Web retailers’ challenge: closing the sale

Matt Raines, vice president for technology at Bluefly in New York, says it needs to what it can to make it easy for people to buy on the site. Matt Raines, vice president for technology at Bluefly in New York, says it needs to what it can to make it easy for people to buy on the site.
(Michael Appleton/The New York Times
By Claire Cain Miller
The New York Times / October 12, 2009

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Shoppers rarely drive to the mall, load up their carts, and then abandon them in the middle of the store. On the Web, though, it happens all the time.

In online stores, it is much easier for shoppers to fill their virtual shopping carts - and much easier for them to get distracted by an e-mail message or by comparison shopping on other sites. Then there are the design flaws and technical glitches that can get in the way of closing a sale.

These problems have been around since online shopping was invented, but they have taken on more urgency in the past year as consumer spending has shriveled. So e-commerce companies are trying a variety of techniques to push shoppers through the virtual checkout line.

There are still plenty of people browsing online, but not so many buyers. In the second quarter, the number of visitors to e-commerce sites who eventually bought something shrank for most sites from the year before, by as much as 30 percent for and 26 percent for Gap, according to comScore.

“It’s pretty clear that people are looking at more alternatives, evaluating more options, getting better prices - but not buying,’’ said Gian M. Fulgoni, executive chairman of comScore.

Shoppers spent $130 billion online in the last year, according to comScore. But e-commerce sites missed out on billions more because customers abandoned their carts once they ran into problems while checking out, according to Tealeaf, a company that makes software to help e-commerce sites monitor customers’ behavior.

“The small transactions add up,’’ said Rebecca Ward, chief executive of Tealeaf, whose customers include Wal-Mart and Best Buy. “This is revenue that people really wanted to commit to the company and were unable to do it, and it often ends up being in the millions of dollars.’’

Many shoppers fill their carts just to keep track of things they like or to check shipping rates and taxes, with little intention of buying. While there are no industrywide data, some e-commerce companies estimate only about 3 percent of shoppers who visit an e-commerce site buy something, and when they do load their shopping carts, as many as two-thirds abandon them.

One of the biggest reasons people procrastinate more when shopping online is the fear of regret, said Dan Ariely, a professor of behavioral economics at Duke University, a visiting professor at the Massachusetts Institute of Technology, and author of the book “Predictably Irrational.’’

It is much simpler online than offline to discover that an item you bought yesterday is on sale somewhere else today. In fact, he said, people often spend more time researching a product after buying it online than before, to prove that they should not regret the purchase.

Some e-commerce sites encourage shoppers to log in before they fill their carts. Then, if they leave, the site can send them an e-mail message reminding them their cart is still there and perhaps offer a carrot, like free shipping. Tealeaf’s software can identify each registered shopper who got to a certain point in the buying process before giving up.

It also alerts shopping sites to technical problems that might otherwise have been invisible.

A month ago, the clothing retailer Bluefly realized some international shoppers were unable to check out. Using Tealeaf’s software, Bluefly discovered the glitch had been there for a year.

Instead of reporting the problem, customers had simply been leaving the site without making the purchase.

After Bluefly fixed the problem, revenue from international shoppers increased 10 percent in a month, and Matt Raines, Bluefly’s vice president for technology, estimated the fix would result in $1.1 million in additional revenue this year.

Bluefly also runs daily promotions and timed sales and shows Bluefly ads to previous visitors when they are on other sites. It is starting to offer customers the option to save the items in their cart to buy later, and is considering running customer reviews.