Counting abandoned shopping carts diverts e-tailers from real problems

[May 7th 2001]

Counting abandoned online shopping carts is an all-too-common -- and misleading -- method of evaluating the effectiveness of e-tail sites, according to a new white paper from Fry Multimedia, Inc. A more detailed analysis of the ways people use virtual carts, however, yields valuable insights for retail companies striving to improve their online merchandising.

In the paper "Don't Just Count Abandoned Shopping Carts, Peek Inside", authors Kara Heinrichs, Fry's chief customer experience officer, and Chris Grant, a senior data analyst, suggest richer metrics than the usual "percentage of shopping carts abandoned" to assess the performance of an online store. E-tailers will gain more important information if they focus on measures such as:

• How much time and how many visits most people need in order to commit to a purchase.

• To what degree visitors use the online store as a browsing and research forum that ultimately leads to a sale by the company at an offline store or from a catalog. [The paper points out that online sales are not the only way to measure a site's ROI.]

• The percentage of visitors who start a cart but never try to check out.

• How many of the visitors who start to check out actually complete the process.

"E-tailers tend to be obsessed with the proportion of online shopping carts that are abandoned and the resulting specter of lost sales," Heinrichs says. "We believe this focus is counter-productive and takes the e-tailer's attention away from measurements that can lead to real insights into online shopping behavior -- and real improvements in online merchandising."

The paper points out that:

• Contrary to current thinking, an abandoned online cart is not tantamount to a shopper deserting a full grocery cart while fourth in line to pay at the supermarket. Consumers often use carts to "mark" items of note, for example, much like dog-earing a page in a catalog, or taking a garment to a fitting room.

• Online shopping cart research can show retailers what merchandise is interesting to customers -- but not interesting enough to be purchased.

• Retailers can look at the ways consumers use online carts in order to determine how well their sites turn "interested" shoppers into purchasers.

• Looking at where in the checkout process carts are abandoned provides key insights for site and process improvement.

• "E-tailers' back-end systems reveal what consumers actually bought, but abandoned carts show what people wanted to buy but didn't," Heinrichs says. "That's intriguing - and valuable - information. Imagine the cross-sell, personalization and promotional possibilities this information can inspire."

Links
Fry Multimedia		http://www.frymulti.com