Shopping Cart Abandonment Is A Logistics Problem

March 18, 2021

Prevent shopping cart abandonment with a compelling delivery promise.

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Shopping cart abandonment rates are higher than ever. Since June 2020, data shows that consumers abandon 94.4% of carts, compared to 85.1% last year. That equates to billions of dollars in forgone eCommerce revenue.

Undeniably, people have had more time to “window shop” online since the onset of the pandemic. Abandoning carts is an inherent part of window shopping—it's about research, price comparison, gift ideas, and saving items for later.

However, for those who aren’t “just browsing,” the top three reasons for shopping cart abandonment are*:

  • Shipping fees / costs are too high
  • Delivery time was too slow
  • Found product cheaper somewhere else

So, how do retailers save sales and reduce shopping cart abandonment?

Delivery promise matters #

Before consumers reach the checkout, they are thinking about costs. Eighty-one percent of shoppers say that delivery costs are one of the most important considerations when choosing where to browse.

If retailers present additional delivery costs in the last step of the checkout process, there's a chance that consumers will abandon their carts. Forty-five percent of shoppers abandon purchases because of the shipping rates, taxes, and fees associated with completing their purchase—making it the number one reason for shopping cart abandonment.

Flexe Chart Considerations Before Purchase 20210319
Most important considerations before making a purchase

Consumers are also thinking about how fast they can get their products before they even add items to carts. Sixty-two percent of consumers say that delivery speeds are important when deciding where to buy.

In the age of Amazon Prime, 73% of consumers agree that “fast delivery” is two days or less, and that's what consumers want. If retailers present longer delivery speeds in the final stages of the checkout process, at least 19% of consumers will abandon the sale.

FLEXE Chart Importance Fast Free Shipping 20210319

Delivery costs and speeds are clearly important to consumers, and retailers can lose sales if shoppers find better delivery promises elsewhere.

A staggering 93% of consumers will source products from other retailers to save on shipping costs. Similarly, 85% of consumers will source products from other retailers when delivery times are too long.

Consumers gravitate towards speed and convenience. Amazon is proof of that.

Customer obsession drives sales #

Amazon dominates the eCommerce industry. It gets products to consumers fast, and it centers its Prime subscription service around affordability. Consumers can count on the Amazon delivery promise, which is why 63% of product searches start on the platform. Its foundation is customer obsession, and that’s not changing.

In 2020, Amazon announced it was building 1,000 suburban fulfillment centers to support Same-Day Delivery. A growing number of consumers already use Amazon Prime One-Day and Same-Day Delivery, and those new, more compelling delivery options are driving revenue.

Consider this: 57% of Amazon Prime One-Day and Same-Day Delivery users say those offerings increase the amount of money they spend with Amazon.

Flexibility wins #

Retailers can’t afford to lose sales to major players like Amazon. The cost is too high.

Statista estimates that 15% of retail sales will come from eCommerce in 2021. That’s more than ever before, and that number is only climbing. In order to stay competitive in the evolving retail landscape, retailers and brands must bolster logistics operations to support fast and affordable delivery promises. That means adding more fulfillment centers that are closer to the end consumer in order to shorten last-mile transportation costs and speeds.

It’s not economically feasible to build thousands of fixed warehouses like Amazon. And entering long-term contracts with traditional 3PLs doesn’t allow for flexibility in a volatile market.

A viable way to achieve a winning delivery promise is complementing an existing, fixed network with a flexible network. By adding flexible fulfillment warehouses, retailers can incrementally test what size fulfillment network is needed to provide fast and affordable delivery.

Shopping cart abandonment is a logistics problem. But it can be solved with an optimized network and a compelling delivery promise.

*Unless otherwise cited, data comes from The Omnichannel Report: COVID-19’s Impact on Consumer Expectations.

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