Four trillion dollars worth of merchandise will be abandoned in online shopping carts this year. Four trillion. If you're an online-business owner, you're probably all too familiar with cart abandonment and the amount of unrealized revenue it represents. It might feel like $4 trillion to you alone.
Despite the introduction of several powerful tools to address cart abandonment, merchants at large are not yet taking advantage. In fact, cart abandonment is trending in the wrong direction: In 2011, 69 percent of carts were abandoned, followed by 72 percent in 2012, and 74 percent in 2013.
To be clear, there are a range of tools proven to drive incremental conversion among customers who have abandoned carts. Estimates based on real market impact of existing tools implies that 63 percent (or $2.52 trillion) of that $4 trillion in unrealized revenue is recoverable. This may sound too good to be true, but research supports a belief that the scale of the opportunity at hand may be even greater than what current tools have been able to demonstrate. Recent consumer research reveals that three quarters of shoppers who are abandoning carts plan on returning to the website or going in-store to complete their purchases.
How can you and your business recapture this value and complete the sale? Here are four tips to transform abandoned carts into real sales:
1. Simplify the checkout process.
In short: Keep it simple. If you put too many roadblocks in the way of checking out, customers will leave before completing a purchase. It's important to balance letting consumers easily add more items to their carts with a quick and easy checkout. Ask for as little new information as you need. The more screens, steps, form fields, and questions that customers face, the more likely they are to abandon a purchase.
Eliminating the need to enter credit card numbers and other payment information like shipping and billing addresses is perhaps the most powerfully proven way to improve conversions. The less data a customer needs to enter, the more likely he or she is to complete the purchase. Stored payment information is one reason that transactions processed through PayPal (where I work) have a 70 percent higher checkout conversion rate than credit card-only checkouts.
Simple calls-to-action that sidestep the clutter of some e-commerce experiences can further improve checkout yield. Prominent buttons (like "Add to Cart" or "Checkout") at the top and bottom of every page can drive both additional conversion and higher basket size. But make sure to test call-to-action buttons on your website--the location, color, and size of these buttons can have a big impact on conversions.
2. Consider consumer credit.
Offering financing options can go a long way toward helping customers complete a purchase. Retailers have long found that offering promo-period interest-free credit cards at the register spurs consumption and loyalty. The same is true with online options like PayPal Credit. Small businesses that placed PayPal Credit banner ads on their sites have reported increased sales by as much as 18 percent.
3. Retarget, retarget, retarget.
Don't be scared to follow up. Targeted emails from businesses following up on abandoned carts have extremely high open and click-through rates compared to standard marketing efforts. Try experimenting by pairing test emails with bundled offerings to incentivize customers to complete a larger transaction. Be careful not to over-rely on email for retargeting, though, as you want to cut through the noise of spammy emails. In addition to traditional marketing techniques to retarget (e.g., direct mail), more cutting-edge approaches like "display retargeting" are showing strong results. Early-adopting businesses are shifting marketing spend to agencies that can support these newer approaches.
4. Embrace omnichannel--now.
World-class merchants seamlessly interact with customers across online, in store, and via mobile--an "omnichannel" approach. Omnichannel interaction enables business owners to engage customers throughout their complex decision journey, in the places where consumers already are. And consumers are all over the place! Discovering products through mobile apps and social media, looking at products in stores and online, researching products in a store on their mobile phone, buying online and picking up in store, buying in store and shipping to their home … it sounds complicated, but the most innovative merchants make it feel effortless for the consumer.
The new reality is that consumers use these various "channels" without differentiating their needs or expectations across the channels, and they increasingly expect merchants to provide one shopping experience that operates in a connected way across all channels. Ask yourself the following question: When a potential customer abandons a cart online from your site, can that shopper pick back up where he or she left off from his or her mobile device? Can the online cart history translate to a faster and easier trying-and-buying experience in your store? If so, I'd be willing to bet you've seen material improvements in sales.
So what are you waiting for? Grab your slice of the $4 trillion pie.