A study carried out by Paypal Checkout Abandonment reveals that online shopping is steadily on the decline. A number of factors, including high shipping costs, are attributed to this. In fact, as much as 46 percent of US shoppers cited high shipping charges as the primary reason. Other reasons for decline in online shopping, as found by the survey, are:
-Lack of convenience
The study also found that lack of transparency regarding shipping costs maybe a reason behind shopping cart abandonment. "The survey found that providing shipping costs upfront might have influenced 40 percent of the survey respondents to complete the purchase."
To help merchants encourage shoppers to purchase, Paypal™ has announced a new Express Checkout feature – which includes Paypal Instant Update API. More information here!
NUTTIE GURU SAYS: The shopping cart abandonment rate as reported by Paypal is just an average, and averages don’t always work for everyone; it may vary from niche to niche, depending on some factors such as:
a) Shipping costs: For some niches it may not be a big deal, especially in niches such as jewelry, cosmetics, electronics, etc., because people who buy such stuff usually have the necessary cash to spare. They are desperately in need of this specific item and (more often than not) also have the ability to pay for it; as such, high shopping costs is unlikely to deter them! ;)
However, in poorer niches such as internet marketing (No offense meant to any IMer) or collectibles, shipping cost indeed may become a dominant determinant of your conversion rate.
b) Checkout process: If the customer is forced to click on too many links/buttons in order to complete a purchase, or if s/he is required to fill up a lengthy order form, you are very likely to have a high shopping cart abandonment rate! If you are selling just digital products, it maybe a good idea to ask just for the customer’s first name and email during the checkout; later on, you can always ask him/her to add more information to his profile so as to [insert customer’s benefit here].
For physical goods, the customer understands that you need information such as shipping address, phone numbers (in case of problems), etc, to process the order smoothly. For digital goods however, the customer knows you don’t need all these information in order to deliver the goods! :)
Interestingly, while some people believe that the one-page checkout boosts conversions, others say it actually drops the conversions for them. Go figure! ;)
Brand image of your company may sometimes work in your favor even if you force the customer to fill up a long order/registration form during checkout, because many people would not hesitate to fill up a lengthy order form if they trust the site (for example, think Google™ or Amazon™)!
However, they may refuse to do the same thing when buying from a Nuttie Guru’s store (and for your information, I have had my share of low conversions when I was using the lengthy order form offered by Jvmanager 1- having no other option. Thankfully JVmanager™ 2 offers you much more flexibility in that regard! )! ;):)
c) Upsells: Upsells are a familiar option customer encounters during checkout process, especially in mainstream niches such as internet marketing, weight loss, PC security, etc. Provided that your product is good and the difference in price between the original product and the upsell is not much, people would surely go for the upsell.
However, upsells may not be so successful (or even end up being a downright disaster) in other niches! Also, too many upsells on the order page, even if they are all related to the main product the customer is buying, can actually overwhelm and distract the customer!
While I really love the upsell strategy of Amazon.com, I think sometimes they just overdo it, so much so that I feel like abandoning the checkout process altogether! If this could be my mental condition, imagine that of a customer who is hardly online 24 hours a day! To be honest, we internet marketers are not as big and popular as Amazon either, so we may fare even worse!
d) General Cart layout: A few studies say that shopping cart buttons work better than text links, and that animated buttons work even better than static buttons. Again, this is something that needs to be tested on your end!
e) Payment options: It is not always necessary to sell stuff at rock-bottom prices in order to have the highest conversions possible! If you want, you can use services like Bill Me Later or Trialpay to lower the barrier to entry for customers (note that I DO NOT have any personal experience with these services).
If your target niche/economy is one where the average buyer has a significantly low FICO score, this might be a good option to implement. The entire year of 2009 being riddled with recession blues, it is not just online shops but also physical stores that are facing a downturn in sales!
Incidentally, Paypal supports Bill Me Later as a payment option (although it is available only to a select few countries of USA, as of this writing)!
If the bulk of your site traffic comes from a country where very few customers possess credit cards (such as India), it is perhaps a good idea to offer offline purchase options such ordering by phone, fax, money order etc. A majority of people in India (I don’t just mean the masses but also banks and other financial institutions) don’t even have any idea of what Paypal is, and very few indeed posses international credit cards.
In such a country (I am sure there are many other countries similar to India; for the record, a non-IM customer from Ghana once asked me if he could pay me via Western Union™ since that is the only available mode of payment in his country; for those who are reading this, DO NOT pay or receive money via these modes of payment as they are frequently abused by internet fraudsters and scammers. I refused that prospect from Ghana as I thought it more prudent to lose a sale than trust a stranger with something as risky as Western Union).
Ordering by money order/check is quite outdated and not something I recommend unless you have no other way! Ordering by either phone or fax seem to better alternatives!
f) Coupons: Coupons are evil, but not a necessary one. Several marketers point out that the absence of the coupon code box on the checkout page resulted in higher conversion rates compared to its presence! Again, it is very niche-specific and may or may not apply to you!
At the same time, you also need to consider whether withdrawing the coupon code box from the checkout page would do more harm than good. There are some ways to use the coupon system differently and carefully (depending on the e-commerce platform you are using) as suggested here.
g) Overall look and feel of the store: If your "Add to cart" and "Checkout" buttons/links are not clearly visible, i.e., if the customer has to try hard to find those buttons, chances are that he would hop to somewhere else. Also, if your checkout page contains third party ads, they may distract your customer and you may lose sales!
If you must include third party ads on order page, add them to the very bottom because only those who have little or no interest in buying your stuff would scroll down at the bottommost part of your checkout page (expecting a better deal or freebie?).
f) Security seals: If the Trustguard™, BBB™ or Hackersafe™ seals on shopping cart checkout pages are familiar to you, there is a good reason why these merchants use those seals. Apparently they help build trust among customers, epically those who are either paranoid of or new to online shopping.
If your order page is secured by SSL, it might further help in the trust-building process. These options however cost a lot of money and may not be affordable for you unless you have reached a point where you are making a decent income from your store!
Of course if you are a dishonest scammer out to con customers then no amount of seals and logos would save you from angry buyers and their refund requests! ;)
A SIMPLE SPLIT TEST PROVED OTHERWISE: While you might have seen such "security badges" in many eCommerce sites, I would give you an example of one of our fellow internet marketers: Mike Filsaime. He uses such security seals and logos on the Paydotcom checkout page, apparently to build trust and confidence in the shoppers.
However, a simple split test between a PDC and a non-PDC affiliate link (with no seals as such) revealed to me that many people hesitate paying via paydotcom, for reasons perhaps best known to them. In both cases, the salespage was same! Whether it is because of PDC’s association with Mike F or something else I don’t know.
I would like to add that while I like the Mike F guy, I am not a fan of any of his products, including Paydotcom (I am saying this both from a merchant’s as well as an affiliate’s point of view)!
Most probably I forgot to give you the details of the split test. Here is the story: a certain internet marketer uses an in-house affiliate manager script on her main salespage; that salespage used to (and still does) generate significant revenue for me. One day, I discovered that the same marketer has setup a similar salespage on her site, with Paydotcom as payment option (possibly to get sales from PDC’s affiliate network).
I quickly signed up to her Paydotcom affiliate program to give the PDC link a try and see if it makes me more money than the pervious, non-PDC link. Right from the date I started using the PDC affiliate link, I stopped getting sales altogether! It was not until I reinstated the old non-PDC affiliate link that I started making money again! This can be quite an exceptional case though!
g) Customer reviews: I know only too well that customer reviews are dime a dozen; yet, almost always I find myself getting attracted to the Amazon products which have lots of positive reviews and ratings! ;)
h) The KISS principle, commonsense and tracking: Even if all other rules of web design change over time, one rule would almost always work today, tomorrow and beyond – the rule of simplicity. If you keep your website or shopping cart user-friendly and easy-to-navigate, you will have fewer abandonment rates than otherwise; this is true for every niche!
Putting yourself in the customer’s shoes is a good idea as well. Test out the order process (right up to the product delivery) to get a feel of it! Even better, use one of your friends (probably someone who is not very familiar to the world of online shopping would be a good fit for this) as a guinea pig.
You would instantly know what is working and what is not, as well as what needs to be improved, thus enabling you to nip any problem in the bud or even do away with any superficial step from the checkout process. Generally speaking, the fewer hoops you have in the checkout process, the more conversions you would have!
Finally, nothing beats LIVE TRACKING! I would even go as far as to say that you should take everything mentioned above and on other websites as a grain of salt and see things for yourself! Throughout this article, I have repeatedly pointed out that your mileage may vary. If you really want to have 100% correct information, TEST and track!
i) Customer Followup and Feedback: If your shopping cart allows it, it is perhaps a good idea to send follow-up emails to those who abandoned the order process midway for some reason (I don’t mean that you auto-add these people to your autoresponder and irritate them with unrelated promos). Ask them for the reason behind the shopping cart abandonment and offer them a "secret" or "exclusive" discount coupon or bonus as incentive.
While you should not take every prospective customer’s comment at face value (some people can be downright nasty while others are quite impatient), this procedure should give you a broad overview of what you could do to minimize shopping cart abandonment rates and maximize your sales and revenue!
THE BIG QUESTION : The million dollar question remains: which shopping cart software supports all the above features? Hmm, that is a tough question, one that I don’t have an answer to! Whether you are using a hosted eCommerce service such as 1shoppingcart or self-installed scripts such as Dlguard or anything else, you need to be certain that you are making the right choice.
Just like in case of marriage, a wrong choice of ecommerce platform can melt down your entire business!
If you don’t get anything to your liking, your last option is hiring someone for building a custom eCommerce solution for you. However, it may not be an affordable option for everybody, especially those who are on the lower-end of income strata! Speaking of 1shoppingcart, I do like their order and checkout pages but in my opinion their affiliate page is not that impressive; moreover they are very costly too!
Many people predict that Magento is going to be the "next big thing" in eCommerce (their feature list looks quite impressive, plus it is open source too), while others complain that it is a resource hog (you would need a VPS or Dedi to run it without issues) and also very difficult to operate for an average, unetechie person!
What this means is that you may need to outsource the technical part of Magento (including maintenance and upgrades) to a third party (which is not a big deal if you can find someone truly reliable and intelligent) or opt for their enterprise edition (which costs about 8,900 USD per year, or roughly about $750 per month)! ;)
Further articles on shopping cart abandonment, and how you can minimize it significantly:
Paypal checkout page credit card abandonment
PayPal: Shopping cart abandonment rates rise
Don’t Give Your Customers a Reason to Park Their Carts
Can anyone recommend a best ecommerce shopping cart software?
Ecommerce Solutions – Start Online Business Easily
Resources: Ecommerce forum
After I finished writing this article, I found the following thread that maybe helpful as well (although it seems most of the tips offered by this forum member overlap with mine, it is still worth a look):
I hope this article offers you some food for thought, if nothing else. If you have a shopping cart software (preferably a self-installed one) to recommend (with a link to your store please, if you don’t mind) you can let me know and I truly appreciate it!