Question

What Online Retailers will do to get you to click buy?
by: Charlie Wells
Dec 02, 2015

TOPICS: E-Commerce

SUMMARY: Retailers are trying to figure out how to get window shoppers to click 'buy' and make online purchases. There are several strategies. One is to follow shoppers around the web with ads for the products they abandoned. Emails are used to remind shoppers about what they left in their cart. Some stores use texts or push notifications. Leaving something in your cart might also result in the retailer pointing you to promotions or discounts. The percent of carts abandoned with something in them is high at 69%. Shoppers abandon items for many reasons. Shoppers jump around more with mobile phones. Unexpected costs, shipping or sales tax, lead to 33% of abandonments. Creating an account with a password and username results in 23% of abandoned carts and complicated checkouts is another 18%. Retailers are still figuring out how to follow customers across platforms and how best to get them to complete orders.

CLASSROOM APPLICATION: Online shopping made life easier in some ways and harder in others. It can be more difficult to develop a reasonable choice set when the choices seem endless. Shopping throughout the day on different devices can create challenges when sites don't make the process seamless. There are things retailers do that result in shoppers abandoning their cart. The added costs of shipping and taxes that don't show up until the end of the process are another cause of abandoned carts. Having to create an account to order or remember one already created is another cause of abandoned carts. Complicated checkouts add to the problem. Retailers are collecting and using data to encourage shoppers to return. Data is also used to study shopping habits based on how a customer comes from or what device they use. There is potential for sales revenue if retailers can figure out how to get shoppers to complete their order.

QUESTIONS:
1. Have you ever had ads follow you around or show up in your inbox as was described in the article? How did you feel about the experience? (or how would you feel if it did happen?)

2. List all the reasons why customers abandon items in carts without buying and identify the relative importance of each.

3. Review the methods retailers use to try and encourage shoppers to return to the carts they abandoned.

4. Evaluate the differences in shopper behavior based on the kind of device they are using, how they access a site and the kind of product they are purchasing.

Answer 1

1. Yes its true that we ocasionally see ads around us while we are surfing . Every social media site out there shows us ads, and there are many reasons you shouldn’t block them. But sometimes, those ads can get very specific towards you, often showing you ads that seem creepy and stalkerish. My experience says that they are important and helpful to us . Imagine you want to buy pair of shoes online you searched 2-3 social websites but at the end ur are't satisfied. After that while surfing on facebook ar checking your mailbox you can find ads related to the history you have searched upon and that might help you find a good pair of shoes.

2. Here are 10 of the most common reasons customers decide to abandon their online shopping carts and leave your online store without spending any money.

1. Annoyed at Complicated Checkout Process

The checkout process needs to be as simple, smooth and quick as possible. If you make the user fill out too many forms or perform too many complicated or repetitive actions, the impatient customer will abandon the cart and leave.

2. High Shipping Costs or Slow Shipping

People are not okay with paying high shipping rates. Most people buy online because they can get the goods delivered at their doorstep and get discount at the same time. But high shipping costs increase the price and take away their motivation. Also, online buyers are often buying goods on impulse – if they realize that it will take weeks for the product to reach them, they may look elsewhere.

3. Shipping Costs Listed Late

Most online sellers know that high shipping costs are a big no-no. So, they try and get the customers interested in a product. Once the customer has placed a product in the shopping cart, they slyly add the shipping cost to the total cost. Needless to say, customers hate this and they are quick to abandon the cart.

4. Forced to Register and Create an Account

Collecting client details is undoubtedly useful. The more information you have about a client, the better you can market – and deliver – your products to them. A registered user is more likely to visit the site again and develop loyalty. Ecommerce stores try to get this information by forcing the user to register with the website. Most people just want to buy and leave. Sites that do not allow the users to buy goods as guest visitors see a high rate of shopping cart abandonment.

5. Lack of Payment Options

There are dozens of different credit and debit card companies out there and there are several different methods that people can use to make online payments. Many customers want to buy products, but are forced to abandon the carts because the ecommerce website doesn’t make provisions for their particular preferred or available method of payment.

6. Unsure of Security Features

Most people are comfortable shopping on large and popular ecommerce websites, but when it comes to smaller, lesser known websites, they are afraid of phishing and other fraudulent activities. Many users bring their online shopping expedition to an abrupt end if they become unsure of the security features of an ecommerce store.

7. Coupon Codes and Promotional Offers

Savvy online buyers know that if they can get a discount coupon, they can save a lot of money. So, websites that have a coupon code button see a lot of shopping cart abandonment – the users go in search of the coupon code and come back only if they can find one.

8. Lack of Product Information

Some buyers are 100% sure of what they want to buy, while others expect to find product information and comparisons on the store. When they do not find enough information about the product, they decide not to buy, or continue their search to find information.

9. High Cost of Product

At times, there is nothing you can do: if the product is too costly for the users, they will not buy it. Also, if you are applying taxes to the products and driving up the price, the users may look elsewhere or consider buying it for less in a physical store.

10. Want to Look Around

Just as people in the physical world visit stores simply to check out stuff, online buyers also visit online stores to check out products and prices. These visitors do not intend to buy, and there is nothing you can do to stop them from abandoning the cart. But, they often do have the intention of buying at some time – by sending automated emails reminding them to buy the products, you can increase chances of conversions at a later point of time.

3 Here are our 13 favorite ways to reduce shopping cart abandonment

4     Stages in the Buying Process

• Establish and Build Trust in Your Transaction Forms

• Include a Progress Indicator on Checkout Pages

• Include Thumbnail Images of Products Throughout the Purchasing Phase

• Make Navigation Between Cart and Store Effortless

• Offer Multiple Payment Options

• Include a Strong Call to Action on Checkout Pages

• Make Saving Carts Effortless

• Offer Guest Checkout Options

• Offer a Bulletproof Money-Back Guarantee (or Other Assurances)

• Be Crystal-Clear About All Costs Upfront – ESPECIALLY Shipping

• Identify ‘Leaky’ Spots In Your Conversion Pathways

• Optimize Your Page Load Times

• Use Remarketing to Target Abandoners

Stage 1. Need Recognition

Perhaps you’re planning to backpack around the country after you graduate, but you don’t have a particularly good backpack. Marketers often try to stimulate consumers into realizing they have a need for a product. Do you think it’s a coincidence that Gatorade, Powerade, and other beverage makers locate their machines in gymnasiums so you see them after a long, tiring workout? Previews at movie theaters are another example. How many times have you have heard about a movie and had no interest in it—until you saw the preview? Afterward, you felt like had to see it.

Stage 2. Search for Information

Maybe you have owned several backpacks and know what you like and don’t like about them. Or, there might be a particular brand that you’ve purchased in the past that you liked and want to purchase in the future. This is a great position for the company that owns the brand to be in—something firms strive for. Why? Because it often means you will limit your search and simply buy their brand again.

If what you already know about backpacks doesn’t provide you with enough information, you’ll probably continue to gather information from various sources. Frequently people ask friends, family, and neighbors about their experiences with products. Magazines such as Consumer Reports or Backpacker Magazine might also help you.

Internet shopping sites such as Amazon.com have become a common source of information about products. Epinions.com is an example of consumer-generated review site. The site offers product ratings, buying tips, and price information. Amazon.com also offers product reviews written by consumers. People prefer “independent” sources such as this when they are looking for product information. However, they also often consult nonneutral sources of information, such advertisements, brochures, company Web sites, and salespeople.

Stage 3. Product Evaluation

Obviously, there are hundreds of different backpacks available to choose from. It’s not possible for you to examine all of them. (In fact, good salespeople and marketing professionals know that providing you with too many choices can be so overwhelming, you might not buy anything at all.) Consequently, you develop what’s called evaluative criteria to help you narrow down your choices.

Evaluative criteria are certain characteristics that are important to you such as the price of the backpack, the size, the number of compartments, and color. Some of these characteristics are more important than others. For example, the size of the backpack and the price might be more important to you than the color—unless, say, the color is hot pink and you hate pink.

Figure 3.3

Osprey backpacks are known for their durability. The company has a special design and quality control center, and Osprey’s salespeople annually take a “canyon testing” trip to see how well the company’s products perform.

© 2010 Jupiterimages Corporation

Marketing professionals want to convince you that the evaluative criteria you are considering reflect the strengths of their products. For example, you might not have thought about the weight or durability of the backpack you want to buy. However, a backpack manufacturer such as Osprey might remind you through magazine ads, packaging information, and its Web site that you should pay attention to these features—features that happen to be key selling points of its backpacks.

Stage 4. Product Choice and Purchase

Stage 4 is the point at which you decide what backpack to purchase. However, in addition to the backpack, you are probably also making other decisions at this stage, including where and how to purchase the backpack and on what terms. Maybe the backpack was cheaper at one store than another, but the salesperson there was rude. Or maybe you decide to order online because you’re too busy to go to the mall. Other decisions, particularly those related to big ticket items, are made at this point. If you’re buying a high-definition television, you might look for a store that will offer you credit or a warranty.

Stage 5. Postpurchase Use and Evaluation

At this point in the process you decide whether the backpack you purchased is everything it was cracked up to be. Hopefully it is. If it’s not, you’re likely to suffer what’s called postpurchase dissonance. You might call it buyer’s remorse. You want to feel good about your purchase, but you don’t. You begin to wonder whether you should have waited to get a better price, purchased something else, or gathered more information first. Consumers commonly feel this way, which is a problem for sellers. If you don’t feel good about what you’ve purchased from them, you might return the item and never purchase anything from them again. Or, worse yet, you might tell everyone you know how bad the product was.

Companies do various things to try to prevent buyer’s remorse. For smaller items, they might offer a money back guarantee. Or, they might encourage their salespeople to tell you what a great purchase you made. How many times have you heard a salesperson say, “That outfit looks so great on you!”? For larger items, companies might offer a warranty, along with instruction booklets, and a toll-free troubleshooting line to call. Or they might have a salesperson call you to see if you need help with product.

Stage 6. Disposal of the Product

There was a time when neither manufacturers nor consumers thought much about how products got disposed of, so long as people bought them. But that’s changed. How products are being disposed is becoming extremely important to consumers and society in general. Computers and batteries, which leech chemicals into landfills, are a huge problem. Consumers don’t want to degrade the environment if they don’t have to, and companies are becoming more aware of the fact.

Take for example, Crystal Light, a water-based beverage that’s sold in grocery stores. You can buy it in a bottle. However, many people buy a concentrated form of it, put it in reusable pitchers or bottles, and add water. That way, they don’t have to buy and dispose of plastic bottle after plastic bottle, damaging the environment in the process. Windex has done something similar with its window cleaner. Instead of buying new bottles of it all the time, you can purchase a concentrate and add water. You have probably noticed that most grocery stores now sell cloth bags consumers can reuse instead of continually using and discarding of new plastic or paper bags.

Other companies are less concerned about conservation than they are about planned obsolescence. Planned obsolescence is a deliberate effort by companies to make their products obsolete, or unusable, after a period of time. The goal is to improve a company’s sales by reducing the amount of time between the repeat purchases consumers make of products. When a software developer introduces a new version of product, older versions of it are usually designed to be incompatible with it. For example, not all the formatting features are the same in Microsoft Word 2003 and 2007. Sometimes documents do not translate properly when opened in the newer version. Consequently, you will be more inclined to upgrade to the new version so you can open all Word documents you receive.

Products that are disposable are another way in which firms have managed to reduce the amount of time between purchases. Disposable lighters are an example. Do you know anyone today that owns a nondisposable lighter? Believe it or not, prior to the 1960s, scarcely anyone could have imagined using a cheap disposable lighter. There are many more disposable products today than there were in years past—including everything from bottled water and individually wrapped snacks to single-use eye drops and cell phones.