Mitigating the High Costs of Shopping Cart Abandonment

shopping cart

It happens regularly, and most of us have done it ourselves. A customer is on an ecommerce website, looking at various items, and adding some of them to their shopping cart. Then something happens during their experience, and they make the decision to abandon the website and its associated shopping cart, meaning that the brand lost both a sale and a potential customer.

According to a report from the Baymard Institute, shopping carts are abandoned an incredible 69.57% of the time! Shopping cart abandonment costs brands billions of dollars each year, and yet it can be avoided through usability studies, redesigns, and customer-centric ecommerce practices. This article will look at the various ways brands can avoid shopping cart abandonment and increase ROI by understanding the bottlenecks and pain points that are the leading causes of abandonment.

Top Reasons for Shopping Cart Abandonment

Deborah Goldring, associate professor of marketing at Stetson University’s School of Business Administration shared some of the reasons that customers abandon shopping carts. It’s important to understand that shopping cart abandonment isn’t always about the loss of a purchase. There is also the phenomenon of near-purchase activity, according to Goldring. “Customers use shopping carts as a shopping list and may save items for a later time. They use it for price and shipping comparisons. They may shop online and then purchase in-store,” she said.

Organizations that are successful at customer experience design can reduce shopping cart abandonment and encourage purchases. “Ecommerce sites with the highest conversion rates focus on providing a high level of information, enjoyment, sociability, and aesthetics,“ she said.

Is your shopping cart experience suffering from sub-optimal usability issues? This could be impacting your abandonment rate. Goldring advises that sellers do all they can to ensure they design a customer experience with easy-to-use shopping carts and smooth checkouts capabilities.

“One common usability flaw is to assume that the least number of steps to check out is better and will improve conversion rates. However, usability testing may uncover that for a significant group of customers, this is not the case. A complex check-out process that requires more information than merely an address and credit card number likely cannot be oversimplified into a ‘one-click’ type of check out process,” she said.

The Baymard Institute report indicated that 58.6% of online shoppers in the United States have abandoned a shopping cart within the last 3 months because they were “just browsing/not ready to buy.” Other reasons for abandonment include:

  • Extra costs were too high (shipping, taxes, fees) (50%)
  • The site wanted the customer to create an account (28%)
  • Too long/complicated checkout process (21%)
  • Couldn’t see/calculate total order cost upfront (18%)
  • Delivery time was too slow (18%)
  • Didn’t trust the site with credit card info (17%)
  • Website errors/crashed (13%)
  • Return policy was lacking (10%)
  • Not enough payment options (6%)
  • The credit card was declined (4%)

Related Article: Analyzing the Growth of the Ecommerce Subscription Model

The Shopping Cart Abandonment Rate Metric

One metric that brands should monitor is the cart

Shopping Center Operating Costs

When you efficiently manage a Shopping Center, the spending and operational costs have to be well under control. In this property market there are a number of pressures to balance as part of that property management process, and the spending will always be of great concern. It is very difficult to lease vacant premises to new tenants if the outgoings are excessive for a property of its type. The landlord will also have a lower net income if that is the case.

Most importantly the Shopping Center should be performing financially to standards which are at least equal to or better than any other competition properties in the area of ​​similar type and size. The standards should include key financial criteria such as:

  • Repairs and Maintenance costs
  • Insurances
  • Essential Maintenance Services
  • Income generation
  • Vacancy factor
  • Income growth
  • Sales MAT (Mean Average Turnover)
  • Sales per retailer type
  • Sales per shop size
  • Customer visits to the property
  • Council rates and other statutory costs

These figures should be managed and understood within the Shopping Center financial performance plan. To achieve this it is not uncommon for Shopping Center's to share some information and averages as part of market research into financial performance. If you cannot compare your property to something else then you will not know where it is headed and how it is performing.

It should be said that the history of your property over the last few years will always be useful as a benchmark in your property performance plan. As part of that historic analysis, you can split the outgoings between controllable items and uncontrollable items, and then track the escalations by income codes or types.

The uncontrollable items are those that are applied to the property and must be paid. Typically they are council rates, water rates, and land tax. The escalations in these items occur because of the uncontrollable policies and rating processes of the local councils. Usually they will base their rates and charges on the property value. It is not unusual for the councils to be valuing the local properties every two years for this purpose. Retail Center Managers know the high value of monitoring and disputing the property value when it comes through. You can save extensive operational costs and payments for rates and taxes if you get a realistic property value.

Cooperation between Center Managers is therefore common and quite productive given that the job and industry is just so special. Unskilled and ordinary property managers have little chance to improve and specialize without gaining experience from other established Retail Center Managers in this part of the property industry.

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