Online payment service, PayPal commissioned a survey (conducted by comScore) through its SMB merchant services division to find out why online shoppers are abandoning their carts. According to PayPal, the average cost of abandoned goods in U.S. shopping carts is $109—and that adds up to a lot of missed sales for online merchants.
The PayPal survey revealed that nearly half of online shoppers have abandoned their carts multiple times over a period of three weeks due to high shipping costs, security concerns and a lack of convenience during the check-out process.
The survey showed that high shipping cost was the largest single reason for cart abandonment. Additionally, the survey found that if merchants had provided shipping costs upfront, this might have caused 40 percent of participants to complete the purchase.
Eddie Davis, senior director of SMB merchant services says that it’s critical for merchants make the checkout experience easy and to make costs transparent in order to get shoppers to buy.
As a result of the survey findings, PayPal has launched a new Express Checkout feature – the PayPal Instant Update API. This new tool gives merchants cart functionality that ultimately encourages shoppers to purchase.
The PayPal Instant Update API helps merchants provide customers with the key shopping information they need upfront. By integrating the new API, merchants can show order details; including shipping options, insurance choices and tax totals, earlier in the check-out process.
In an Express Checkout, shoppers will still pay on your site; however, they don’t need to reenter shipping, billing, or payment information because the information is already available from PayPal. This lets merchants offer shoppers a more simplified and expedited checkout process while providing the buyer with the what they’re looking for– that is more detailed shipping, insurance, and tax information.
Shoppers WaryPayPal’s survey also indicated that the economy still has shoppers wary about clicking the purchase button. More than one-third of respondents abandoned checkout because they didn’t plan for all of the expenses; while more than 25 percent indicated they left the site to search for a coupon.
The good news for merchants is that one-third of shoppers said they later returned to the same site to buy. Another 20 percent of shoppers purchased the items at a brick and mortar store or on a competitor’s Web site.
To help merchants retain those potentially lost dollars in the dropped carts, Davis says that merchants need to remember the items that customers abandon, and make it easy for them to buy when they return.
He said, “Sweetening the deal with free shipping, coupons and special discounts is also a great way to encourage online shoppers to complete their purchases.”
More Reasons Why Shoppers AbandonPayPal’s cart abandonment study also revealed additional reasons why shoppers tend to drop their cart before making a purchase. According to the survey results, at least a fifth of all U.S. respondents cited the following as very important reasons for cart abandonment;
High shipping charges: 46 percent Wanted to comparison shop: 37 percent Lack of money: 36 percent Wanted to look for a coupon: 27 percent Wanted to shop offline: 26 percent Couldn’t find preferred pay option: 24 percent Item was unavailable at checkout: 23 percent Couldn’t find customer support: 22 percent Concerned about security of credit card data: 21 percentVangie Beal is a veteran online seller and frequent contributor to ECommerce-Guide.com. She is also managing editor of Webopedia.com. You can tweet with her online @AuroraGG.
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