Packing It In: Why Shopping Cart Abandonment Might Be Misleading

Shopping cart abandonment provides insight into the customer's current stage of the buying lifecycle, often reflecting the research process, not the definitive intent to purchase.

Traditionally, companies look upon online shopping cart abandonment as something negative. Such behaviors often reflect customer churn, leaving the potential sale incomplete. But as the online retail space continues to thrive, shopping cart abandonment doesn't always carry the negative sentiment it once did. Many businesses now choose to see the cart as half full, for this behavior often marks only one step in the customer journey, opening brands up to an array of opportunities to influence the purchase decision along the way.

For today's shopper, channels are just as abundant as products and services. Each channel plays a role in the research process, with the average shopper using Web and mobile resources to inform both their in-store and online purchases. According to a recent MyBuys study, 44 percent of respondents indicated that the main reason they leave a retailer's site without completing their purchase is because they are still in the research phase of their shopping experience, clearly indicating that this trend has become another step in the decision-making journey.

When consumers abandon their carts, they typically do so for one of three reasons:

  1. They are not yet ready to make the purchase, so they place the item(s) in their cart to save them for future reference.
  2. They are still in the research phase, using the Web as their source for competitive pricing comparisons.
  3. They realize that the shipping and handling costs are too high, causing them to abandon their cart deep into the checkout process.

As Larry Freed, president and CEO at ForeSee, highlights, cart abandonment isn't necessarily a bad thing. With the Web and mobile supplementing the in-store purchase process, many customers will put something in their shopping cart to save the item for future reference, and then complete their transaction on another device. They may begin their journey on their tablet, then go home and use their personal computer to complete the purchase. This conversion goes unnoticed, as the company cannot link the "abandoned" cart to the eventual transaction. The key for success lies in incentivizing customers to authenticate so they may link these steps to one single individual and gather more precise metrics that reflect the successful sale.

"About 50 percent of customers go online with the intent to research, while 30 to 40 percent go with the intent to purchase," Freed says. With this in mind, retailers must look beyond the multichannel experience as omnichannel takes precedence. "Brands must work together in unison to create an optimal customer experience. Customers want consistency across channels because they don't think of brand interactions in terms of channels, only as one experience."

Actions Speak Louder Than Words

Though Lori Mitchell-Keller may be retail principal at SAP, she's also a frequent Pottery Barn customer. Because she shops across all of Pottery Barn's brands, including its kids and teen imprints, she became a store credit card holder to accumulate points and receive discounts. Though storewide sales are rare, Mitchell-Keller places the products she eventually hopes to purchase in her cart for easy access.

"By putting items in my cart, I can keep an eye on them," she says. "The shopping cart almost acts like a wish list, where I store potential buys until I receive incentive to convert." She then looks to the emails she receives each day to find markdown announcements that pertain to her favorite products. Even the slightest discount-often just 10 percent off-persuades Mitchell-Keller to complete the transaction to ensure the right quantities and sizes are still available.

But, as Mitchell-Keller notes, Pottery Barn need not send irrelevant incentives in the interim. Instead, shopping cart abandonment offers retailers the unique opportunity to observe customers as they move through the purchase process. Companies can examine their current actions, monitor what customers have been viewing, explore the items in that individual's cart, and send out incentives that would encourage conversion. This newfound understanding of consumer buying behavior allows brands to harness information and turn data into actionable insight, thus changing buying behavior by capitalizing on present behavior.

According to Fifth Gear's recent "Online Orphans: The Rise of Shopping Cart Abandonment" infographic, 75 percent of customers who abandon their cart still intend to make the purchase, but as Phil Hollrah, senior director and head of product marketing at MyBuys, the challenge lies in establishing where each customer happens to be in the buying lifecycle so companies may helpfully nudge consumers toward the point of purchase.

"All consumers are unique with their own specific reasons for why they leave items in a shopping cart," Hollrah says. "For retailers to effectively combat the rate at which consumers abandon carts, they need to understand each consumer at an individual level."

Mitchell-Keller also notes that, while there's plenty of talk about retailers merging channels from an inventory and operations standpoint, they still lack understanding when it comes to comparing insight across channels.

"By understanding consumers at an individual level," Hollrah continues, "retailers can customize and personalize the shopping experience by presenting the products and offers most relevant to each consumer to help them get to a state in which they feel ready to make a purchase." By recognizing that each abandoned cart carries an opportunity to reengage and connect with customers that are likely to convert, brands can begin to strengthen relationships through their purposeful, relevant communications.