IF YOU WANT YOUR CUSTOMERS’ MONEY, MAKE IT EASIER FOR THEM TO GIVE IT TO YOU.
It’s an exciting time to be in e-commerce. In Q2 this year, Amazon’s revenue climbed 31 per cent to US$30.4 billion (S$40.8 billion), Shopify’s by 93 per cent to US$86.6 billion; and numerous brands are either looking into or expanding their online business models.
But online retailers should also be aware of this sobering statistic: the digital shopping cart abandonment rate is at 74.3 per cent worldwide according to SaleCycle. BI Intelligence estimates that about US$4 trillion worth of merchandise was lost in abandoned carts in 2014. “More than 50 per cent of online transactions happen on mobile, and some websites may not be optimised for mobile devices,” offers Ooi Huey Tyng, country manager for Visa Singapore and Brunei. Obvious deterrents to following through include hidden costs and delivery fees, but there are nonmonetary reasons for abandonment as well. “You have to trust a site before you give it personal details, and there are people who won’t be comfortable (with that),” Ooi says. “The process of inputting details like addresses over and over again will put some people off.”
To streamline the process, Ooi recommends partnering with a bank that offers one-click checkouts. “Visa Checkout, for instance, adds a certain credibility, and customers only need to register once. Customers won’t be storing sensitive information with the stores, and store owners don’t need to invest time and money to figure it out themselves.” Visa Checkout was finally made available in Singapore less than a year ago, following MasterCard’s similar MasterPass service two years back. Third-party e-commerce payment processing website PayPal has also become a trusted name that protects both buyers and sellers, and safeguards confidential information.
All is not lost if the cart is abandoned. “Retailers can send followup e-mails that suggest alternative products based on the ones that were left in the cart, or even ask for feedback. Current technology even allows retailers to track the precise point at which consumers drop out, but that requires an investment smaller sites may not be able to afford.”
It matters less which measure retailers take than them taking one at all. “If consumers have a bad experience, not only will they not go through with the purchase, they may not return at all,” Ooi advises. “So this has implications on future business as well.”