In spite of an increasing trend in cross-border shopping, cart abandonment still bothers shop owners. It is costing retailers more than they expected and demands an immediate payment transformation.
E-commerce brands currently suffer $18 billion in yearly sales revenue misses because of cart abandonment, according to American market research company providing advice on existing and potential effects of technology Forrester. It projects $4 trillion in merchandise will be abandoned next year if the growing rate is ignored.
Billions of dollars in lost revenue are a result of an escalating cart abandonment frequency, customer data management company Amperity vice president of retail insights Jordan Elkind says. While e-commerce customers have created 46.8 percent more shopping baskets since the pandemic, the abandonment rate so far this year still rose to 94.4 percent from 85.1 percent in the comparable period last year, based on his company’s analysis. The growing rate is an urgent call by experts for the global e-commerce industry to clear out sales funnels from friction points that could lead to canceled check-outs.
One of the biggest reasons for cart abandonment is the complicated payment process. Because modern buyers are self-sufficient, experts said the majority of companies had put their concentration on frictionless experience by streamlining the checkout flow and design. Friction-free customer experiences with an accelerated payment journey and simplified processes contribute to better conversion rates. Baymard Institute in September found that checkout optimization could increase conversions by 35.26 percent. Providing multiple services, like digital wallets and installment packages, would prevent customers with various preferences from canceling their carts due to limited payment options.
The e-commerce intelligence Power Retail reported in August that around 36 percent of online shoppers use PayPal, 21 percent used debit cards and 14 percent use buy now pay later service. Given the variety of payment options, Splitit CEO Brad Paterson said that merchants with payment flexibility had a higher chance of repeat sales as shoppers tend to buy more when they can pay on their own terms.
Flexibility, like an instalment payment, is expected to be available from one in three e-commerce brands by the end of next year. Paterson said the best installment solution should be to keep consumers away from complex processes and harmful loans. The shifting consumer spending behaviors due to Covid-19 demands e-commerce adjusts to the ever-changing landscape and maintain positive sales.
Amazon Payments demonstrate that international customers could cost more as merchants have to cover cross-border fees and services provided for the cross-border transactions. Such expenses are usually translated into hidden fees like shipping costs applied to shoppers which is also another top reason customers abandon purchases, according to community blog Business 2 Community. Omitting these fees would jeopardize small businesses in particular. But being transparent with fees and shipping rates might mitigate the risk – as study by Scalefast shows more customers are willing to adjust their expectations. The study found that 45 percent of the poll was more patient of extended delivery timelines and 41 percent expected longer wait times.
But it doesn’t mean shop owners must put less focus on increasing credibility and standards, Scalefast CMO Oliver Schott said. Besides fortifying payment security, Schott suggests online customer acquisition needs to be reinforced because there was some percentage of customers who would check out before making purchases.
According to Sleeknote, getting back customers by retargeting ads can increase returns on investment of more than 1,300 percent. Remarketing to cart abandoners on Facebook and Google Display is a powerful strategy as both platforms reach 51 percent and 90 percent of all internet users respectively. Another way to regain customers is to establish automated abandonment email campaigns. An email campaign sent by default after an abandoned cart can optimize conversion rates, search engine optimization strategist at Digital Darts Emily Amor says.
Amor says: Since the growth of online shopping there have been many customers adding items to their carts out of impulsiveness. Personalized campaigns need to educate customer doubts and pique their interest with alternatives. Reducing cart abandonment rates – based on the latest consumer spending behavior is a crucial strategy to achieve higher sales, Buycology founder Christopher Gray says. Better understanding of shopper behaviour and payment market growth are keys to win back cart abandoners, Gray says.