Nov 19, 201813 min read

Why people don’t check out: 9 tips addressing abandoned carts.

by Klarna.com

Cart abandonment is a well-known phenomenon for online retailers worldwide, which means that your visitors add products to their shopping cart, but for some reason either abandon it before they enter the checkout or whilst at the checkout. In the physical world of retail, there’s nothing like this phenomenon, and it would create chaos in aisle and in queues if there was. But for some reason, the digital and physical worlds of retail differ massively when it comes to the checkout process. This means loss of sales, revenue and reduced conversion rate for you as an online retailers. However, while cart abandonment is a nuisance, it also offers great opportunities to understand your customers, learn from their behaviour and address the reasons why they leave. This in turn might do the opposite of cart abandonment, and increase sales, revenue, and your conversion.

Understanding why people abandon carts

Research carried out by institutes like Baynard and Forrester suggests that if you understand the triggers to cart abandonment, and improve your checkout design, you could increase conversion by approximately 35 percent. This is positive news, as cart abandonment is frustrating and rarely you will know the exact reasons why people abandon, unless the people abandoning take the time to tell you. When looking at abandonment rates and reasons, they differ widely between online retailers, but research carried out suggests that as many as 69 percent of people who place products in their cart will abandon at checkout. If you want to reduce your cart abandonment rate, and in turn increase conversion and add revenue to your business, you need to know the reasons why people abandon, in order to assess whether you need to change some of your online practices or not.

Triggers of cart abandonment

Often there’s a straightforward reason for a customer to abandon their cart. Some will add goods on a whim whilst ‘window shopping’, creating a sort of wish-list, because you don’t have that function on your website. Some will leave because they compared your products or prices to a competitor and felt more inclined to shop with them; and some will abandon the cart because there was too much friction when arriving at the checkout itself, such added extra fees and costs, a lengthy and complex checkout process, or because you didn’t appear to be trustworthy with sensitive information. And maybe they’ll come back, on another device, and the abandoned cart actually isn’t an abandoned cart.

Whilst it’s frustrating to not know the exact reason for the abandoned cart, a lot of research has been done to uncover the triggers of cart abandonment, and most research and experienced practitioners and e-commerce managers in the e-commerce industry will quote some or similar reasons that typically lead to cart abandonment for online retail:

  • Additional costs were too high (shipping, taxes, etc)
  • Customers being forced to create an account to checkout
  • The checkout process was too long and too complicated
  • Additional costs weren’t easily calculated or hidden
  • The website had errors or crashed
  • The customer didn’t trust the site with their card information
  • The product delivery options didn’t offer quick enough delivery
  • There weren’t enough payment methods
  • The customer’s card was declined

Minimising cart abandonment: what changes can be made?

So where does this leave you? It leaves you with an opportunity to reduce your cart abandonment, and in turn increase sales/revenue/conversion rate or a combination of several. While you’re inevitably going to lose some customers before the checkout stage, such staggeringly high levels of cart abandonment suggest that you should look again at your website and checkout procedures, and assess whether your customers might abandon cart because of the reasons mentioned previously. If you’re already set and feel comfortable that you have an optimal setup, good for you; if not, a few simple changes to simplify and streamline your checkout can make a big difference.

1. Review additional costs in the checkout

Recent surveys and studies suggest that the top reason for cart abandonment is that additional costs like shipping, tax and other fees are too high. While you can’t affect the tax imposed on a purchase, you can affect the shipping and service fee. You might think that free shipping is not for you, because you can’t afford it, but you should look into the benefits and disadvantages before you make up your mind, and thoroughly calculate costs vs revenue. While free shipping will cut into your margins, research suggests that free shipping increases average order value and improves your conversion rate, suggesting that this will cover the profits you lose. If you do your research and realise that free shipping will cost you more than you gain, you could try one of these suggestions:

  • Cover the shipping cost by increasing your prices on products, so that your customers carry the shipping cost
  • Increase prices slightly, and then take out the rest of the cost from your own margins
  • Induce a clause saying that free shipping is available when buying for or above a certain amount

The same goes for a service fee. Offer a service fee that is optional, and that represents added value to the purchase, such as gift wrapping or customization of the product or service, and if you feel that an added service fee is a great revenue, maybe you should rethink your pricing setup?

And, in the end, if you know that free shipping or no service fee is not for you, try to make it transparent when your customers shop, by showing it in the cart if possible.

2. Offer a guest checkout option

Being forced to create an account to checkout is another trigger of cart abandonment, and in the top-3 list of triggers from most research studies published in recent years. The whole process of creating an account often entails coming up with a user name. At best shoppers can use their e-mail address, but at times personal details are required, and maybe phone number, a delivery address, and then they’re forced to create a password that should include big letters, small letters, odd signs and maybe even a number too. Even though this might not apply to your setup, and you only require an e-mail address and a password to be created, don’t underestimate the associations people have with account creation, and how that will affect how they view the statement “you need to create an account and sign in in order to finalise your purchase”. And let’s not get into it if the account needs to be activated beforehand. It’s just another layer of added friction, with yet another sign-in to the e-mail account to click a link, and then potentially having to sign in while in the checkout…

If you don’t have a guest checkout option today, it might be worth looking into. However, every website is different, and you need to assess the need for account creation pre-purchase. At times, for certain reasons, maybe creating an account or logging in is necessary in order to restrict access or offer member-only benefits. You might have a service that can’t be used until your customers log in, but then it might be worth thinking about separating account creation and finalising an actual purchase. In whichever case: offer a guest checkout as an option, if it’s not business critical for customers to create an account. No one says that you can’t offer both if applicable.

3. Simplify the checkout process

A checkout process that is lengthy, complex and requires too much effort is another reason for abandoned carts. While this could relate to the friction of having to create an account before finalising the purchase, it could also relate to having too many steps in the checkout process, too many fields to fill out, or too much data to provide. Reducing the number of steps the customer goes through can be an easy fix, if you know what data you need to process the purchase and payment.

In order to address this issue, it’s time to take a hard and critical look at your checkout process once and for all. What data do you actually need in order to process the purchase? At this point, there might be a trade-off between the data you want to source, in order to profile your customers, and the data they want to give away and perceive relevant for the purchase. While delivery address seems critical in order to deliver a physical product, maybe it’s not as necessary if you’re delivering an online subscription service. And maybe you don’t actually need marital status or a gender. Or maybe you do! Point is: it’s all a matter of sanity checking and editing, in order to only ask for what you actually need.

4. Make it easy to see and calculate costs in the cart

When it comes to cost calculations, not being able to calculate the total order value is another reason for abandoning one’s cart. Often this comes down to added costs, such as shipping and taxes, being hidden away and not visible in the cart and during the actual shopping process. When the customer enters the checkout, and sees the added costs for the first time, the added cost might be enough to feel that it’s not worth the extra money to buy, and you risk losing a customer to competitors that offer better deals. So make it transparent for your customers what costs will be added to the purchase, while the customer browses and adds products to the cart.

5. Optimise your website for several devices

Another issue leading to cart abandonment is that your website is sub-optimal for the device the customer shops on, that there is a compatibility problem with some browsers, or that you suffered technical glitches that made the website crash. Test your website with as many different devices as possible, and run usability tests on computers too.

6. Offer proof of security

As cards are often connected to a credit amount, or directly to one’s bank account, it’s easy to understand why some shoppers don’t give away their card details easily. And for good reasons. Corrupt companies exist, that cheat people of their card data and then use those details to make purchases the shopper might be unaware of, and even those companies that have the customers’ best at heart, can lose payment data through hacker attacks or human error. In the Baynard Institute study, 18 percent of shoppers abandon their cart because they don’t trust the website with their card details.

7. Offer attractive delivery options

It’s difficult to directly affect delivery times, because often it’s not up to you to decide how long a shipment provider takes to delivery. From a shopper perspective, the post-purchase experience goes hand in hand with the buying experience on your website, and consumers of today tend to expect quicker delivery, and same-day shipment (which in turn is affected by whether or not your organisation can package the same day that an order is received).

The option that you do have is to switch delivery method or provider, which you might not want to do or feel comfortable with. In such a case, you need to weigh in several factors such and what types of products you sell, and thus what types of packages you’ll send – big, medium, small, letter sizes, heavy weight, light weight etc – and other factors like whether you need to ship worldwide or domestically, which departing country you operate in and whether customers should be able to track their parcels, insurance etc.

8. Offer several payment methods in the checkout

Not offering enough payment options might seem like a silly reason to abandon cart, but about 8 percent of people in the Baynard Study said that the limited choice of payment methods made them abandon their cart. In truth, many online shoppers have preferred payment methods or options they want to pay by when shopping online, either because they’ve always done so, because they feel that it’s a safe option that they trust, or because they have used these methods before and have been happy with the experience.