February 18, 2020

As the new year gets underway, it seems sensible for each one of us to consider our priorities should be for 2020. If you are not involved in e-commerce, a priority in 2020 might reasonably be to establish a presence. The value of online retailing in Australia is estimated to hit $35.2 billion by 2021. If you are involved in e-commerce, it is highly likely that one of your priorities should be the reduction in your ‘abandonment rate’. While there is some variance by product category, abandonment rates are around 68%.

To be clear, this means that some 68% of all customers, or potential customers, who put goods in the shopping cart of a website, do not take the next step – push the button and make a purchase. After all the money spent on attracting customers to the site, stocking and maintaining the website, 68% go to buy – but don’t complete the purchase. Of-course consideration might also be given to those potential purchasers who don’t even get to put the item in the cart. 

Research suggests that the three primary reasons for a potential customer not even putting the product in the cart are:

  • The product they want is not available
  • The product available is not the right price
  • The delivery timeframe is not acceptable 

Research shows that Australian e-commerce sites are notorious for not having the product wanted, prices are all too often less than competitive and slow delivery is more the rule than the exception.

These reasons are perhaps not surprising. What might be surprising, however, are the reasons why so many potential customers put an item in the cart and then fail to make a purchase. Research suggests that in Australia he primary reasons for cart abandonment are:

  • High delivery costs (56%)
  • Inconvenient terms (80%)
  • The need to establish a user account (23%)

 High delivery costs are a real issue in Australia. Few retailers work hard enough to minimise the cost of delivery or offer a package that does not involve an additional delivery cost. Research by psychologist Dan Arely found that consumers resent paying for delivery seeing no utility in it. Indeed, it would seem that they would rather pay more for the product than pay for delivery – explaining why more and more businesses are offering free delivery – either outright or above a value of the purchase.

Inconvenient delivery terms reflect that Australian retailer past time of structuring arrangements to suit their needs or preferences rather than those of the customer. Consumers want fast delivery, and in most cases, five days is just too long! While Amazon is not growing in Australia as fast as some predicted its growth will continue and will be aided by rapid delivery times – often the same day in the cities. Same day delivery can be a significant and powerful competitive advantage in e-commerce

Setting up an account offers the customer no obvious benefit. Again, it is all about the needs of the retailer rather than the customer. I will not open an account to make a purchase, and in most cases where opening an account is suggested, I will not even take the time to see if there is an alternative. It is just too hard. Collecting an email address and following up to suggest opening an account might be a better approach.

Other strategies for reducing cart abandonment rates include:

  • Making it as easy as possible
  • Facilitating communication
  • Enhance trust 

The easier it is to make a purchase, the more likely it is to occur. Complex check out processes will reduce sales. This certainly includes offering a clearly labelled guest check out option.

An email facility or better still a staffed ‘chatbox’ facility enabling customers to ask questions, no matter how stupid they might be can be helpful.

The more a shopper trusts a site, the more likely they are to make a purchase. Factors that can enhance trust include a valid SSL certificate logo and a trusted transaction logo – like Pay Pal. 

Given the investment in attracting potential purchasers to your website, it is essential to get the abandonment rate as low as possible. It is certainly advisable to:

monitor traffic to your websites along with the customer journey through your site and the abandonment rate. This is arguably more important to maximise 

Take action to reduce the impact of the issues discussed above. So long as they are an issue, you will never maximise conversion rates.

It is interesting to note that worldwide Amazon has been very effective at reducing (though not eliminating) the impact of the issues cited above. This reflects the high-quality data it collects (most of which you too can gather) and the absolute customer focus, in the application of that data

In 2020 prioritise the reduction of abandonment shopping cart rates

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