Shopping cart abandonment is the bane of digital commerce

Shopping cart abandonment is the bane of digital commerce. Every day, digital merchants are seeing money slip through their fingers because customers simply do not complete their purchase process. Right now, the global average rate for cart abandonment is 76% (1) . It’s a staggering figure.

Of course, this is not limited to digital commerce. If everyone who entered a brick-and-mortar shop bought something, shopkeepers might consider retiring early and the rest of us would have wardrobes the size of barns. People go into shops to browse, to see what’s new, to kill time or go just out of curiosity. Online shopping is no different.

The real issue is with people who have committed to making a purchase but change their minds, the consumers who have mentally already bought whatever it is the merchant is selling but are then presented with a barrier to purchasing it.

Recent research (2) has shown that, in brick-and-mortar stores, a third of customers will abandon their purchases if they have to wait more than five minutes in a queue and that nearly half would actively avoid that retailer in future.

What is causing the customer to give up the purchase is that they don’t want to have to wait to make their payment. If it takes too long to complete the process, they simply give up.

For the online experience, a 2014 study (3) showed 35% of cart abandonment is down to consumers having to take too long a time to complete their purchase. 23% gave up because they needed to create an account and 12% gave up because the payment process was complicated.

This is the online equivalent of standing in a queue. In the brick-and-mortar store, the customer is held up by other customers as he or she waits to make his payment. In the digital commerce environment, the customer is held up by forms to fill out and clunky payment processes.

The EBA guidelines on internet payment security, expected to be implemented on August 1st 2015, are going to make frictionless checkout even more of a challenge. Stronger authentication requirements will mean more security which could mean more barriers to swift payment. In short, longer queues.

Brick-and-mortar stores are always looking at ways to cut down the length of time their customers have to queue. Mobile point-of-sale devices, self-service tills, NFC card readers, staff on-hand to help the customer and so on. They are tackling this problem head on because they know that long queues turn away business.

The online merchant has to start thinking along the same lines. Brick-and-mortar stores are willing to invest in queue-busting technology because they know it is business critical to get waiting times down. It makes no sense that when retailers are pulling down payment barriers in-store, they are building them online.

The technology is there to help tackle online queues. The smart retailer needs to start investing in it.

1) Listrack, June 2015

2) Nomi, 2014

3) VWO ecommerce study, 2014

About David Poole

David’s career has spanned over 20 years at the forefront of new technology and payment processes. In previous roles he spearheaded the integration of electronic payments with custom POS solutions in hospitality and retail both in UK and the US. Prior to joining the myPINpad team in 2013 David held a MD position at a technology company, Miura, founded to reshape electronic payments. He oversaw the commercial success of the company during the 3 years he held this position.

About myPINpad

myPINpad is the world’s first consumer authentication company set to solve multi-channel and multi-factor security via cardholder PIN. It is the first anti-fraud technology adaptable to any consumer device. It not only helps reduce fraud and ID theft but also decreases merchants’ loses in ecommerce transactions, generated by system hacks and cart abandonment.