Show shipping charges up front: PayPal

A survey by online payment company PayPal Inc. and e-business analysis firm ComScore Inc. shows that unexpected shipping charges cause 56 per cent of Canadian online shoppers to abandon their virtual carts.

“They don’t know until the very end (of the shopping process) how much it’s going to cost to ship, and that really deters them,” said PayPal Canada general manager Darrell MacMullin at a briefing in Toronto this week.

MacMullin and representatives from shopping alert Web site Red Flag Deals, online drug store and Dell Canada Inc. discussed trends in online shopping at the briefing, particularly barriers to completing transactions.

PayPal has announced an express checkout feature built on the PayPal Instant Update API, which draws address and shipping data from the customer and the vendor and provides shipping, insurance and tax totals earlier in the buying process.

If presenting the shipping charges earlier in the process means more sales, eliminating shipping charges entirely is an even bigger incentive, said CEO and founder Ali Asari. When the company dropped its $3 per order shipping charge, it was “an inflection point” for sales.

Ansari admits free shipping isn’t going to be practical for every online store.

“It only works for certain types of products,” he said – particularly high-margin items. It’s also a useful customer loyalty tool. While some visitors might just order a small item once and never return, “a big lesson we had to learn (was) it’s important not to punish everyone for what a select few do,” Ansari said. carries about 15,000 products and its average order is in the $50 to $70 range.

Social shopping is a growing trend, according to Prashant Ramesh, senior manager of e-business for Dell Canada. “Every e-tailer is talking about it,” Ramesh said. Dell launched an online lounge for customers to share information, and uses microblogging site Twitter to alert customers to new deals, he said.

Red Flag Deals president and founder Derek Szeto pointed to features like online bookshelves, allowing customers to share their tastes with others, as one successful example of social shopping. Providing shoppers with forums for knowledge sharing and reviews is another e-tailing tactic that’s taking off, he said.

“They are certainly looking for the information online,” even if they aren’t necessarily buying online, he said.

Some other survey results:

* More than half (51 per cent) of Canadian shoppers surveyed said they get buy-button anxiety – they “typically feel a little anxious” making an online purchase, according to the survey. One reason: Forty per cent aren’t confident that the online merchant can keep their financial information secure. “That’s troubling when roughly half the people who buy from you are worried about giving you their credit card information,” MacMullin said.

American shoppers seem to be more confident. Forty-five per cent said they feel anxious when they get to the final click, and only 27 per cent felt e-tailers can’t take care of their credit card information.

* Forty-three per cent of those who abandoned their carts said it takes too long to fill out credit card information. Online checkouts can often take longer than brick-and-mortar checkouts, according to MacMullin. “That’s kind of backwards,” he said.

* Seventy-eight per cent of Canadians who abandoned a cart knew the site or had bought from it before.

* Only three per cent filled up a shopping cart with no intention of buying. That number was the same in Canada and the U.S.

* In Canada, 75 per cent said they abandoned a cart less than once a month. In the U.S., that number is 62 per cent. Four per cent of Canadians admitted to abandoning carts more than five times a month on average.

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Dave Webb
Dave Webb
Dave Webb is a freelance editor and writer. A veteran journalist of more than 20 years' experience (15 of them in technology), he has held senior editorial positions with a number of technology publications. He was honoured with an Andersen Consulting Award for Excellence in Business Journalism in 2000, and several Canadian Online Publishing Awards as part of the ComputerWorld Canada team.

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