Strategies to Reduce Cart Abandonment in your Dropshipping Store
Dropship cart abandonment or abandoned dropshipping cart is a term used by eCommerce retailers for the phenomenon when a customer is adding items to the cart but leaves the page before completing the desired action, in this case checking their cart out and proceeding with the payment. Statistics show that the average cart abandonment rate across all industries was as high as 88.05% in 2020. This rate obviously varies between regions with Africa scoring the highest at 90.88% and Europe the lowest with 81.49%. If you are unaware of the dropship cart abandonment in your store you are potentially losing more money than you think.
In order to be able to avoid abandoned carts in your dropshipping store, you will first need to understand the reason behind this behavior. This article will give you an explanation of the most common reasons for customers to abandon a cart and guide you through the top reasons why online shoppers abandon carts and the best strategies to reduce your dropship cart abandonment rate.
Unexpected hidden costs
Hidden costs can be a primary reason for shoppers to abandon their carts in an online shop. These hidden costs can vary from the shipping cost, through VAT, and any other complementary costs they are required to pay. According to Statista, 41% of shoppers ended up abandoning their carts when the shipping cost was higher than they anticipated previously, making this the most common reason for dropship cart abandonment.
This is not an easy aspect to overcome as you have to compete with huge players like Amazon who are spoiling their customers with free shipping. As there must be someone who pays for the postage you have two options to go with. The first is to clearly state your shipping rates well before your customer gets to the very end of the ordering process. If they find your products unique enough and the additional costs are clearly communicated they will go through with the purchase. The second is the most widely used one as most products are easy to find substitutions for, so eCommerce retailers build the shipping cost into the pricing of their products. This way your customer will not end up having an extra cost added to their cart at the checkout and free shipping can be a big hook for all shoppers.
Mandatory user account
When it comes to shopping online, your customers expect it to be fast, straightforward, and it being as convenient as possible. If your website requires creating a mandatory user account in order for the customer to check their carts out, you are most likely to see a higher number of abandoned carts.
To avoid dropshipping cart abandonment you can introduce a “Checkout as a guest” option which allows them to go through the checkout process without creating a user account prior to it. It is understandable if you still want to get your customers to create a user account so you can better reach them in the future, but it should not disrupt the checkout process. Instead, offer them the option to create a user account once they have completed the purchase. It is even better if you use their previously provided shipping and billing information to autofill the corresponding cells that will speed up the account creation process.
Payment security concerns
Although paying through websites is becoming an increasing factor in our lives, some customers are still reluctant to give their credit card details away and pay through an online store as they perceive it as unsafe. When customers are concerned about the safety of your personal or credit card information for one reason or another, it tends to have a dramatic effect on their trust in your store and brand. So much so that according to surveys the reason for 20% of dropshipping cart abandonments is that the payment method they prefer was not offered on the website.
There are many ways you can show your customers that paying through your website is a secure process and build trust with safe payment options. First of all, you need to make sure that all transactions are secured with the SSL protocol that helps you encrypt all the information that is being entered on your website by customers. Secondly, make sure you process payments through a payment gateway that is PCI compliant and let your customers know about it. Finally, use 3D Secure (Three Domain Secure) which is a messaging protocol between three parties, namely the receiving and the issuing bank and the technology that processes the transaction. This way your customers will need to confirm the transaction with a generated code sent by their bank to add an extra layer of protection.
Lengthy checkout process
As previously mentioned, eCommerce customers value online channels mainly for their convenience. If you have a lengthy and confusing checkout process, they might not have the time or the mood to go through it, especially when they are on the go and attempting to purchase through a mobile device.
As mCommerce (Mobile Commerce) is projected to account for 72.9% of all eCommerce sales in 2021, it is highly important that you have a streamlined checkout process that is easy to go through on a mobile device as well. This can be supported by a website design that is mobile-friendly, making sure that the loading speed of your website is as fast as possible and eliminating any extra non-necessary steps from the process. Also, you can create a more visual experience throughout your checkout process by adding a progress bar to it so your customers can always see where they are at in the process.
Only researching a product
ECommerce shoppers are more likely to do in-depth research on the products they are planning to purchase compared to those who are buying from a brick-and-mortar business. This is due to the fact that eCommerce shoppers have better access to comparison sites such as Google Shopping, PriceGrabber, and Shopzilla. But on the other hand, they do not have the chance to physically evaluate the characteristics of the product they wish to purchase. For this reason, 29% of dropshipping cart abandonment is coming from the fact that the customer is only researching about the product or comparing prices with another store.
In this case, you should provide your customers with the option to save their cart for a later date to make it easier to return to the process if they find that your deal is providing the best value for their money. This might seem counterproductive but making the checkout process as fast as possible if they decide to return will eventually result in a purchase.
Unable to find the deal they came for
Another top reason for abandonment in the eCommerce sphere is the price sensitivity of the customer. There are many shoppers that are looking for a bargain and after the biggest discount, they can find online on a given product. They tend to look for discount codes or other means to lower the grand total of their cart and if it’s done unsuccessfully 18% of the time they are likely to abandon and purchase the product elsewhere.
When your customer is about to abandon their cart, having an exit-intent strategy in place can help you to add extra value to their purchase if they go through the checkout process. These can come in many shapes and forms of offers presented through a pop-up window. You can add a coupon code for them to apply to lower the total purchase amount, or include the shipping cost in the total cost of the product, and then offer them free shipping, or provide them with the chance to enter a prize draw if they order the goods in their carts. You can not only apply this strategy at the checkout but on any page or in circumstances when it shows that your customer has done further browsing about a product which potentially signals an intent to purchase. If your customers still decide to leave your page and abandon their cart, not all hope is lost yet. You can still use remarketing and approach them with a dropshipping cart abandonment email that offers them the same benefits as listed above.
Not having enough shipping options
Piers Steel, a professor at the University of Calgary Haskayne School explained in his book, The Procrastination Equation that 95% of us tend to procrastinate on occasions while 20% of the population are chronic offenders. Think about all those dates you have been putting off to purchase a gift for in time such as birthdays, anniversaries, or Christmas. Since most of us are in the same shoes, customers expect to be able to choose from different shipping options and methods and select the one that suits their timeline the most. When the estimated delivery time is too long 26% of customers tend to abandon a cart while 23% would abandon it if the product is not arriving in time.
While customers are not fond of paying for standard shipping, when it comes to Express shipping it is a whole new thing. A study shows that when customers are wishing to accelerate the delivery time in 65% of the cases they are willing to pay a premium for the faster shipping method. For this reason, make sure that your store always offers different shipping methods including standard and express in order to reduce dropshipping cart abandonment.
Out of stock items
There is a debate going on if it is beneficial for your eCommerce business to keep out-of-stock items displayed on your store’s page or remove them once they are sold out. There are pros and cons for both strategies but you have to be aware that 28% of dropshipping cart abandonments are a result of products being out of stock. One sold-out item can affect the whole checkout process and can result in abandoned carts with multiple products due to that one item not being available. On the other hand, showing a certain number of out-of-stock items can be beneficial to your business in many ways.
For example, when you are just starting out in the eCommerce market you might not have an excessive inventory yet. In this case, if you keep out-of-stock items in your shop even if they are not available, they will help to portray a much fuller collection. Moreover, if you show that an item was sold out you basically show to the new customers what previous ones bought, and this way you can more likely get them to act and proceed with a transaction. Also, you can re-use the pages where your out-of-stock items were published by transforming them into pages for collecting email addresses from potential customers and target them with promotion once the item is back in stock.
Dissatisfactory return policy
Customers are often only informed about return policies and warranties once they have added the products to their cart. The stricter the return policies are the less likely a customer will purchase from your store as a huge number of eCommerce purchases end up being returned for one reason or another. Hence, two-third of eCommerce shoppers say that they will more likely spend at stores where return policies are flexible.
To make your dropshipping return policy more appealing to your customers make sure that it is displayed in a visible section of your website, for example, the footer menu. Also, compose your return policy in line with your dropshipping supplier and in a way that is clear and straightforward to your customers what they should do in the case of receiving a product that is broken or faulty and in cases when they just wish to return it for other reasons. For example, if your dropshipping supplier’s return policy is 14 days you should add the same or stricter policy but never more than 14 days because you might cause yourself issues with your partner. You can also experiment with offering free returns and cover the costs toward your supplier yourself. This strategy would be highly appealing in the eyes of customers but do not forget to keep an eye on the effect it takes on your profit margin and keep track of your trials at all times.
To sum up
As you can see, there can be many reasons why dropshipping cart abandonment can occur in your shop. The best thing you can do as an entrepreneur is to try fixing all the initial problems you can do for free and then try to tap into the fields when you are providing your customer with further added value such as free shipping or return. This way you can first optimize your checkout process before sacrificing a percentage of your profit margin and keep track of the number of cart abandonments for future evaluation.