Cart abandonment rates are the thorns in every retailer’s side.
Addressing this problem is akin to pruning a rose bush without getting stuck with those thorns. For merchants, the bouquets that can be harvested represent your customer acquisition opportunities.
The strategy for addressing the prickly parts of retail is using your checkout experience to transform the customer shopping journey into a pleasant one. Not only can these strategies help you overcome cart abandonment, but they create true revenue-boosting opportunities.
Reducing cart abandonment rates requires a multi-channel approach that addresses each touch point of a customer’s interaction within the online shopping experience. The key is to reduce the number of interruptions, add more payment options, reduce pain points, and integrate checkout into the entire customer journey.
Cart Abandonment: What Gives?
Cart abandonment data is pretty scary: the average cart abandonment rate is a staggering 69 percent.
According to PYMNTS.com’s latest Checkout Conversion Index, it takes an average of 2 minutes and 39 seconds for consumers to checkout on an e-commerce site. That delay results in an estimated $236 billion in total sales revenue lost from checkout friction. Another leading reason? Too many clicks. The average e-commerce website forced shoppers to click roughly 23 times before completing their purchase.
The triggers for why shoppers ditch a product after it lands in their cart are fairly straightforward: additional unexpected costs, price, site delays and security fears. The common thread in each of those problems relates back to one key buzzword: friction. Whether it be friction experienced when encountering unexpected tax and shipping costs, how high an item is priced, how long it takes to checkout, or from lack of trust over website security measures, these are hurdles that shoppers are not keen to overcome.
Compared to the in-store experience, online shopping can be alienating. Methods for engaging customers are less obvious, and it’s easy for them to abandon their cart without much thought.
To understand why customers aren’t converting, you have to know what’s broken. It starts with identifying where pain points exist across the shopping experience. Perhaps your site takes too long to load, or adding items into the cart is too complicated. The process of navigating between products, cart, and payment may be too convoluted and difficult to figure out. Make customers frustrated, and you’re sure to lose them.
How to Reduce Cart Abandonment Rates
Consumers want to control – plain and simple. This includes how they navigate your site, add products to a cart, engage with checkout, and pay for their items. To give them the reigns, merchants should evaluate how and where payment and checkout technology can enhance the experience.
Cart abandonment is a $4.6 trillion problem that cuts deep into merchants’ bottom lines. Luckily, there is light at the end of the tunnel. Roughly $2.75 trillion in abandoned merchandise is actually recoverable revenue.
Merchants can strategically tackle these friction points by:
- Integrating financing as a part of a native payment experience
- Simplifying the navigation and checkout process
- Giving customers the option to checkout as a guest
- Allowing customers to add products to their cart without leaving the site/page
- Having clear buttons that direct customers to the checkout process
- Enabling one-click buying experiences for new and existing customers
Better technology enables more choices. With Klarna’s modern financing product, Installments, shoppers are given flexibility and control over how they want to pay. This includes allowing them to spread the costs of a purchase over time to reduce any apprehension they have about completing their checkout.
By providing a more innovative payment option with an integrated instant application process, merchants can keep customers on-site during the payment process. While some financing solutions direct shoppers to third-party sites, using a native checkout, guides the shopper toward the finish line in fewer steps.
The last step on the friction-free experience checklist is to make sure your payments partner can integrate into the customer journey, without altering your checkout flow. At Klarna, we say the less forms, the better, to avoid collecting unnecessary customer information that delays a purchase. Instead of requiring customers to fill out lengthy forms with an excessive amount of personal details and credit card numbers, ‘Installments’ delivers a better checkout experience and a smoother outcome.
Our own data shows this approach can decrease shopping cart conversion rates by as much as 26% when compared to other checkout solutions. The better the payment process, the less chance a customer will abandon their purchase.
How Mobile Impacts Cart Abandonment
Mobile, mobile, mobile. At least 57 percent of all online traffic comes from mobile devices. This has been and will continue to be, an evolving storyline for the e-commerce world.
Mobile continues to account for more and more online traffic, but merchants need to convert those browsers into buyers. More mobile traffic is a sign of the times. The problem is that shoppers still aren’t converting at the same rate on desktop and mobile.
Cue: optimizing the mobile-shopping experience. Shoppers are adapting to shopping on-the-go, and merchants are customizing their sites to meet this demand. This means pages should load even faster, and pages should be easy to navigate between.
Desktop e-commerce already has enough problems getting shoppers to convert, and those problems aren’t disappearing with mobile. Instead of simply optimizing a mobile site to deliver a desktop-like experience, merchants must leverage technologies that are unique to mobile to capture better customer engagement. Since screens are smaller, one feature that can be utilized are mobile checkout buttons that eliminate the need to enter payment credentials.
Outside of payment, merchants must focus on their mobile navigation features. Since it’s harder to navigate between pages on mobile, merchants must make the experience as seamless as possible. This can be achieved by reducing unnecessary clutter, integrating simple ways to add items to a cart, and easy ways to select different types of payment methods.
Instead of thinking about your desktop experience, your mobile site, your product pages, your payment options, and your checkout options as individual methods to driving conversions, they must be thought of as one, holistic conversion-driving unit.
With so much focus on delivering a better online experience, many merchants often forget how their efforts translate across all of their channels. If you deliver a killer desktop experience but fail to deliver a ubiquitous look and feel on mobile, your e-commerce conversion strategy will fall short.
Alleviating Cart Abandonment and Integrating Better Checkout Technology
To truly address cart abandonment, merchants must understand the necessary checkout technology available. With the right payments partner, merchants don’t have to think about the nuances of integration. Instead, they just have to determine how and where these systems fit into achieving their customer acquisition goals.
Forward-thinking merchants are no longer focused on if they need an online payment optimization strategy, they’re focused on how they can leverage that strategy to acquire customers and reduce cart abandonment rates.
Reaching conversion goals starts with finding a solution to reduce interruptions, deliver more payment options, and ease common pain points. Klarna’s payment solution checks these boxes by making the online shopping experience smoooth. That’s our mantra, and it should be yours too if you want to deliver the e-commerce interactions your digital-first customers expect today.
Interested in hearing about how we can make your life smooother? Let’s talk.