Member Article

How to reduce high checkout and abandonment rates

Abandonment rates in online retail are showing sluggish improvement but remain high according to the latest figures from IMRG, the UK’s industry association for online retail. Basket abandonment, where a visitor places an item in the basket but leaves the site without proceeding to the payment process, fell from 61% in 2010 to 60% in 2011 and 58% in 2012*.

Checkout abandonment, where a visitor has proceeded to the checkout but left before completing the purchase, fell from 34% in 2010 to 33% in 2011 and 32% in 2012. Although the annual trend is downward, in Q1 of 2013 it reached 37%, the highest it has been since IMRG and Capgemini started tracking it in Q1 of 2010.

What does this mean for retailers?

Well abandonment rates are one indicator of the confidence consumers have in a store. Though some abandonment is normal it can have an impact on the bottom line if a lot of products are being dropped right before purchase. These are customers who were literally about to complete a sale but for what ever reason didn’t feel comfortable enough to do so.

The good news is retailers can take some simple steps to reduce it, which we know can improve profits. As an industry we should all be aiming to deliver a fantastic service to consumers so reducing the complexity of payment processes or encouraging confidence through third party accreditation is vital.

Trusted Shops recommends these five tactics as cost effective first steps to retailers hoping to reduce basket abandonment:

Be clear about extra costs early in the purchase process – customers may be put off by charges only added on at the checkout, such as delivery costs or tax Make the purchase process simple. Aim to have as few pages as possible for the customer to navigate Display a third party accreditation so new customers know the transaction is guaranteed Develop a mobile site so consumers on different devices can still easily make purchases Offer multiple delivery and payment options – some customers prefer to use PayPal rather than a credit card for example

Andy Mulcahy, Head of Communications at IMRG: “The competition is so fierce online that a retailer has to really work to convince a visitor they are the brand to buy from. In addition, a customer may make several visits across a range of channels before arriving at a purchase decision. There are many factors that can influence someone’s decision to abandon a purchase, but on average the rates are likely to remain relatively high irrespective of work undertaken to reduce them; putting an item in a basket is a bit like virtually taking something off the shelf, it’s a central part of online browsing.”

* The figures are taken from the IMRG Capgemini Quarterly Benchmarking Index, an additional reporting tool that is open to all participants in the IMRG Capgemini e-Retail Sales Index. The Quarterly Index tracks over 40 key performance indicators across 7 categories, leading to unique insights into the performance of the UK e-retail sector.

This was posted in Bdaily's Members' News section by Jean-Marc Noel .