GUEST COMMENT Cart abandonment: what are merchants getting wrong?
Every day ecommerce merchants see money slip through their fingers because customers simply do not complete their purchase process. BI Intelligence
[paywall] estimates that approximately £2.6 trillion worth of merchandise will be abandoned in online shopping carts this year, or in other words, 68.53% of all carts, according to Baymard Institute
. Nonetheless, an abandoned shopping cart does not automatically translate to a 'lost sale'. Let’s explore why.Statistia surveyed
shoppers from all around the globe to recognise the main reasons that led them to leave their shopping cart without making a purchase; 37% answered they were just browsing. The truth is, if everyone who entered a brick-and-mortar shop bought something, shopkeepers might consider retiring early and the rest of us would have wardrobes the size of barns to fit everything we bought from trips to the shopping centre. People go into shops to see what’s new, to kill time or just out of curiosity. Online shopping is no different, and retailers need to understand that.
More broadly, an abandoned shopping cart should be seen as part of the increasingly complex series of steps a consumer might take before finally making a purchase. It is also a strong indicator of consumer interest in a product or a brand. What should really worry merchants is why people who have made up their minds and committed to making a purchase then decide to leave. Why do they have a change of heart? What are the barriers that shoppers come across? Customers are giving up their purchase because of overly complicated and time consuming checkout processes. If it takes too long or the website fails to complete the order, people will simply give up. A 2014 study
showed that 35% of cart abandonment is caused by consumers having to take too long to complete their purchase. 23% relinquished because they needed to create an account and 12% abstained because the payment process was too complicated. Recent research
has shown that, in brick-and-mortar stores, a third of customers will abandon their purchase if they have to wait more than five minutes in a queue, and nearly half would actively avoid that retailer in future.
In the brick-and-mortar store, the customer is held up by other customers as he or she waits to make their payment. In the digital commerce environment, the customer is held up by forms to fill out and clunky payment processes, it’s not a question of other customers ahead of them. But it’s not just the quick and easy convenience that customers want. Shoppers will also leave their digital bags if they have any concerns about security.
We recently issued a whitepaper, Digital Payments – Bridging the gap between security and convenience
, where we looked in detail at the limitations of the current payments ecosystem. In it, we estimated that consumer concerns over payment security – either too much or too little – would cost the global economy $1.4tn in abandoned sales in 2015 (almost £1tn).
The whitepaper concluded that consumers want a standard consistent with that of a physical transaction; something that they can trust and easily use. If a payment method doesn’t appear trustworthy or is not consistent or is too complex, customers will simply abandon the process.
To reinforce this message, a YouGov poll from 2014
asked customers about their online shopping experiences . 69% agreed with the statement, “I am concerned about security when paying for goods/services online.” From the same survey, only 20% felt comfortable using their debit cards online.
These figures should make online retailers pay attention. Because no matter how hard they strive to make shopping experience online comfortable, swift and pleasant, the critical moment of entering personal and payment details can be so complex as to lead the customer to abandon the sale. If your customers are not able to acquire the items they want, the merchant is responsible.
In ecommerce, payment and authentication needs to be swift and seamless while still being secure. If not, consumers won’t be happy using merchant platforms. Being able to securely, consistently and conveniently authenticate the customer should be a priority. Yet the reality for many merchants is that it is not.
We know that merchants want something that can fit into existing systems with minimum fuss. There is no lack of technology preventing an easy, smooth and secure authentication and payment process but merchants need to recognise the urgency of the problem and act now to limit future lost profit.
We recognise and actively support new appropriate authentication techniques and foresee a blended multifactor approach. Particularly, we recommend PINs, which is a proven, tried and tested authentication asset, and something that shoppers already use in-store. It addresses what needs to be done to make online authentication and payment consistent, familiar and as simple as it is in-store. David Poole is director at myPINpad