The 4 Trillion Dollar Question.

$4,000,000,000,000.00  The amount of money that online retailers loose ANNUALLY due to abandoned shopping carts!

But why?  Why do online consumers abandon shopping carts?

Satista did a study to find out the main reasons why consumers abandon shopping carts.

You guessed right!

“Shipping Costs are too high”.

The the human brain acts very weird when it comes to shipping prices.  eBay did a study, by monitoring sellers that offered free shipping and sellers that charged for shipping on identical items.  The findings were astonishing.  Consumers were 43% more likely to purchase from the seller who offered free shipping vs the competitor who charged for shipping but had the same end TOTAL price as the free shipping seller!

This tells alot about the psychology of the online shopper.  No matter how low or hight the price of an item the consumer wants “free shipping”.

 

Why consumers abandon online shopping carts.

Why consumers abandon online shopping carts.

But how do we lower shipping costs for buyers?

We often hear: “Our organization already has a tight profit margin and we cannot afford to offer cheaper shipping.  We will loose money if we offer free or low shipping”

What are some steps a retailer can take to prevent loosing customers at the checkout page?

  1. Incorporate a base shipping rate into the price of the item.  That way the shopper either gets free or discounted shipping prices at the shopping cart.
  2. Find an alternative shipping provider.  If you are shipping light weight items (under 13 ounces) USPS has great prices for First Class Mail Packages.
  3. If an alternative shipping provider is not a viable option, try working with your current carrier.  Tell them you need help, you are loose customer due to high shipping costs.
  4. Reach out to a 3rd party consultant.  (Doesn’t have to be us 🙂 Most organizations don’t realize the tremendous value a consultant can offer.
  5. Last and most importantly analyze shopping cart abandonment.  If you currently don’t have the technology then hire an IT team to enable that technology for your firm.
  6. Analyze data to see patterns and translate it into comprehendible language to study consumer shopping behaviors and take appropriate actions.