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28 Jun 2017

No item left behind:

A solution to the problem of abandoned shopping carts

Have you ever seen someone abandon a full cart of shopping at the checkout counter in your local supermarket and leave without paying? Why is it that this hardly ever happens in a bricks-and-mortar store but online nearly 7 out of 10 carts are discarded?
Offline retailers do not experience the same headaches over abandoned shopping carts as they do online. But why is that? Is it because it would be embarrassing to leave a full shopping cart behind in the “real world” but nobody can see you online?

Perhaps that’s it, but what is certain is that abandoned shopping carts represent one of the biggest challenges online retailers face today, with a staggering 69.23% average abandonment rate (source: Baymard Institute).

A great deal of research has gone into studying the reasons for abandonment at checkout:

highest abandonment rate

A study of over 500 global brands during April, May and June 2016 reveals that the travel sector has the highest abandonment rate. Source: Salecycle.

Shopping-cart-abandonment-rates-on-2016-black-friday-cyber-monday-weekend copy

High levels of abandonment over Black Friday Weekend. This data is based on 50 million users tracked from November 25-28, 2016. Source: Barilliance.

Why do online shoppers abandon their carts?

There are many reasons for cart abandonment. Perhaps the customer uses the cart to calculate the total price of certain items. Maybe shipping was too expensive or unclear. An estimated 19% abandon their cart at checkout because they can’t use PayPal, while 30% cite the same reason with open invoice.

With mobile devices, the situation is even worse. Strong authentication on a small screen results in a terrible user experience. Regardless, mobile is becoming the new way to buy online, so retailers need to address clumsy customer experience or risk losing a large percentage of potential customers in an arena with a typically low conversion rate.

Arvato has a solution

As a Business Development Manager, my job involves looking at the everyday challenges customers face and understanding their online behaviour. Recently I was asked to speak at an e-commerce seminar here in Helsinki about the high rate of cart abandonment in Finland. I asked the following:

  • What patterns can we see in cart abandonment?
  • What’s the best way to get customers to complete their purchase?
  • How do you make paying as easy as possible?
  • How can you reuse existing solutions and relieve pressure on IT departments?

Our solution to this was originally developed for Halpa-Halli, one of Finland’s most popular online discount stores. The chain has 38 stores nationwide and around €300 million in turnover. They needed a payments solution that also boosted loyalty.

We created a white-label wallet for them that bridges the online and offline experience. Our solution allows customers to choose the items they want (instore or via the web shop) and then pay at their own convenience via monthly invoice. Halpa-Halli gets paid the next day.

Customers don’t have to fill in their personal information again and again, and a smoother payment process encourages more conversions at checkout.

Read the full Halpa-Halli customer case

What’s more, we can adapt the solution to specific clients or industries. For example, a public transport operator here in Finland offers bus passengers in 22 cities an AfterPay branded solution to pay for their fares monthly via invoice through Arvato. This is a great example of how a flexible payment provider can make life more convenient for customers and keep them coming back.

Download the Arvato Payments Review for more insights into consumer behaviour in Finland and 13 other key e-commerce markets.

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