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How to keep online shoppers until purchase is completed
Denver Business Journal
Tony Felice, Senior Strategist, Red Door Interactive
Online retailers are faced with a hefty challenge these days: getting online customers to check out. While more people are buying online, shopping-cart-abandonment rates are increasing.
Listrak reported last October that those rates jumped from 71 to 75 percent in the first six months of 2011.
Human behavior is a very important factor when it comes to online shopping, and retailers should recognize some of the common snags that cause customers to end their purchase process. Here are three popular reasons why e-commerce cart abandonment occurs and solutions for sellers.
• Registration — Many online retailers require users to register before getting to checkout. This is perceived as a barrier to entry and causes some customers to abandon a purchase because they don’t want to take the extra time to complete the form or provide additional personal information.
There are two ways for retailers to overcome this challenge.
(1) Allow visitors the option to be just that — visitors. Websites such as Amazon give shoppers the ability to check out as a guest and forgo filling out tedious forms.
(2) Provide those who register with an added benefit. For example, Amazon has encouraged customers to register by offering the one-click ordering function, which allows shoppers to click on a product page and automatically make a purchase. This is a great strategy because people are more likely to complete a purchase when they feel little is required of them. In addition, it can result in more sales from impulse buyers. If companies can clearly communicate the value of registering, then it can be a bonus.
• Avoid surprise charges — Unexpected charges arise all the time. Online shoppers will locate items — but at checkout, they experience sticker shock because the total has increased due to unforeseen charges that weren’t taken into consideration.
If you’re purchasing an airline ticket, for instance, you’ll likely see the one-way charges, but it isn’t until you get to the payment page that other costs — such as exercise taxes, segment and security fees as well as passenger facility charges — are revealed. All of a sudden, there’s an additional $50 tacked on, which you didn’t anticipate. Not surprisingly, this will cause many people to drop off.
Hidden fees are a big reason why customers discontinue their browsing experience. Retailers can help reduce those dropouts by clearly communicating what the checkout price will be before shoppers begin the process. By setting expectations up front, it helps ensure they’re clearly met. Perhaps this can be accomplished by providing an estimate on what total fees might accumulate.
If sellers do this, they shouldn’t be concerned with overestimating a little because it likely will result in a buyer who’s pleasantly surprised when asked to pay less at checkout. This communication will help lower the dropout rate, and shoppers will have a solid grasp on what to expect when spending.
• Discounts — Discounts such as promotion codes actually can result in lower conversion rates for online retailers. These fields have a tendency to give shoppers the impression of a missed opportunity.
Once the individual recognizes a chance to earn extra savings, they set out on a Google search to find the mystery code. However, sellers run the risk of these customers uncovering a better deal elsewhere, and then they’re gone.
Retailers should re-evaluate how they’re using coupon codes. You don’t want to tease customers who don’t have one and give them a reason to leave because they’re searching for the code.
Suggestions include to decrease the prominence of this field, use custom URLs with each promotion or simply offer a universal discount code that’s displayed on all pages so everyone can use it.
Another idea might be to encourage email opt-in for access to the discount code. This strategy will allow you to add another contact to your email bank, and the promo code likely will result in a sale.
Other considerations might be to add alternate-payment methods that make buying easier. For example, younger online consumers are more likely to check out using PayPal because they don’t have credit cards.
Human behavior has a lot to do with shopping-cart-abandonment rates, and retailers should evaluate their pain points and get creative with strategies to reduce this trend.
View article on DBJ site>>>