Why E-commerce Brands Struggle with Cart Abandonment? 7 Ways to Fix It
Just imagine you own a convenience or department store. You see visitors walking through the door and picking up shopping carts from the rack. They visit different aisles and stack their carts with their favourite products.
But here’s the twist! One by one, they go to the cash counter. Instead of waiting in the queue, a majority of them push their carts aside and quietly walk out of the store.
How would you feel? Bewildered? Anxious? Despair? Angry? Chances are, you may feel all of these at the same time! Thankfully, this doesn’t happen often in brick-and-mortar stores.
But it’s quite a different story for e-commerce websites! It’s not uncommon for online store owners to see a huge number of visitors as they check the live traffic on their e-commerce websites.
Some visitors browse products based on price range, discounts, brands, and more filters like that. Some of them end up adding some items to their cart. However, a majority of them abandon their carts and leave the website abruptly!
That’s the sad reality of the e-commerce sector and there are stats to prove it. As per a study by Baymard Institute, the average cart abandonment rate is 70 percent in the e-commerce sector.
At HoduSoft, we know the challenges e-commerce companies face due to cart abandonment and we have helped many of them fix the issues that lead to cart abandonment.
In this blog post, we will discuss why cart abandonment is such a huge problem for e-commerce companies, the common reasons behind cart abandonment, problems e-commerce companies face due to cart abandonment, and seven effective ways e-commerce companies can fix high cart abandonment rate.
If you own or hold a senior position in an e-commerce company, this blog is specifically for you! Now, let’s dive right in—enjoy the read and thank us later!
Common Reasons Behind Cart Abandonment
Some visitors to e-commerce websites may visit to compare prices. But the ones that add items to their shopping cart do so because they intend to buy. A majority of them don’t just leave because they find better deals elsewhere but due to some issues with the website or e-commerce companies’ policies. Here are some common reasons behind cart abandonment:
1. Miscommunication or Unclear Communication
Would you be surprised to know that most cart abandonment happens due to unclear communication or miscommunication? To answer the question just put yourself in the shoes of a customer who finds hidden charges and additional costs at the time of making payment.
That’s a perfect example of miscommunication. And unsurprisingly the Baymard Institute study finds it the most common reason behind cart abandonment. As per the study, 48 percent of visitors who abandoned their carts did so due to high extra costs in the form of delivery charge, taxes, and other fees.
2. Billing and Payment Issues
This is the second most common reason for cart abandonment. As per the Baymard Institute study, 21 percent of visitors who abandoned their carts did so as they couldn’t see or calculate total order cost up-front. This is a clear case of a billing issue. A good billing will show every detail upfront instead of forcing customers (or prospects) to calculate the amount by themselves.
Now coming to the payment part, 13 percent of respondents abandoned their carts because there weren’t enough payment methods and nine percent of them did so because their credit card declined.
3. Poor CX
For e-commerce companies, customer experience (CX) is everything! Depending on which study you believe in, more than three quarters of customers will abandon the brand they trusted after just two poor CX.
Just come to think of it, a majority of loyal customers wouldn’t hesitate to switch to a different brand after only a couple of poor experiences. What about those who are totally new to a website?
4. Complex Checkout Processes
The Baymard Institute study has revealed that 22 percent of visitors who abandoned their carts did so citing extremely long or complicated checkout processes.
Extremely simple and fast—that’s what the checkout process of every e-commerce company must be. Anything less than that can compel visitors to abandon their carts and leave the website to never return again!
5. Lack of Trust
It’s not uncommon for many new and smaller e-commerce companies to find that some of their prospects don’t trust them. It could be due to lack of proper communication or any other issue.
As per the above mentioned study, a quarter of the visitors who abandoned their carts did that because they couldn’t trust the site with their credit card information. Almost the same number of people said that they created an account because the site wanted them to do just that.
6. Miscellaneous Issues
Some visitors may also abandon their carts due to various other reasons such as:
- Slow delivery: 23 percent of visitors cited this as the reason.
- Unsatisfactory returns policy: 18 percent of visitors weren’t satisfied with the returns policy.
- Website issues: 17 percent of visitors left because the website had errors or crashed.
7. Difficulty with Password
Did you know that a sizable number of online shoppers abandon carts due to issues with their passwords? Strange but true!
A study conducted jointly by MasterCard and University of Oxford in 2017 found nearly one-third of people couldn’t make the purchases due to failure to remember their password.
Issues E-commerce Companies Face Due to Cart Abandonment
High cart abandonment has a devastating impact on e-commerce companies. Here are some issues e-commerce companies face owing to cart abandonment:
1. Lost Sales Revenue
When an e-commerce company loses 70 percent of its potential shoppers just as it’s about to make a sale, it’s hard to imagine the loss of sales revenue!
It’s much more painful than losing prospects who just visit a website and leave after navigating through a few pages. A study by Forrester Research revealed that cart abandonment leads to a loss of a whopping USD 18 billion in annual sales revenue!
2. Loss of Morale
“So near, yet so far.”
When an e-commerce company loses a majority of its visitors just a few clicks away from closing the deals, it has an extremely adverse effect on its morale. It feels like snatching defeat from the jaws of victory.
3. Customer Retention Challenges
When visitors abandon their carts due to miscommunication, poor CX, lack of trust, or any other major fault from the side of an e-commerce company, they are more likely to go for good.
Instead they will go to a different website or visit a brick-and-mortar store but they will never return.
4. Operational Strain
When an e-commerce company loses most of its visitors, it puts a huge strain on its operations. Strain would be a massive understatement. It can cause the e-commerce company to shut its website!
As Hungarian-American businessman and engineer Andrew S. Grove said, “Businesses fail either because they leave their customers or because their customers leave them!”
5. Increased Marketing Costs
When e-commerce companies witness a high cart abandonment rate, it has a direct impact on their marketing costs.
Let’s say an online retailer needs to sell a certain volume of its offerings but 70 percent or more of its customers leave without buying, it would need to spend more to attract a larger number of visitors to achieve its sales target.
6. Reduced Credibility
When visitors leave an e-commerce company’s website after facing one or multiple issues, their trust in the brand decreases.
It causes the credibility of the company to go down. As Warren G. Bennis rightly said, “Without credibility there is no trust.”
7. Limited Customer Insights
Just imagine you have two visitors on your website, one of them makes a purchase while the other leaves before buying. Which one would give you better insights? Without a doubt, the first one.
Online retailers have crucial information and transaction history of buyers, which enables them to upsell as well as tailor their offerings, deals, and communication. But they don’t have the same amount of information on visitors who abandon their carts.
Seven Ways to Fix Cart Abandonment Rate
When it comes to fixing cart abandonment rate, there are multiple strategies e-commerce companies can adopt and bring back lost customers. Here are some of those:
1. Focus on Clear and Streamlined Communication
As miscommunication and unclear communication is one of the biggest reasons for cart abandonment, you must focus on clear and streamlined communication. The best way to streamline communication is to invest in sophisticated communication tools such as an omnichannel CX suite that’s loaded with cutting-edge features.
During peak hours, e-commerce companies receive a huge volume of calls, chats, and messages over multiple channels. A huge chunk of the incoming communication is related to issues that could prevent cart abandonments.
E-commerce firms must equip their contact centers with the right tool such as an omnichannel contact center software solution to unify all interactions on a single platform. Our HoduCC omnichannel contact center software is one such useful tool that has helped many e-commerce companies of different sizes.
2. Offer Self-Service Options
A majority of people in today’s time attempt to resolve minor issues and queries by themselves before reaching out to a live representative. Depending on which study you believe in, two-thirds to more than three-fourths of respondents said that they would prefer to take care of minor issues themselves rather than speaking with a customer service agent. E-commerce companies must keep this in mind and offer plenty of self-service options to visitors and customers.
Offering AI-powered live chat is one of the best ways to help customers get answers to common queries instantly. Providing resources such as Frequently Asked Questions (FAQs) on the e-commerce website would be extremely useful. Leveraging multi-level Interactive Voice Response (IVR) systems would enable visitors and customers to get the right support as per their inputs.
An omnichannel CX suite such as HoduCC call and contact center software can prove to be extremely beneficial for e-commerce companies.
3. Use SMS, Messaging and Email Integration to Send Reminders
“You forgot something. Don’t worry, we have saved it for you.” This is an example of a reminder text message an e-commerce company can send to visitors who abandoned their cart. What’s the point, you ask? A reminder message or mail could be all that it takes to convert an abandoned cart into a sale.
By leveraging SMS, instant messaging, and email integration, e-commerce companies can convert many casual visitors into loyal customers! Speaking of SMS integration, it could be the key to send reminders at a massive scale! That’s because the average open rate for SMS is over 98 percent.
That’s not all. As per recent data, 91 percent of business owners and marketing managers say they see higher conversion rates with integrated marketing campaigns that include SMS. HoduCC call and contact center software come with Twilio, Telnyx, and Route Mobile SMS integration that could help e-commerce companies send bulk reminders.
4. Leverage AI to Bring Back Visitors
In the age of rapid evolution of Artificial Intelligence (AI), leveraging AI-powered tools can help e-commerce companies bring back visitors who abandoned their carts.
This is extremely effective as well as cost efficient as many AI tools are readily available for free or for a small premium, which can make a lot of difference to the way e-commerce companies approach their one-off visitors and erstwhile customers.
Noam Paransky, the chief omni and innovation officer at Tapestry, is one among many notable industry leaders who used AI successfully to leverage AI in the best possible manner. In his words, “We have seen both significant revenue growth as well as been able to create a unique experience in the shopping cart page through Persado’s Motivation AI technology.”
5. Use Retargeting Ads on Social Media or Search Engines
“Social media opens the floodgates to business owners to maximize their success.” The quote by award-winning thought leader and influencer Vladimer Botsvadze holds true for businesses seeking to win back visitors who left without making a purchase.
By leveraging the right omnichannel CX suite such as HoduCC call and contact center software, e-commerce companies can put retargeting ads on social media as well as search platforms and bring back visitors who abandoned their carts.
Moreover, retargeting ads work best when combined with data-driven insights. With HoduCC’s advanced analytics and customer interaction tracking, businesses can identify high-intent shoppers and customize ads based on their browsing behavior.
6. Take Care of Billing Issues
Noted author John Grisham’s bestselling novel ‘The Firm’ is replete with many quotable lines. One of those is so apt for the e-commerce industry. To paraphrase it, billing is the lifeblood of e-commerce companies. Everything revolves around it.
A majority of online shoppers want their invoices to be as uncomplicated and as clear as possible. Minor issues can drive them to abandon their carts. That’s why it’s extremely important for e-commerce companies to take care of their billing issues.
Implementing an advanced contact center solution like HoduCC can help e-commerce businesses resolve billing issues efficiently. With automated IVR and AI-powered chatbots, companies can quickly address customer queries related to payment failures, refunds, discounts, and invoice discrepancies.
7. Offer Multiple Payment Options
The lack of adequate payment options is a major deal breaker!
Online shoppers have diverse preferences. A single payment method may not cater to all. Providing a variety of payment methods and choices enhances customer satisfaction and convenience.
Apart from that, offering flexible payment options builds trust. It also encourages customers to come back and make repeat purchases due to ease of payment. That’s why e-commerce companies must offer multiple payment methods such as cash on delivery, internet banking, debit card, credit cards, UPIs, and more.
In Conclusion,
At a time when, on average, seven out of every ten visitors to e-commerce websites leave without making a purchase, it’s time for online stores to wake up and smell the proverbial coffee!
There’s no doubt that cart abandonment is a huge challenge for many e-commerce companies and it needs immediate action.
At HoduSoft, we know what it takes to bring down abandoned carts as well as bring back one-off visitors and convert them into loyal customers.
By using our HoduCC omnichannel CX suite, many e-commerce companies of various types and sizes not only reduced cart abandonment rate but streamlined their customer service operations.
If you are curious to know how our unified communication solutions can help your e-commerce business, contact our team of experts today and request a free demo.
