Can Price Be The Cart Abandonment Game Changer?

Shopping cart abandonment remains a major challenge for online retailers, but new research revealed that shipping costs and the overall cost of the order are two significant factors in the decision process to purchase or abandon.

In a Q4 2016 study from FuturePay, consumers were surveyed about the top reasons for making a decision to abandon their online shopping cart, and it was discovered that, for 86 percent of respondents, it was cost of shipping, while 72 percent noted an order being too expensive as their reason.

According to the research, other reasons included dealing with the “hassle of return,” “lack of payment options” and “security concerns.”

Last year, Business Insider’s analyst firm, BI Intelligence, studied the issue of shopping cart abandonment and tried to figure out why customers typically quit on the process.

What it found is that 46.1 percent of all cart abandonments occur at the payment stage; 37.4 percent occur at checkout login; 35.7 percent occur when the customer sees the actual shipping costs and then reconsiders; 20.9 percent occur when the customer has to enter their billing address; and 20 percent occur when the customer has to enter their shipping or delivery address.

In 2014 alone, about $4 trillion in merchandise was simply abandoned and never purchased in online shopping carts by consumers. Breaking that number down even further, the online shopping cart abandonment rate is 61 percent on desktop, 71 percent on tablets and 81 percent on mobile.

Think about that for a moment — a staggering 81 percent of customers who want to buy things on their mobile phone abandon that process at the checkout experience.

“Four of the top five reasons users are bailing out of the checkout process stem from the logistics of entering information through desktop or mobile. Only one reason, the shipping costs, actually had to do with price,” according to Business Insider. “This shows that eCommerce retailers are coming up short with regard to the checkout process. Lengthy or complicated checkout forms, such as entering shipping addresses or payment information, account for approximately 39 percent of U.S. cart abandonments.”



The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.

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