If a customer adds five items to their online shopping cart and then closes the browser before purchasing, it could simply mean that they changed their mind for some unpredictable reason. Maybe they decided to buy it later and went to bed, or they were just browsing with no intent to buy. However, it could also indicate that something is wrong on the retailer’s end that resulted in that change.
A variety of factors can push consumers to bail out after they’ve begun shopping—a consumer behavior widely known as cart abandonment. Common reasons include a complicated checkout process, being forced to create an account to make a purchase, or unsecure payment portals, among other issues.
While sellers can’t make changes to mitigate every issue that might cause a customer to abandon their cart, better fulfillment processes are one area retailers can target for improvement to ensure abandonment happens less often.
How Fulfillment Impacts Cart Abandonment
If an online shopper gets the sense that you can’t provide an efficient fulfillment process from order through delivery, they will often end their session on your website in search of someone that makes them feel more confident about the purchase they are making. Here are some of the areas where your fulfillment operation and processes can directly impact cart abandonment rates.
Real-Time Inventory Visibility
Not all retailers have synced their online store data with real-time data from the warehouse. This lack of real-time visibility can create a negative experience for customers when they try to buy an item that suddenly shows up as unavailable during the checkout process. Even if they have other items in their cart, they will often choose to abandon the entire order in favor of a retailer that has everything available, resulting in the loss of the entire sale.
What to do about it: Break down silos between warehouse management and order management by integrating data from your warehouses or third-party logistics (3PL) provider into your order management and e-commerce systems, which will mitigate the risk of unexpected stockouts for your customers.
Shipping Costs
With shipping costs on the rise, some retailers have opted to pass the additional expense on to customers at checkout, especially for faster shipping options such as same-day or next-day delivery. This practice might feel like it makes good business sense, but it can also create sticker shock for shoppers and cause them to think twice about the order.
What to do about it: Carrier rates are nearly always negotiable if you have enough total volume to make it worth their while. If you don’t have enough volume to get discounts, working with a 3PL that can leverage the total volume of all their customers can offer significant savings. Using a 3PL partner or expanding your own warehouse network to keep inventory closer to key markets can also dramatically reduce shipping costs by shortening the distance between inventory locations and customers.
Delivery Optionality
For many years, a push-and-pull relationship existed between cost and speed as the top preference for online shoppers. Now, however, they just want options that suit their needs for the specific order. For example, consumers are more likely to want high-value goods or medical supplies fast, while they’d be willing to wait for a low-value purchase or a big and bulky item that they don’t need right away.
What to do about it: In the warehouse, make sure you have the right automation or processes in place to pick, pack, and ship orders quickly to meet demands for faster delivery. Then, diversify your carrier mix to ensure that you can offer your customers an option that will suit their needs.
Returns Management Processes
It may seem counterintuitive, but many consumers will abandon an online shopping cart if they don’t like a retailer’s return policies. It’s simply become the nature of online shopping that consumers expect the worst and hope for the best, so they tend to hedge their bets when buying online in case something goes wrong. While they don’t necessarily intend to return the items they have in their cart, they do want to know that returning an item will be easy to do if the need arises. As such, rigid policies or high costs associated with returns are a key driver of cart abandonment.
What to do about it: Returns have long been a thorn in the side of retail warehouses because fulfillment operations need to peel off staff to inspect and process returned items. To implement return policies that won’t scare off shoppers at checkout, make sure your warehouse is set up (or that your 3PL’s warehouse is set up) with the necessary tools, processes, and automation to quickly process returns and send replacement items.
“Too many companies treat fulfillment like something that happens after a sale, but in reality, it’s actually what makes the sale possible in many cases,” says Frank Crivello, founder and chairman of Phoenix Investors. “If customers don’t trust you to get products to them quickly, reliably, and without surprises, they’re going to walk away and find someone who can. Fulfillment isn’t a back-end process anymore—it’s front and center for helping you gain brand loyalty.”
Addressing these key areas in your fulfillment process can not only help you reduce cart abandonment but also create a better customer experience that keeps shoppers coming back again and again. If making these adjustments feels out of reach, see how Phoenix Logistics can help.
About Phoenix Logistics
Strategic Real Estate. Applied Technology. Tailored Service. Creativity. Flexibility. These fundamentals reflect everything we do at Phoenix Logistics. We provide specialized support in locating and attaining the correct logistics solutions for every client we serve. Most logistics competitors work to win 3PL contracts and then attempt to secure the real estate to support them. As an affiliate of giant industrial real estate firm Phoenix Investors, we can quickly secure real estate solutions across its portfolio or leverage its market and financial strength to quickly source and acquire real estate to meet our client’s need.
