A customer fills his shopping basket, and after completing most of the journey to the final sale, he changes his mind. Losing this revenue so close to the finish line is especially irritating to retailers. According to Onlineshop Basics, an average of 20 to 60 percent of customers in online retail cancel purchases in web shops. There are many reasons for shopping basket cancellations. This article explains how you can use artificial intelligence (AI) to reduce the rate of shopping basket cancellations.
Why your customers do not complete their purchases
The ordering process is full of pitfalls. On the way to the check-out, customers leave the process for many reasons. In general, there are two issues associated with these reasons: The customer either decides to purchase the same product from another retailer based on better conditions, or he does not agree with certain circumstances or conditions of the web shop. You can counter the first issue by using intelligent pricing solutions. For more information about this subject, see our pricing page. The first step you can take to confront the second issue is a precise analysis of your online shop. What exactly is the problem in the ordering process? Our practical experience shows that these are the most frequent “trouble spots”:
- The check-out process is too complicated or includes extensive clicking. For example, the visitor might be required to create a customer account in order to make the purchase without the option of checking out as a guest. The same applies if the customer is required to log in, but no longer knows his password.
- Fees or shipping costs that are displayed for the first time during the check-out process
- Limited payment methods: A lack of payment options is an obstacle for many purchasers. Purchasing by invoice is still number 1 among the most popular payment methods.
Do you have a lean ordering process with low obstacles, but your bounce rates are still are still too high? In this case, personalized incentives during the ordering process can make a significant contribution toward bringing undecided buyers successfully through the check-out process.
How to use intelligent personalization to lead more visitors to a final sale
If you detect early on which full baskets will likely not make it to the check-out, you can provide appealing incentives for your customers. An AI-based solution that includes a scoring process does exactly that. It analyzes a customer’s movements in the shop in real time and uses this information to create predictions for future behavior. If a certain forecast value for “purchase cancellation” is reached, the respective customer receives a targeted incentive. This can include corresponding incentives such as free shipping or discounts, for example. A live chat with a customer representative can be offered or a complementary product can be displayed, which the customer can purchase together with the item in the shopping basket at good terms. For example: The customer places a camera in the shopping basket. If a purchase cancellation is classified as probable, a matching camera bag is offered. The customer can buy it in a set together with the camera and save an amount X with compared with an individual purchase.
In real time, the AI solution automatically analyzes the transaction data in the shop, evaluates it, and reacts to it. To make the decision regarding a specific incentive, the intelligent algorithms draw on both the customer value (how often and how much does the customer order?) and the current basket value. This makes it possible to offer each customer the correct, personalized incentive in order to reduce the rate of shopping basket cancellations significantly.
You profit from two positive effects simultaneously. On one hand, the personalized service makes your customer feel well taken care of, increasing his satisfaction. On the other hand, you obtain the final sale. In this way, the purchase, which would otherwise have been cancelled, still counts as part of your revenue, and you reduce your rate of shopping basket cancellations.
Preventing a purchase cancellation: The perfect bathroom, just within reach
Here is an example of the described issue: Silvia is browsing in an online home improvement shop, looking for bathroom furniture and accessories because she wants to remodel her bathroom. She isn’t searching through this shop for the first time; she has regularly made purchases here for two years. In her shopping basket are a bathroom mirror, a vanity, a free-standing cabinet and a bath mat set. After she clicks the “Order now” button, she enters the check-out process, and suddenly, her activity in the online shop ceases for several minutes. The retailer doesn’t know if Silvia has been distracted briefly by the doorbell ringing, or if she is instead looking at a comparable product on a competitor’s site. Based on the amount of purchases in the shopping basket, a risk should not be taken, and because she has been a customer for some time already, the personalization software outputs a discount coupon. The amount of the discount is based on the shopping basket value. Silvia is pleased and the coupon provides her with a reason to complete the purchase.
Would you like to reduce your rate of shopping basket cancellations over the long term? Then get in touch with us today.