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Shocking Relation Between Shopping Cart Abandonment & Your Shipping Strategies Which Is Costing You $1000s Monthly

abandoned cart and shipping cost relation

For sustained success in e-commerce, the secret weapon isn’t just in what you sell – it’s how you handle shipping. This is especially when it comes to pricing. The data speaks volumes: According to the Baymard Institute, the average cart abandonment rate is a staggering 70.19%, with the hidden villain being none other than shipping costs. 

Shipping costs and cart abandonment are closely linked, particularly for low-value orders facing modest shipping fees. These fees, exceeding product prices, often lead to hesitation or abandonment as customers seek more affordable options. High free shipping thresholds can also contribute to abandonment due to the perceived spending burden. 

Beyond cost, cart abandonment involves delivery and fulfillment, where efficient handling is crucial. Inefficient shipping management can cause customers to abandon their carts. 

Transitioning to effective shipping strategies, this article explores solutions – emphasizing the role of plugins in overcoming this challenge.

The Significance of Shipping Cost in Cart Abandonment

Unexpected costs, confusing checkout steps, or the fear of a sluggish delivery process throw a wrench in a customer’s online shopping euphoria. There are many reasons for cart abandonment, which is a challenge faced by all e-commerce businesses. However, a significant player in this game is the often underestimated shipping cost.

According to the latest data, a whopping 47% of shoppers abandon their carts due to extra costs, and a considerable chunk of that includes shipping charges, taxes, and fees. Slow delivery nabs the silver medal at 24%, while 17% struggle with the inability to foresee or calculate their total order cost upfront. As you can see, when it comes to cart abandonment, shipping-related issues emerge as the most formidable hurdles – particularly concerning pricing and cost-effectiveness. 

Reasons for abandonments during checkout
Source: Baymard Institute 

Shipping Costs, Delays, and Transparency 

It is quite established now that efficient shipping is a cornerstone of the online shopping experience. It certainly influences customer satisfaction well beyond the point of purchase. As an online store, you must recognize the substantial impact of shipping costs, delivery delays, and transparency on customer retention and the overall success of transactions.

Let’s revisit the subject of shipping costs. 

  • Shipping Costs and Lack of Transperancy

One key contributor to cart abandonment is the perception of exorbitant shipping costs. When customers encounter unexpectedly high shipping fees at the checkout, their willingness to complete the purchase diminishes. 

Transparent pricing is crucial, as a significant gap between the product cost and shipping expenses undermines trust. Frustration arises when shipping costs are not clearly displayed or are revealed belatedly, creating a sense of deception.

It doesn’t come as a surprise at all that the online market today is highly competitive. So, you’d expect that customers are inclined to abandon their carts in favor of stores with upfront and equitable shipping policies. Therefore, maintaining transparency regarding shipping costs is imperative to ensure customer satisfaction and curb cart abandonment.

  • High Threshold for Free Shipping, and Other Free Shipping Options 

Another significant factor contributing to cart abandonment is falling short of the minimum order amount for free shipping eligibility. Many customers abandon their carts when faced with additional charges. Businesses need to be mindful of this threshold and consider offering free shipping options to enhance the attractiveness of their offerings.

Shipping delays pose a significant threat to customer satisfaction. In an era of instant gratification, customers expect prompt deliveries, with a growing demand for same-day or next-day services. 

E-commerce giants like Amazon and Alibaba have set high standards, shaping customer expectations for rapid order fulfillment. Failure to meet these expectations can lead to frustration and, ultimately, cart abandonment. To mitigate this risk, businesses should prioritize reliable shipping partners, implement efficient logistics systems, and communicate realistic delivery timelines.

Customers highly value transparency, especially concerning the total order cost. Hidden fees or unclear shipping information erode trust and prompt users to abandon their carts. Implementing user-friendly interfaces that prominently display shipping costs, taxes, and fees upfront can instill confidence in customers and encourage them to proceed with their purchases.

Evolving Customer Expectations in Terms of E-commerce Shipping

It goes without saying that understanding and meeting customer expectations have become pivotal for businesses to prevent cart abandonment. It is also vital to ensure a positive customer experience.

Customers today expect more than just timely deliveries. As you know now, they seek transparency, flexibility, and convenience throughout the shipping process. High shipping costs, unexpected fees, and delays can all contribute to cart abandonment, making it essential for businesses to align their shipping strategies with evolving customer expectations.

Several successful e-commerce businesses have adeptly navigated this evolving landscape, setting examples for others to follow. 

Amazon, for instance, has pioneered the concept of fast and reliable shipping with services like Amazon Prime. The promise of expedited deliveries and free shipping for subscribers has not only met but exceeded customer expectations, reducing cart abandonment rates significantly.

Another notable example is the implementation of real-time tracking and communication by companies like Zappos. By providing customers with accurate and up-to-date information about their orders, Zappos has enhanced the overall shipping experience, reducing uncertainties and building trust. This level of transparency can be a powerful tool in mitigating cart abandonment.

WooCommerce too, as a platform, enables smaller e-commerce businesses to address shipping concerns effectively. With integrations and plugins that allow businesses to display shipping costs clearly, set up real-time carrier rates, and offer various shipping options, WooCommerce empowers businesses to align with customer expectations, reducing the likelihood of cart abandonment. 

So, we’ve now looked at how shipping strategies and related costs influence cart abandonment and gained some inspiration for success. It’s time to delve into strategies that address shipping as a factor in cart abandonment. 

Simple Solutions to Address Shipping Costs and Shopping Cart Abandonment for Boosting Sales

Luckily, there are several straightforward approaches to alleviate the issues associated with shipping. Here are a few uncomplicated adjustments that can potentially enhance your overall sales figures.

1. Ensure accurate and up-to-date shipping costs with real-time updates 

Guarantee precision and clarity in shipping expenses for your customers by incorporating real-time shipping updates seamlessly into their e-commerce checkout process. 

Integrating real-time shipping into your WooCommerce store allows you to provide current and precise shipping rates from carriers like FedEx, UPS, and USPS. Unlike fixed or predetermined rates, real-time shipping adapts to factors such as package weight, dimensions, destination, and chosen shipping service (for example; standard or express).

Enabling real-time shipping rates yields multiple advantages. Firstly, it ensures accurate pricing, and building trust with customers by avoiding overcharging or undercharging based on specific order details. Additionally, offering shipping options from reputable carriers like FedEx, UPS, and USPS gives you a competitive edge, attracting customers who prefer these services. Transparent shipping costs displayed during checkout contribute to reduced cart abandonment rates, as customers are less likely to abandon orders due to unexpected or high shipping fees.

The implementation of real-time rates also brings time savings through automated shipping cost calculations, eliminating the need for manual price adjustments for different products or locations. Dynamic pricing allows rates to adjust with carrier pricing changes, ensuring that shipping costs remain up-to-date. Moreover, the flexibility to provide various shipping options, such as express or overnight shipping, caters to different customer needs and preferences.

Enhancing the overall shopping experience, accurate rates contribute to improved customer satisfaction by making the process more transparent and convenient. Cost control is another significant benefit, as real-time rates help efficiently manage shipping costs, preventing unexpected losses due to undercharging for shipping.

You can consider using the Shipping Live Rates for FedEx plugin for your WooCommerce store. It is a helpful tool and allows you to seamlessly integrate FedEx shipping options into your store. Customers can view real prices for FedEx shipping services during checkout, calculated dynamically based on product weight and addresses using the FedEx API connection. The global shipping method of Flexible Shipping for FedEx and WooCommerce ensures that live shipping rates are displayed for all products within all shipping zones once activated.

Alternatively, you can also use:

2. Offer flexible shipping options and advanced delivery management

Provide multiple shipping options to cater to diverse customer preferences. Give customers the flexibility to choose from a range of delivery services, such as standard shipping, expedited shipping, same-day delivery, or local pickup. This ensures that you accommodate a broad spectrum of needs. 

Such a strategy can bring down cart abandonment rates since it allows customers to select shipping methods that align with both their preferences and budget. customers feel in control of their shipping expenses and are more likely to complete their purchases. Additionally, expedited shipping options can attract customers who need their items urgently, reducing the chances of them seeking alternatives elsewhere. Offering choices aligns with customer expectations and fosters a transparent and flexible shopping experience, ultimately boosting conversion rates and reducing cart abandonment.

The Order Delivery Date Pro plugin offers a comprehensive solution for efficient delivery management. It enables customization of local pickup options by selecting specific product categories and pickup locations, setting limits for delivery slots. The plugin facilitates same-day and next-day delivery with configurable fees and cutoff times. Tailored delivery solutions, crafted delivery schedules, recurring deliveries with WooCommerce Subscriptions integration, specific preparation times for products, optimized shipping costs, and Google Calendar integration collectively streamline the entire delivery process, ensuring timely and organized order fulfillment while enhancing the overall customer experience.

3. Reveal any handling fees clearly

Are there handling fees associated with your online orders? If the answer is yes, it’s crucial to be transparent and inform your customers about these fees upfront. Failing to do so may lead to customer frustration, causing them to abandon their shopping carts. Concealed fees can create a sense of dishonesty, leaving a negative impression on your customers.

It’s important to note that handling fees are distinct from delivery costs. Handling fees encompass various aspects, such as the time invested by your staff in picking and packaging orders, additional packing materials for delicate items, and other related expenses. Additional handling charges may apply in specific situations, such as when assembly is necessary before delivery, an item requires gift wrapping, or there is customization involved.

Separate the handling fee from the shipping charge and clearly disclose it to the customer on the shopping cart page. Upon presenting a clear breakdown of costs, including handling fees, customers are more likely to proceed with their purchase. This transparency fosters trust and reduces the likelihood of cart abandonment.

You can use the WooCommerce Extra Fees plugin as a versatile solution offering the ability to establish additional fees through straightforward and effortless configuration. With this plugin, users gain complete control over the creation of rules governing these supplementary charges.

This tool helps store owners to set up extra fees based on multiple conditional rules, allowing for a highly customizable approach.

4. Offer free shipping

Integrating a free shipping policy emerges as a robust strategy for mitigating cart abandonment, particularly when dealing with high-value transactions or a clientele with a noteworthy average order value (AOV). Through absorbing the shipping costs, you eliminate a potential hurdle for customers and build an image of customer-centricity. The appeal of not having to pay for shipping not only makes current customers more likely to finish their purchases but also encourages them to come back again. 

This strategy works well when your product profit margins are big enough to balance out the shipping expenses. Choosing to provide free shipping is a sensible decision, as the overall benefits, such as happier customers and increased sales, outweigh the costs.

Recommended Reading: How to Configure Flat Rate, Free Shipping & Table Rate Shipping in WooCommerce

Beyond the immediate financial and logistical considerations, the provision of free shipping plays a pivotal role in establishing lasting customer relationships. In fact, it can also effectively bring in new customers, boost the chances of turning visitors into buyers, and improve how people see your brand. It sets you apart from competitors with paid shipping.

Strategically offering free shipping can be a powerful tool for online retailers to enhance customer satisfaction and reduce cart abandonment:

  • One effective approach is to provide complimentary shipping as an exclusive perk for valued members, subscribers, or VIPs. This not only fosters loyalty but also encourages repeat business. 
  • Another strategy is to adjust the minimum purchase requirement for free shipping, making it more attainable for customers. 
  • Additionally, including free shipping incentives in a series of cart abandonment emails can serve as a persuasive reminder for customers to complete their purchases.

To strategically provide free shipping without compromising profit margins, store owners can consider incorporating the shipping cost into the product pricing or exploring partnerships with shipping providers for discounted rates. Implementing a minimum order value for free shipping ensures that the benefit is tied to profitable transactions. 

Moreover, periodic promotions or limited-time free shipping offers can create a sense of urgency, driving immediate customer action while maintaining a balance between customer satisfaction and business profitability. Following are a few easy to imply practical free shipping strategies. 

Relation Between Shopping Cart Abandonment & Shipping Strategies

Source: SaveMyCent

4.a. Provide complimentary shipping to your valued members, subscribers, or VIPs.

Explore the possibility of introducing a rewards program where customers can accumulate points for free shipping on their purchases, fostering a win-win situation. The success of Amazon Prime is a testament to the effectiveness of such an approach – an example we’ve already looked at, above.

To get started this initiative, create a membership program, VIP club, or an enticing email newsletter. Extend the privilege of complimentary shipping to your subscribers as an exclusive membership benefit. This highly desirable incentive not only minimizes the risk of abandoned carts during the checkout process but also aids in the growth of your email list and digital marketing funnel by attracting new clientele.

To implement a free shipping incentive for members, subscribers, or VIPs on a WooCommerce-powered website, you can use various plugins to achieve this functionality. One popular and flexible plugin for WooCommerce is the Membership for WooCommerce plugin, so you can try it out. Another option is WooCommerce Memberships

4.b. Adjust your minimum purchase requirement for free shipping

The free shipping threshold is the minimum purchase amount customers must reach to qualify for free shipping. Accurately determining this threshold is crucial for reducing abandoned carts, attracting customers, and staying competitive. If you’re experiencing a significant number of abandoned carts, consider reassessing your free shipping threshold, as it may be too high and discourage potential customers.

While offering free shipping on all orders may not be practical, especially if dealing with a high volume of low-value items where shipping costs could outweigh the order’s value, establishing a threshold for free shipping is essential. Without it, customers are less likely to place higher-value orders.

Experiment with lowering the threshold to a point where most customers can attain it, potentially increasing your Average Order Value (AOV). To determine an appropriate threshold, calculate your AOV and set the free shipping threshold slightly above that figure. Additionally, prominently advertise the fact that free shipping is available for orders surpassing a specific threshold to incentivize customers.

Calculate your free shipping threshold using the following formulas:

  • Average Order Value (AOV): AOV = Total Sales ÷ Number of Orders
  • Average Shipping Costs: Average Shipping Cost = Total Shipping Costs ÷ Number of Orders
  • Gross Profit Margin: Gross Profit Margin = [(Total Sales – Cost of Producing the Product) ÷ Total Sales] × 100
  • Proposed Minimum Cart Value: Set a minimum cart value for free shipping.
  • Viability Check:
  • Difference = Proposed Minimum Cart Value – AOV
  • Additional Profit from Difference = Difference × Gross Profit Margin
  • Adjusted Shipping Cost = Average Shipping Cost – Additional Profit from Difference
  • Adjustment: Modify the Proposed Minimum Cart Value based on the adjusted shipping cost to ensure profitability.

This feature won’t be available straight out of the box. We have prepared a functional copy-paste & use code snippet to efficiently use the FREE shipping strategy for minimum purchase value. Take a look at it to quickly implement on your Woo store. 

You can check out this post on implementing minimum purchase requirements for free shipping for detailed insights.

5. Include free shipping in your series of cart abandonment emails.

The cart abandonment email sequence entails sending a series of emails to customers who have left items in their shopping cart, enticing them to return and complete the purchase. This method has proven effective, with a reported 45% open rate for cart abandonment emails and half of those opened emails resulting in click-throughs, half of which ultimately lead to successful purchases, as reported by Moosend. Incorporating free shipping into your cart abandonment email series can significantly elevate your sales approach. 

Neglecting to include cart abandonment sequences means missing potential sales opportunities. An effective strategy to bring customers back to your online store and encourage them to finalize their purchase is by offering a time-limited, complimentary shipping deal. This incentive doesn’t necessarily have to be introduced in the initial email; in fact, it can be more impactful if reserved for the second email. The first email can serve as a simple reminder for instances where the customer may have forgotten to complete the checkout process or got sidetracked. Regardless of when you present the offer, it is crucial to emphasize its time sensitivity, creating a sense of urgency that makes the customer take immediate action.

To simplify the implementation of these strategies on your WooCommerce platform, consider harnessing the Abandoned Cart Pro for WooCommerce plugin. This tool enhances your cart abandonment email efforts by automatically sending well-timed, personalized emails to users who abandon their shopping carts. Online stores that send recovery emails within 20 mins to 1 hour saw a conversion rate of 4.5% to 5.2%

Abandoned cart email statistics

Source: Fit Small Business

Endnotes

Understanding the intricate relationship between shipping costs and shopping cart abandonment is vital for e-commerce success. It’s essential to balance transparent pricing with varied shipping options to meet the changing expectations of customers, thereby reducing shopping cart abandonment rates. Effective strategies include providing accurate, real-time information on shipping costs, offering a range of flexible delivery choices, maintaining clarity in handling fees, and occasionally providing complimentary shipping. These measures can directly address the dual challenge of shipping costs and shopping cart abandonment, ensuring a smoother and more satisfying shopping experience for customers.

Additionally, utilizing plugins like the Order Delivery Date or Abandoned Cart Pro streamlines implementation, maximizing the potential for recovering abandoned carts and increasing conversion rates. Online stores that prioritize customer-centric shipping strategies are better positioned to thrive in the competitive online market. Wishing you luck in your endeavors to recover abandoned carts!

Browse more in: Abandoned Cart News, Abandoned Carts, Ecommerce Strategy, Ecommerce Tips

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