Just under a month ago, PayPal conducted a survey on the topic of cart abandonment and discussed the results in a live video stream. The results were quite interesting.
Let’s start at the beginning…
For those of you not versed in the vagaries of eCommerce, cart abandonment is that situation in which a customer chooses items, places them in the cart, and then disappears.
For the eCommerce merchant, this is an ongoing battle. Online sources, and they are varied (hence my lack of quotation), indicate this abandonment varies from 20% to 78% for the largest of merchants.
The question is “why”? What in the behaviour of the consumer causes this abandonment. And, perhaps more importantly, what can be done about it?
The PayPal stream, at time of presentation and this evening, is acting a bit funny (loading, stopping, re-loading, stopping again) and so I let my analysis of their findings sit as I couldn’t attend the original presentation. Should it decide to behave for you, the recording of the presentation can be found here.
Fortunately, smallbiztechnology.com covered the PayPal study in a blog post yesterday entitled 9 Reasons Why Customers Are Not Buying More From You Online. The list is as follows:
- 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
- Couldn’t find customer support: 22 percent
- Concerned about security of card data: 21 percent
One of these items, in particular, stood out to me. 24% of those surveyed indicated that they abandoned their cart due to the inability to “find preferred pay option.” 24%. Quite simply, this is lost revenue. Any abandonment is lost revenue…but this, in particular, is lost revenue that can be addressed.
If they “lack” money…there isn’t much as an eCommerce merchant or provider of eCommerce software that you can do. No money in bank, hopefully, indicates no purchase.
However, payment options are eminently addressable.
I’m sure that, for PayPal’s purpose, this indicates a need for integration of PayPal as tender. And rightly so…However, consumer payment preference spans a broad range of tenders. If you are a software company offering checkout software ensure that you are also offering the option to pay with Credit, ACH, and gift (when appropriate).
Increased conversion is increased revenue for the merchant.*
If you are building your eCommerce solution, evaluation providers, or exploring alternatives for online payment acceptance, ensure that the solution you adopt (or tools you use to integrate) offer a wide-range of easily acceptable payment modalities.
I would note that I would be interested in seeing greater detail on the methods which were employed in the study itself. What questions were used (are the above direct quotes)? Number of respondents? etc. However, the simple fact that almost 1/4 of customers who abandon do so due to the inability to pay with their favourite tender remains a compelling statistic.
What’s your perspective? Agree? Disagree? Anything to add? Critiques? The comment form is below…
* This is also true in the more traditional retail environment.
July 23, 2009