. This follows the general rule, which says that if the sales transaction is made more complicated, people will get frustrated and abandon their carts. The majority of major e-tailers had this feature built into their online transactions, so one could conclude that each of them were trying to achieve a sort of balance between protecting against possible fraud and boosting sales.
Displaying cart items and the sales total throughout the transaction – Relatively few e-tailers display both the item(s) purchased and the cost throughout the entire purchase transaction. There are screens – for example, where the credit card information is placed into a form – where one typically cannot see what has been purchased. By most accounts, no great advantage or disadvantage was gained by presenting the noted information on every shopping cart page.
Anonymous check-ins – A slight advantage in overall sales was experienced by sites that did not require persons to create an account before purchasing items. This is an unsurprising result, given the fact that reducing the level of complexity allows the transaction to be completed more expediently.
Alternative payment methods – With the emergence of payment portals like PayPal, online buyers are no longer locked into deciding which major credit or debit card they wish to choose from when shopping online. Catering to a younger, hipper demographic, the inclusion of alternative methods helped sites with relatively inexpensive merchandise, while the option was not present in most e-tailer shopping carts who offered high-ticket items. Therefore, for certain types of sites, this factor could be said to be determinative in boosting online sales conversions.
Online coupons – Seemingly a no-brainer (who wouldn’t want to be able to save money in the middle of a transaction), this option did not confer a decided advantage on the Web sites that utilized it. It appears that the desire to complete the purchase as quickly as possible overweighed the ability to save during it.
Editing an item in the final steps of the shopping cart process – This option falls into the category of providing too many options, and did not confer an advantage upon retailers who featured it. It seems that a safer tack is to provide as few distractions as possible once the would-be buyer is approaching the completion of the sales transaction.
Optimal number of pages in the checkout process – As already stated, the less complexity, the better. E-tailers with long complicated checkouts did not display an advantage over sites with a simpler process. There was, however, a disparity based on the amount of money being paid. Purchasers of expensive items tended to be more tolerant of additional screens than those shopping for cheaper ones. In all, the best conversion rates were found in sites who had 3 – 4 pages in their shopping cart process.
Other more technical features, such as Live Chat, were only offered on a minority of large e-tailer’s sites and did not confer any great advantage in sales conversions.
Industry experts who closely observe online retail indicate that there are some steps that an online seller can take to decrease the number of abandonments and increase sales. One is to integrate a customer feedback system into their shopping carts. A few, brief questions, once aggregated, can tell an e-tailer volumes about their customers’ likes and dislikes. Since different sites cater to varied audiences, knowing more about the specific demographic desiring to purchase items on a given site can assist in ascertaining what features to include or remove.
Another key feature is allowing for a customer to save his or her cart contents in the event that they are unable to complete the sales transaction at the time it is initiated. Thus, upon a return to the site, the person does not have to go through the entire process of selecting the desire item(s) all over again.
In conclusion, it is safe to say that the picture is far from clear as to the determinative factors in increasing online sales conversions. What works for one type of site might be a huge detriment to another.
In a fiercely competitive market, e-tailers are best advised to find out all they can about the people who frequent their online retail locations, and tailor the shopping cart to best suit them.
One factor remains constant, though: the ability of any e-tailer to deliver an uncomplicated, smooth buying process, which involves as few steps as possible, will put themselves in the best position to convert online visitors into purchasers and minimize shopping cart abandonment.
