Tips for Turning the Shopping Cart Into a Competitive Asset

An abandoned shopping cart means more than lost revenue. It's a missed opportunity to establish an ongoing customer relationship. Only 64 percent of shopping carts filled on an e-commerce site will ultimately result in a purchase, according to JupiterResearch. As an online merchant, retailers need to better retain those customers who are walking away and may never come back.

In the world of online retailing, all shopping carts are not created alike. Just as in a traditional brick-and-mortar retail store, where a cart with a squeaky, broken wheel can ruin the shopper's visit, the e-tailer's implementation of the shopping cart can itself make the difference between a purchase and a lost sale. Today's best practices in cart design remediate many of the little things that have historically killed an intended purchase. At the same time, the cart itself can also become a tool for building both the value of the sale, and the lifetime value of the relationship between retailer and customer.

Here are some important tips to consider in your efforts to turn the shopping cart into a competitive asset that drives more business in the short term; and builds stronger, more valuable customer relationships over the long term.

1.) Begin with the right mindset: Serving your customers better. The place to start is with your customers: understanding who they are, how they shop, what engages them, and what doesn't. While your focus might be on maximizing conversions in your Internet channel, realize that this is your goal, not your customers' goal. Your visitors see the Web as just part of their total retail experience: a great place to get information on products, scope out competitive prices, and read reviews from people who have experience with the product. Sure, they'll transact business using your Web site, but only if it's advantageous to do so versus their other options, like calling a catalog merchant or going to a competitor's site.

When working on ways to improve your Web sales results, it can be easy to start thinking of the customer as your research subject, a rat in a maze with a credit card. However, never lose sight of your real objective, which is to provide value to your customers, so you can increase sales and customer lifetime value. As you consider any change or enhancement to your site, the acid test must be, "Will the customer experience this as a benefit?" Sure you'd love to get personal information from every Web visitor the moment he shows up, but asking for personal information before the customer is ready to commit is a turnoff, and drives away business. To restate the old saw, the customer is always right about his experience with your company, and your job is to make sure that your site's experience is one that binds the customer to you.

Put another way, your customers want you to make Internet technology work for them, not against them. Help them discover new products, help them find great deals, help them take care of their gift shopping. The companies proven to generate the most loyal customers relentlessly focus on making the process more efficient for the shopper, on better informing the purchase decision, and on rewarding customers for their past purchasing behavior. They track the lifetime value and gross margin of customers, and view every interaction at every touchpoint as an opportunity to enhance the relationship, to provide a memorable, differentiated experience.

2. Recognize that an idle shopping cart may not be an abandoned one. A ScanAlert study found that 50 percent of Internet purchases are concluded more than an hour after the shopping cart was created. In the study, the average length of time-to-purchase varied widely, based on the type of product. Infant products, for example, had the shortest lag time, averaging just under nine hours. Luxury personal items, consumer electronics, and golf equipment were among the longest, averaging two to three days. Overall, one in seven Internet purchases (14 percent) took longer than a week to complete. The study suggested that comparison shopping was a primary reason for the variance.

This finding suggests two main conclusions. First, you need to carefully consider the metrics you use to manage your shopping cart abandonment. If you define an abandoned cart simply as a newly created cart that doesn't conclude in purchase during the original session, you may not be accurately measuring your sales performance. Information from your e-commerce system can give you insights into the various scenarios that typify your shoppers' behavior across different types of products. You can customize both your merchandising and your metrics to the specifics of the marketing situations you face. For example, the offer of a free gift 'if you order today' may prove to increase same-day purchases in categories where comparison shopping is not likely to yield huge cost savings to the customer.

Second, for most situations a persistent shopping cart is a wise approach. A persistent cart is one that a shopper creates in one Web session, and can then see again, intact, when she returns to your site. Generally, the shopper does not have to register to create the cart, and likewise does not have to log in to reopen the cart on a subsequent visit. A best practice is to explicitly inform the customer that the cart will be waiting for them when they come back, making clear that you welcome an ongoing relationship with the shopper.

3. Re-engage idle shoppers with e-mail. Personalized e-mails sent to customers that have initiated a now idle shopping cart are proven to be three times as effective at generating purchases than blind mass market e-mail campaigns. To be most successful, these e-mails need to be personal and well timed. Shoppers may be happy to receive a note from you saying, "For your convenience, these are the items you found interesting during your visit," listing the contents of the shopping cart. However, more aggressive e-mail offers that appear too quickly can make customers feel they are being watched, and for this reason JupiterResearch recommends retailers wait at least 24 hours to contact recent shoppers. Linking shopping behavior to customer databases can also enable retailers to perform highly effective 'special offer' campaigns via e-mail.

For example, shoppers who recently browsed holiday items could be motivated by special offers such as: "Save 10% if you buy by December 20th." The e-mails can also include personalized recommendations: "Shoppers like you were also interested in...Consider designing staged scenarios that escalate the offer over time. For instance, if the customer doesn't respond to an initial offer of a discount, a week later you could offer another incentive, such as free shipping. The scenario can then continue until the shopper is recaptured or at a specified point marked as 'lost,' meaning that resources will no longer be expended in attempting to recapture the shopper.

4. Make the cart work better for shoppers. Unnecessary clicks and page loads can make your site cumbersome to use. That's why the best e-tailers are moving away from page-based shopping carts to perpetual or floating ones, available onscreen no matter where the visitor travels on the site. In technical terms, this means moving beyond HTML as the platform for the shopping cart, instead using Adobe Flash and AJAX. The Diane von Furstenberg site ( www.dvf.com )includes a good example of a perpetual cart, available anywhere on the site via the main navigation bar.

There are a number of other ways that the shopping cart itself can be enhanced. More and more online retailers, like The Finish Line ( www.thefinishline.com ), are including thumbnail photos as each item is added to the cart, giving a crystal clear view of the order as it progresses, and helping assure the shopper that her order will be error-free. This simple step has demonstrated an increase in the number of shoppers converted into buyers by 10 percent.

One of the most frequent reasons for cart abandonment is that customers encounter unexpected shipping costs deep into the checkout process. Smart retailers are now displaying shipping costs and choices immediately as items are entered into the cart, avoiding sticker shock at checkout. Similarly, it's also wise to provide a running total of the cost of the sale. And don't take for granted that your shoppers know all your policies by heart: provide easy access to your purchase terms, payment types accepted, and return policies, from the cart. Stating your worry-free shopping and hacker-proof claims in the cart can also make a difference.

5. Let the cart do the selling. Another way the perpetual shopping cart can pay dividends is by using it dynamically during the visit to present conditional merchandising messages. Many online retailers use an offer of free shipping as an incentive to increase order size. While it's great to say, "Free shipping on orders over $100," an offer of this type can be especially powerful when presented dynamically during shopping: "Just $10 more, and your shipping is free." Amazon.com uses another conditional message to help create urgency for the purchaser: "To get this item by Tuesday, place your order within 2 hours and 10 minutes." Again, these approaches apply your Web merchandising strategy to increase perceived value to the customer, rather than coming across as purely profit-driven.

6. Use alternative shopping carts. Wish lists and gift lists are alternatives to the shopping cart that can help engage your customers. For shoppers, the distinction is clear: the shopping cart is what I'm actually planning to buy, while the wish list is something I love, but am not planning to buy right now. Unlike the shopping cart, the wish list can be shared with friends and family, timed to the individual's birthday or other gifting event (seea good example of a wish list on the Anthropologie Web site, www.anthropologie.com ). An additional value of the shared wish list, of course, is that it draws new customers to your site, as friends visit to explore what Suzy has placed on her list.

As with the idle shopping cart, items on the wish list can trigger staged e-mail marketing. For example, on the wish list you can include a "Tell me when this item goes on sale" check-box, which captures the 'shopper's e-mail address and gives you permission to send an e-mail promotion.

An emerging feature in Web retailing is the implementation of 'social shopping lists,' where shoppers can interact and see what others like them are interested in. This can be a great way to discover new products, while 'tagging' makes it easy for the visitor to check out another shopper's items without extensive searching.

7. Use the human touch to close Web sales. Nearly thirty percent of Web transactions reach a point where the shopper wants to speak to someone before she buys. She may want to clarify terms of an unclear policy, get a more accurate idea of an item's color, or address countless other issues. In these situations, Click to Chat and Click to Call can be great solutions. With Click to Call, the Web shopper enters her phone number on a pop-up form, and within moments her phone rings; a customer care agent is at her service. The consumer doesn't have to find the seller's phone number, navigate voice menus, or wait on hold for the next available representative. Click to Chat is a similar service that lets the shopper initiate a chat session with a live representative at any time. It provides much more immediate service than an e-mail query.

Jenny Craig ( www.jennycraig.com ) has used Click to Call with great success. In their implementation, visitors who selected click to call got a response within moments, first hearing the voice of Jenny Craig spokesperson Valerie Bertinelli, followed by a local representative. As a result, Jenny Craig has doubled conversions from the Web. Click to Call users are three times as likely to sign up for Jenny Craig's weight loss service as those who don't use Click to Call.

8. Simplify your checkout process. Online checkout is notorious for losing buyers. In addition to presenting unexpected shipping costs or other unwelcome surprises late in the process, the checkout process is often too complex on the back end. It integrates with so many back-end systems that performance can be too slow, or simply unreliable. How often have you personally found errors appearing during the checkout process, or been troubled by the warning, "Do not click Submit twice, or you will be charged twice for this order?" This does not inspire customer confidence.

Plus, moving through the various phases of shipping, delivery, and payment options can confuse shoppers, and they often need to review information they've already provided as they move through the process. A common design fault is to restrict a customer's ability to "go back" to forms they previously completed. Some sites let customers go back, but often the form data disappears, causing major frustration and risking abandonment. A satisfying cart and checkout-process design plays a critical role in eliminating these frustrations and potential abandonment points.

As stated earlier, it is particularly important to make your process as transparent as possible by presenting shipping costs and policies well before final checkout. But also, many companies are simplifying the mechanics of their checkout by moving toward a pageless checkout, integrated with the shopping cart.

9. Cross-sell and up-sell during checkout. Checkout can provide one of the best opportunities for adding sales to an order. You can remind the shopper of items he had viewed or, even better, present products clearly related to what the customer is already prepared to purchase. These can be afterthought items that are often forgotten during shopping; a good example is adding shoe polish to a footwear sale. Personalized recommendations can be even more powerful when used in the shopping cart than they are on your product pages. Relevance is the key to success in cross-selling and up-selling; because items placed in the shopping cart provide a strong picture of what the shopper actually wants, recommendations based on these items can be extremely powerful.

10. Accept additional forms of payment to reach new customers. As the Web becomes truly ubiquitous in society, more and more 'late adopters' are entering the world of online shopping. Online retailers almost invariably accept MasterCard and Visa, and many also accept American Express and Discover. While we may take for granted that everyone has these cards and is willing to use them on the Web, some of today's online shoppers are left out in the cold by this limited set of payment options. Many retailers are pleasantly surprised to find that adding a wider range of payment options can result in significant lifts in shopping cart conversion, and are particularly effective at bringing new customers into the fold. Research cited by PayPal suggests that adding up to four additional payment options can produce incremental sales. Other retailers are experimenting with a 'Bill me later' option, where the purchaser is sent an invoice rather than paying immediately during checkout.

11. Test constantly to discover what works best with your own customers. Sometimes small, unexpected tweaks can result in significant improvements in conversion rates. How small? A publisher tested this change on one of its offers: its primary option had a Submit button to click to order a subscription. They tested alternative wording on the button that said 'Click here to submit,' and included the VeriSign security logo on the page. This alternative delivered a 16 percent lift in subscription rates.

We recognize that decreasing the shopping cart abandonment rate is not a simple task. A
shopping cart 'just like a customer' often has a long and changing lifecycle. Identifying where in the process a particular cart is, understanding what is necessary to move it toward completion, and providing that impetus at just the right time requires insight, analysis, and automation.