Abandoned online shopping carts: Why being cagey about pricing is harming your business
Monday, August 27, 2018/
Being cagey about your pricing doesn’t work.
This was the key message I took from a recent survey by SAP on how Australians shop online.
As many as six out of 10 Australians reported abandoning an online shopping cart when shipping costs were higher than expected. Approximately 46% left the cart after using the site for a price comparison and 32% terminated the transaction because stock was unavailable.
Retailers must address each of these issues. As for how? Here are my tips.
People hate paying for shipping — and hate being surprised by shopping costs even more.
If you charge shipping, that’s okay, but you have to be smart about how you represent it. List it on your homepage, ideally as a low-rate ‘flat’ cost, and consider creating a threshold at which customers qualify for free shipping. Why? It will increase shoppers’ propensity to buy more to avoid paying for something they don’t value. Failing that, provide a ‘shipping cost’ estimator before people get to the cart to ensure they know what they are signing up for.
Shipping also gives you another promotional lever. Similar to the mattress shop that delights a customer who is buying a $2000 bed by waiving a $50 delivery fee, consider running special ‘free delivery’ events to drive sales.
Price comparisons are a fact of life, so it’s up to you to present your product in such a way that its value seems undeniable. How? One way is to use numbers psychology to diminish the perception of cost. Consider:
- Whether to use rounded or specific numbers (for example, $20 or $19.95);
- The sequence of mark-downs (for example, ‘was $45 now $25’ or ‘now $25 was $45’);
- The size of the typeface you use (for example, whether the RRP of discounted prices should be larger); and
- Whether and how you should use dollar signs and decimals.
You can also use choice architecture to make some products look better than others, moving the customer’s focus from a comparison between competitors to a comparison within your range.
Further, consider how you describe your products. Focus on the benefits for them (the why) before the features (the how), and focus on what they get (the value) before the give (their money).
‘Out of stock’ happens, but that doesn’t mean you have to irritate your customer.
Include stock availability on the product page so they are aware of availability before they add the item to their cart. Leaving availability until the cart page means they have psychologically committed themselves to the purchase and will feel very let down by you.
It also doesn’t hurt to have messages like “only five left” to increase urgency to act due to scarcity.
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