This holiday shopping season is going to be significantly different from previous years. Starting with Black Friday, which generally kicks off moments after families have gorged themselves on Thanksgiving turkey, consumers are going to hit the sales and get a jump on their Christmas shopping… but not in the way you might expect.
The COVID-19 pandemic has trained consumers into staying home and avoiding crowds as much as humanly possible. The traditional Black Friday scene of frenzied shoppers stampeding into Target and wrestling each other to get the last Barbie is definitely a thing of the past. Though brick-and-mortar retail will experience a spike in revenue thanks to the holiday season, it probably won't see the same rise in foot traffic that it's used to. E-commerce, on the other hand, will.
Experts foresee that consumers will do as much holiday shopping online as possible, which is great news for online retailers or any brick-and-mortar store that also has e-commerce. But just because COVID is keeping consumers at their computers, doesn't mean that your e-commerce store is guaranteed to see a healthy increase in holiday sales… not unless you do everything you can to attract shoppers to your site so that they aren't patronizing your competitors.
While e-commerce sales are a fast-growing corner of the retail industry, it should concern online retailers that the average abandon-rate of consumer online shopping carts is roughly 68.8%. In this article, we're going to identify why that is so that you, as an e-commerce retailer, can correct the pitfalls and retain the "nearly 70%" of sales that would otherwise be lost.
INCREASE ROX, I.E. RETURN ON EXPERIENCE
As a retailer and business owner, you're probably familiar with the acronym "ROI", which stands for "return on investment". Measuring the return on investment, or ROI, of any given business decision you've made is critical to the overall success of your efforts. A savvy retailer needs to know definitively if investing in their new digital signage, for example, has both saved them money in printing costs and increased their in-store sales thanks to the constant digital advertising they now have access to.
But focusing on the ROI means assessing the benefits to your business and bottom-line. We aren't suggesting you discontinue analyzing the ROI of your ventures, however it's important to also examine the other side of it--the consumer side--which is referred to as "ROX", or "return on experience".
Neglecting to evaluate your business's ROX is a contributing factor to overall lost sales, which is why we're addressing it first and foremost in this article. The area that ROX refers to is focused solely on your customers and their experience shopping at your store, whether in-store or online. If you can determine the level of current customer satisfaction with your brand, then you can devise strategies to scale an increase in positive consumer experience to boost revenue.
One of the most valuable facets of ROX comes with the convenience of e-commerce. In short, if your store isn't offering streamlined e-commerce and multiple platforms on which to purchase your brand's products, as well as accepting all possible digital payment methods, then you aren't providing consumers with the maximum ROX possible.
Here are the most valuable offerings that contribute the highest consumer ROX:
- • Providing e-commerce options, first and foremost, is imperative--the average consumer shops at least once a week online.
- • Including voice technology enhances a positive shopping experience and though only 9% of consumers use this technology, that percentage is expected to increase.
- • Online shoppers purchase products via their mobile smartphones far more often than they do when seated in front of their PC.
E-commerce retail sales will reach $4.13 trillion by the end of 2020, according to experts.
SELL VIA FACEBOOK & OTHER SOCIAL MEDIA PLATFORMS
When it comes to the youngest shopping generations with money to spend, social media is where it's at. Millennials and Gen Z-ers remain heavily influenced by social media. In fact, 55.2% of Gen Z (ages 14 - 24 years old) and 50.6% of Millennials (ages 25 - 34 years old) rely on social media posts, advertising, and influencers to point them in the right browsing direction when it comes to narrowing down what to buy.
This sustained trend could be why 1 in 4 companies focus on selling their items through Facebook, though they also have other e-commerce sites available to consumers. Because Facebook is heavily networked and interlinked, it's easy for a follower to "like" their friend's tee-shirt in one photo and five minutes later, be buying it on the retailers Facebook "store". Given that Facebook has acquired and now manages Instagram, we could see this level of convenience spill over to IG, which also has e-commerce capabilities.
Statistically speaking, retailers that include at least one social media account as part of their e-commerce sales options in addition to their online retail store make roughly 32% more overall sales than online retailers that haven't set up social media e-commerce. That's a significant increase in revenue that shouldn't be overlooked. There's an obvious correlation between younger generations using e-commerce more, comparatively, and if this swing continues, then it stands to reason that in the coming decades e-commerce could out-perform brick-and-mortar retail.
Online sales from e-commerce sites account for 14.1% of all retail sales worldwide, and that percentage is expected to rise to 22% by the year 2023.
FREE SHIPPING MAKES A MASSIVE DIFFERENCE
A survey of consumer online experience for a 6 month period revealed other reasons that shoppers abandon their online shopping carts at e-commerce retail sites. The following are those reasons with the percentage of shoppers who had that specific experience:
- • The estimated delivery date wasn't soon enough--44%
- • Needed same-day delivery--30%
- • Paid for expedited shipping--28%
- • Ordered items for same-day store delivery--21%
- • Abandoned order because delivery date was unclear--20%
When it comes to following through with an online purchase, the factors that play the largest role are competitive prices and free shipping, and the importance of these factors greatly increase during the holiday shopping season.
Let's take a serious look at e-commerce shopping cart abandonment so that you can avoid these pitfalls this holiday season. An eye-opening survey was conducted by The Baymard Institute and the result was that 39 common complaints were identified. The 2020 survey was comprised of 4,560 U.S.-based adult respondents. We've synthesized the complaints into corrective tips for you to be mindful of as you prepare your e-commerce stores for the upcoming holiday season:
REASONS FOR ABANDONING E-COMMERCE SHOPPING CARTS & TIPS TO FIX
- • Cumulative additional costs were too high--be mindful that shipping, handling, tax, and other fees don't turn into too high of a total. 50% of respondents did not go through with their online purchase for this reason. Keep additional consumer costs as low as possible to ensure customers follow through with their purchase.
- • Aversion to creating a new account--shoppers want to be able to move through the online buying process quickly and they will abandon their shopping cart if the website expects them to create a new account with all of their personal information. 21% of respondents complained of this. During the check-out procedure, only collect minimal information such as the email address to send the order confirmation and shipping tracking number.
- • Projected delivery date wasn't reasonable--18% of respondents didn't go through with their orders when they saw the delivery date was farther into the future than they thought reasonable. When it comes to the holiday season, delivering fast and on-time is imperative. As mentioned earlier in this article, shipping is the most important factor, second only to the quality and price of the products being sold. Do your research and negotiate with shipping companies so that you can offer the lowest shipping charges with the fastest delivery times possible.
- • Suspicious payment page--these days consumers are highly skeptical and on the lookout for identity theft scams, phishing attempts, and unsecure websites. It's no wonder that 17% of respondents who got a "bad feeling" about an e-commerce site felt compelled to abandon their online shopping carts. Don't cut corners when it comes to securing your online store, show SSL certificates, and offer many payment options including those that are already widely trusted such as PayPal. This is another great reason to focus on social media e-commerce because these platforms are already trusted by consumers.
If your e-commerce website loads slowly, consumers will be 75% more likely to abandon their online shopping carts and not go through with purchasing.
Though today there are only a little over 14% of retail sales occurring online in the e-commerce sphere, experts predict that by 2040 more than 95% of all purchases will be bought via online retailers. As this shift occurs, mobile commerce, i.e. buying from retailers using a smartphone, will cover more and more market share so that in 2021 as much as 72.9% of e-commerce transactions are completed with consumer mobile phones.
We're already seeing signs of this shift as more and more shoppers use convenience-based purchasing apps like Apple Pay and other "digital wallets", which are faster at checkout than using a traditional credit or debit card, and also far safer in terms of security, hacking, and identity theft. It's no wonder that retail has seen a recent spike in credit card payments. Cash is being phased out organically and the reason for that goes beyond convenience. The COVID-19 pandemic has strongly contributed to a worldwide aversion to cash in an effort to reduce the spread of virus and other hand-to-hand germs.
As we've gone over in this article, implementing e-commerce for the upcoming holiday season can only benefit your retail business given the current pandemic.
If you haven't set up e-commerce stores on your social media accounts like Facebook and Instagram, we've laid out the step-by-step How To in our article from earlier this year, How Small Businesses Can Stay Afloat During COVID-19. It's a great, simple-to-understand guide and we strongly recommend you reference it as you prepare your e-commerce sales channels for the upcoming holiday season.
For more information about marketing, advertising, and increasing brand awareness in the e-commerce and in-store retail industry, be sure to follow our blog at FasTrax. FasTrax offers solutions for POS, Digital Signage, Warehouse, MSP, AdPro, Loyalty, and Infotech, and our solutions specialists are always available to speak with you.