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E-consultancy this week publishes its Online Retail Checkout Special Report, a must-read for e-commerce site owners who want to understand how they can reduce abandonment rates.

Here, Dr Mike Baxter, the author, talks about some of the key issues and problem areas associated with checkouts - and some of the 'quick wins' for etailers.

Why did you focus on checkout design and processes for our annual Online Retail report?

The obvious answer is that there is a huge need for information and advice about improving checkout. E-commerce sites are losing roughly half their customers through basket and checkout abandonment.

Retailers recognise the problem – they just struggle to know how to fix it. Which brings me to our second reason for looking at checkout. In both our consultancy and our benchmarking research, we’ve found checkout a real challenge. We could see lots of specific things wrong with checkout but always felt the ‘big picture’ was missing.

Is there an inherent logic behind the checkout process? How do the elements of checkout relate to the whole process? How do the customer’s interests relate to / conflict with the retailers’ and how do we reconcile them?

And what exactly is it that goes so badly wrong in checkout to make half the customers walk away? So we thought we would take a step back from the detail and try to provide some more strategic thinking about the checkout process and how it relates to the entire customer journey.

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People often quote dreadful checkout abandonment rates: is it really that bad? 

In general, yes it is! We quote two survey results from 2006 in the report: they found 46% and 60% abandonment rates respectively. Now, these covered abandonment from both the basket and checkout but earlier surveys have suggested that most of this (between two thirds and four fifths) is during checkout.

Interestingly, one of the surveys also gave a breakdown in the range of abandonment rates. Some retailers report as little as 10% abandonment, whereas others report more than 80%. This probably reflects differences in underlying factors such as: brand loyalty, time invested in making the purchasing choice, availability of alternative suppliers etc.

The key conclusion, however, is that a 50% abandonment rate is not simply something you have to live with. It can be significantly reduced. Case studies suggest a 10-15% reduction can be achieved through redesign, split-testing or a combination of the two.

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Why do customers commonly drop out of the purchase process? Actually, this question assumes they are ‘in’ the purchase process – that’s part of the problem isn’t it? 
 
Customers appear to have a clear distinction in their mind between shopping and buying. On the one hand they need to find out what is available, how the different alternative products compare and what different retailers are offering in terms of price, delivery, store pick-up etc.

This is shopping and it is different from buying: in the customer's mind buying is the bit that happens after the shopping decision is made. "I've decided what I want, now let me pay for it and get hold of it!"

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A key section of the report examines the difference between purchase proposition and transaction. This seems to be confusing many e-commerce firms judging by their websites, right?

This was one of the biggest surprises from our research. On the face of it, e-commerce sites seem well designed to meet the distinct shopping and buying needs of the customer.

During the shopping phase, they can search, browse and compare products, then once they've decided what to buy they can add-to-basket and checkout. When we dug a little deeper, however, it became clear that retailers are not making a clear enough distinction between the 'proposition' - what exactly is the full offer to the customer - and the transaction - the completion of the sale.

This forces the customer to start the checkout process to discover details of the proposition - is the product in stock, when will it be delivered, can I pay by PayPal?  In the report we make 32 recommendations on how the proposition should be made clear to the customer on the category, product and basket pages. On average the top UK retailers failed to comply with half of them.

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What are the common mistakes you’re seeing in this area?

Incomplete delivery details continue to cause the most widespread problems. Knowing when your purchase will arrive and what the total cost is (including delivery) is such a fundamental part of the purchase proposition that it should be prominently shown on the basket page (if not before).

This sort if information should never be buried in a delivery terms and conditions page accessed by a tiny link in a page footer! For many online customers, specific delivery conditions are a critical part of the proposition (can timed or evening/weekend delivery be arranged, is there a guaranteed latest delivery date e.g. for a birthday or anniversary?).

Of the 12 top UK retail sites we benchmarked, only two passed the requirement for delivery date/period to be shown clearly in the basket page.

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The report has a section on basket design – can you provide an overview of the key problem areas?

Again it’s a question of ensuring that all elements of the purchase proposition have been made by the time the customer hits the ‘go to checkout’ button. We have suggested 20 items that should be included on the basket page to fully describe the product, price, delivery, payment and registration propositions.

In addition to this there are some pretty simple ways to fix some frustrating usability problems, such as giving customers options to navigate away from the basket, and ensuring that the positioning and format of controls are both clear and intuitive.

We are also seeing increasing use of mini-baskets, and while they can be used to great effect, either with or without a link to a full-page basket, they can create their own usability problems, such as allowing customers to see when and what they have added to their basket – a problem that can be overcome with the creative use of transitional effects.

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This report includes ten pages of design patterns, to help steer e-commerce companies towards best practice, and lower abandonment rates. Can you sum up the thinking here?

We hope that when a retailer has the opportunity to undertake a complete re-design of their site, they will take the time to read the whole report and think strategically about how checkout fits into the entire customer experience.

We are also very aware that many retailers, however, are forced to take smaller bites at improving their checkout and hence need more of checklist of things to consider.  So, our design patterns give a checklist of ‘what’ to consider when reviewing or re-designing the checkout.

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What represents the lowest hanging fruit in terms of quick fixes?

The fruitiest, although perhaps not the lowest hanging is to start online split testing elements of your checkout process. Anyone who has been within earshot of me for the past few months will probably have heard me predicting huge performance differences between e-commerce sites that split test compared to those that don’t.

The checkout is a no-brainer when it comes to split-testing: think of ways you might be able to change the checkout process and split-test it to see if the effect is significant. After the first improvement, split-test again and again until you exhaust all your ideas for improvement – by which time you will probably have knocked at least 10% off your checkout conversion losses.

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We hosted a roundtable to discuss the findings of the research. What kind of feedback did you get?

The response was great! We had a lot more attendees than we had chairs for them to sit on - not bad for a Friday afternoon. As always, when you get senior people together from the major online retailers, there was lots of vigorous debate but David Williams, E-commerce Manager from Charles Tyrwhitt said everything I needed to hear:  “Probably the most comprehensive report I have read on the minefield that is the checkout process – it presents the balance needed between what the customer expects and the retailer wants to complete a transaction.”

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Which companies have been named and shamed in the new report?

As you know we don’t do naming and shaming – we offer constructive criticisms of the different practices employed by the different top UK e-tailers [smile]. The sites we reviewed systematically included: Amazon, Argos, Comet, Currys, Debenhams, John Lewis, Marks and Spencer, Next, PC World, Next, Tesco and Woolworths.

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And which ones are doing well?

… equally, nobody is perfect, but for some good ideas on a logical and pretty comprehensive layout for checkout, have a look at Comet and for an innovative (albeit not quite complete) approach to enclosing the checkout process, see Play.com.

Linus Gregoriadis

Published 19 June, 2007 by Linus Gregoriadis

Linus Gregoriadis is Research Director at Econsultancy. Follow him on Twitter or connect via LinkedIn or Google+.

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Comments (1)

Martin Talks

Martin Talks, Founder at Matomico

I interviewed Mike on my podcast if you want to hear the man himself talking about check-out issues - www.thetomcast.com

almost 9 years ago

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