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Determinants of Cart Abandonment

In: Business and Management

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Abstract Despite placing items in virtual shopping carts, online shoppers frequently abandon them —an issue that perplexes online retailers and has yet to be explained by scholars. Here, we identify key drivers to online cart abandonment and suggest cognitive and behavioral reasons for this non-buyer behavior. We show that the factors influencing consumer online search, consideration, and evaluation play a larger role in cart abandonment than factors at the purchase decision stage. In particular, many customers use online carts for entertainment or as a shopping research and organizational tool, which may induce them to buy at a later session or via another channel. Our framework extends theories of online buyer and non-buyer behavior while revealing new inhibitors to buying in the Internet era. The findings offer scholars a broad explanation of consumer motivations for cart aban- donment. For retailers, the authors provide suggestions to improve purchase conversion rates and multi-channel management.
Keywords Online shopping cart abandonment . Online buyer behavior theory. E-tail .E-commerce
To more fully understand buyer behavior, it is crucial to also examine consumer “non-buying” behavior. Non- buying behavior is especially apparent in an online retailing context, where many shoppers place items in their virtual shopping carts yet do not complete the purchase—thereby abandoning their cart. Known as virtual or online shopping cart abandonment, we define this behavior as consumers’ placement of item(s) in their online shopping cart without making a purchase of any item(s) during that online shopping session. Industry studies report that 88% of online shoppers have abandoned their electronic cart in the past (Forrester Research 2005). As an ongoing “non-buyer” behavior, online shoppers abandon their carts approximately a quarter of the time. Specifically, Andersen Consulting and Forrester Research each show abandonment rates of 25%, and Jupiter Communications triangulates this finding by documenting a shopping cart abandonment rate of 27% (Tarasofsky 2008). To understand why such frequent abandonment occurs, it is vital to investigate consumers’ perceptions of virtual carts and their intentions to complete the purchase online or at a land-based store. To some extent, consideration of online shopping carts has relied on mirroring traditional carts, which may constrain strategic thinking about e-commerce and multi-channel marketing (Rayport and Sviokla 1995). For instance, mirroring offline channel functionality to an online store may result in overlooking features that could be beneficial online, or implementing features not suited for e-commerce (Weinberg et al. 2007). The current inquiry challenges the notion that virtual carts and the way consumers use them are analogous to using a shopping cart or basket. While such in-store carts are utilitarian (i.e., they store items en route to the cashier), virtual carts may have other, hedonic uses. Hence, it is important to study how and why consumers abandon their shopping carts in an online context. Identifying driving
J. of the Acad. Mark. Sci. (2010) 38:240–250 DOI 10.1007/s11747-009-0141-5
The authors contributed equally.
M. Kukar-Kinney Robins School of Business, University of Richmond, Richmond, VA 23173, USA e-mail: mkukarki@richmond.edu
A. G. Close (*) University of Nevada, Las Vegas, 4505 Maryland Parkway, Las Vegas, NV 89154-6010, USA e-mail: angeline.close@unlv.edu forces behind virtual cart use and the inhibitors to making an online purchase will help online retailers better understand their shoppers’ product interests and create more consumer-friendly sites. Despite widespread online cart abandonment and popular press touting the behavior, scholars have yet to examine what determines this consumer behavior. Hence, the purpose of the present research is to fill this gap in the literature. Because it is a new topic of scholastic inquiry, we provide a broad examination across product categories. The key theoretical contribu- tion is the development of a framework to identify drivers of electronic cart abandonment and explain why it occurs. We also determine how certain drivers of online cart abandonment help explain an online shop- pers’ decision to make the purchase at a traditional, land-based retailer. Consequently, the research offers implications for online retailers with respect to increas- ing conversion rates from online shopping to buying as well as for multi-channel management.
Theoretical background: buyer and non-buyer behavior
Purchase inhibitors
To investigate why consumers abandon their online carts, we first identify key inhibitors at each stage of the purchasing process. While preparing to buy online, con- sumers encounter a range of inhibitors which may trigger them to abort the process and abandon their cart. Tradi- tionally, inhibitory situations to purchasing include: social influences, lack of availability, high price, financial status, and time pressure (Howard and Sheth 1969).Here,we extend these inhibitors to the online context (Fig. 1,column 1). For example, the high price inhibitor may account for consumers’ decision to wait for a lower price and thus leads them to abandon their cart. The financial status inhibitor should be related with a shopper’s concern about total costs. We further suggest emerging inhibitors to purchasing online (Fig. 1,column2).Theseincludeorganizationand research, privacy and security issues, and technology An Extension of Inhibitors to the Online Purchase Process
Inhibitors During the Online Shopping Process
Social Influences (online search) • Online shopping not available (e.g., need to shop in a store for a gift on a registry) • Family/friends influence to shop together at a store • Lack of entertainment/boredom Lack of Availability (online search) • Of the product (e.g., sold out) • To online access • To the e-tail site • Of shipping to the geographic area (e.g., no international shipping)
Organization and Research (online search) • Need to organize items of interest in a single place • Desire to create a wishlist or other summary list of items of interest
High Price (online consideration) • Item not on sale • • • • Price of item(s) too high Shipping costs too high Handling fees too high Applicable taxes too high
Privacy & Security Issues (purchase decision) • With the Internet in general • With specific e-tail sites • Privacy of specific purchases • Privacy of personal information • Security of financial information
Shopper’s Financial Status (online evaluation) • The total cost is evaluated as too high • No access to accepted payment methods (e.g., Paypal, e-checks) • Limited availability of funds in preferred online payment account
Technology Glitches & Issues (purchase decision) • The Internet service provider, computer, or printer does not work • The website does not work • The payment system does not work • The online sale or promotion code does not work
Time Pressure (online evaluation) • Product is needed at time of purchase • Delivery too slow • The online purchase process too slow
Emerging Inhibitors to Purchasing Online
Figure 1 An extension of inhibitors to the online purchase process.
J. of the Acad. Mark. Sci. (2010) 38:240–250 241 glitches. In the e-tail era, such new inhibitory situations, not identified in the original Theory of Buyer Behavior, may help to explain online cart abandonment.
Consumer online shopping process
We apply the Howard and Sheth (1969) Theory of Buyer Behavior to online buyer or non-buyer behavior. Similar to bricks-and-mortar shopping, online shoppers form a need or want, they search, consider alternatives, evaluate them, and decide whether or not to buy the item(s) in the cart. After determining a need or want, an online shopper browses through web pages in the online search stage. While some online shoppers search with a motive to buy at that session, for others, the search is part of a purposeful ongoing search (Bloch et al. 1986).Tomaximizeinformationcollection efficiency, and to narrow down information overload, online shoppers may use virtual carts to organize their consideration set. Online shoppers also search and shop online for freedom, control or fun (Wolfinbarger and Gilly 2001). In the online shopping context, consideration occurs as a shopper places an item(s) of interest into their cart. Some shoppersmay place items under consideration in their cart as a wish list, a way to bookmark the product,for entertainment, or to obtain total cost. Hence, shoppers may use their cart to help taper options to a consideration set to be evaluated further. Then, online evaluation occurs when the online shoppers review the cart contents and analyze the items in the evoked set based on their past experience and unique purchase criteria (Nedungadi 1990).Shopperscompareandcontrasttheir choice criteria, focusing on those attributes that are salient in their motives (Howard and Sheth 1969),suchasthetotal cost associated with buying the cart contents. Based on evaluation of the item(s) in the cart, the consumers decide whether or not to proceed to checkout and purchase these items. Ultimately, when consumers begin to enter their personal or financial information online, they demonstrate a commitment to the purchase. The process described above is not necessarily sequen- tial. Online shoppers may go through stages out of sequence for various reasons (Li and Chatterjee 2006). For instance, consumers may not need product information, and thus skip to purchasing. Shoppers may also change their mind and revert to information search, or abort an intended transaction at any point. Finally, the aborted purchase may be completed in a bricks-and-mortar store, also explored here.
Hypotheses development
As online shoppers move through the purchase process, various factors are likely to impact the extent to which cart abandonment occurs. Some factors may be explained as inhibitors based on Howard and Sheth (1969), while others are identified as relevant to the online context. Eleven hypotheses positing relationships among these factors as they relate to both virtual cart abandonment and the decision to buy from a land-based store are proposed and depicted in Fig. 2.
Online search: the entertainment value
Consumers may shop online with experiential (e.g., entertainment-seeking) motives as well as goal-oriented (e.g., organizing potential purchases) motives (Novak et al. 2003;WolfinbargerandGilly 2001).Experiential motives include searching and shopping for fun and to alleviate boredom (Moe 2003;WolfinbargerandGilly 2001)orasamediumforentertainmentorescapism (Mathwick et al. 2001).Thus,entertainment-seekingshop- pers may place items in a cart for hedonic reasons. Such “experiential shoppers” (Novak et al. 2003;Wolfinbarger and Gilly 2001)viewshoppingasafunandexperiential activity more so than a means to obtain a product or service (Bellenger and Korgaonkar 1980;HolbrookandHirschman 1982).Therefore,wedefinetheentertainmentuseofcartas the extent to which consumers place items in their online shopping cart for purposes such as to entertain themselves and to alleviate boredom. Further, we propose that virtual cart abandonment is more likely to occur, the more the shoppers use their cart for entertainment.
H1: The more that consumers use their online cart for entertainment (out of boredom or for fun), the more likely they are to abandon it.
While the online cart can be used for entertainment purposes, cart use can also help an online shopper research and organize items of interest as a part of a purposeful search. In the course of purposeful (goal-oriented) ongoing search (Bloch et al. 1986),consumersmayusethecartto organize items of interest to narrow down their selections prior to gathering additional information. In a Forrester Research survey, 41% of participants placed items in the online cart for such research purposes (Magill 2005). Virtual carts also allow consumers to easily return to the item after considering other items in their evoked set. We thus define the shopper’s use of online carts for such reasons as organizational and research cart use. A relationship may exist between consumers’ research use and entertainment use of virtual carts. Securing an item in their cart and organizing a consideration set in their virtual space may provide some consumers with a sense of control. Wolfinbarger and Gilly (2001) show that online shopping can increase feelings of control and freedom. Online shoppers who experience more feelings of control in
242 J. of the Acad. Mark. Sci. (2010) 38:240–250 the online environment are active participants, not merely passive recipients of marketing and commerce (Wolfinbarger and Gilly 2001).Moreover,selectingitemsandvirtually organizing them is a higher involvement entertainment activity as compared with merely browsing webpages, as it requires shoppers to engage in deeper consideration of selected products beyond simply searching through the websites. Therefore, we propose that the more likely consumers are to seek entertainment from their virtual cart, the more likely they will be to use the cart as a shopping research or organizational tool. Specifically,
H2: The more that consumers seek entertainment from online cart use, the more likely they are to use the cart for shopping research and organizational purposes (such as information gathering, securing items of interest, narrowing the consideration set).
Online consideration: virtual cart as a shopping research and organizational tool and waiting for a lower price of the items in the cart
The contents of an online cart allow consumers to consider prices of items in their organized consideration set. When shoppers use their virtual cart as a research and organiza- tional tool during the consideration stage, some are not in immediate need to purchase the item(s) from that site at that given time, and are consequently more price sensitive
(Tellis 1986).Assuch,theseshoppersshouldbemore willing to wait for a sale or lower price of the item(s) in their cart. Specifically, we propose that the more that consumers use their cart as a shopping research and organizational tool, the more likely it is that they will consider the price of the item(s) in the cart and whether a lower price can be obtained at a different time or through a different channel. Hence, abandonment will more likely occur, the more the shoppers use the cart as a shopping research and organizational tool (H3). Furthermore, the more likely that consumers are to use the cart for research and organization, the more likely they should be to wait for a sale or lower price (H4).
H3: The more that consumers use the online cart as a shopping research and organizational tool, the more likely they are to abandon it.
H4: The more that consumers use the online cart as a shopping research and organizational tool, the more likely they are to wait for a sale or lower price.
Online evaluation: concern about total costs
While the previous hypothesis (H4) considers the individual price of items in the cart, online shoppers may be especially sensitive to the aggregate total of all items in the cart, which also includes shipping and handling costs, tax (if applica-
Determinants of Consumer Electronic Shopping Cart Abandonment: Conceptual Model
Note: The direction of the significant effect is shown for each relationship; n.s. = not significant.
Concern about costs
Privacy/security concerns
Entertainment value
Use of cart as research & organizational tool Online cart abandonment
Wait for sale or lower price
H6: +
Decision to buy from a land-based retailer
H1:+
H5: +
H2: +
H4: +
H11: +
H8: n.s.
H9: +
H10: +
H7: +
H3: +
Figure 2 Determinants of consumer electronic shopping cart abandonment: conceptual model. Note: The direction of the significant effect is shown for each relationship; n.s. = not significant.
J. of the Acad. Mark. Sci. (2010) 38:240–250 243 ble), and other fees that raise the overall cost. Many Internet users expect online retailers to offer lower prices on products; yet, the overall cost of the final order may discourage or inhibit shoppers from purchasing (Li and Chatterjee 2006;Magill 2005;XiaandMonroe 2004).As shipping and handling fees often appear at the end of the online transaction, seeing the total cost, consumers may decide to restrict the use of their shopping cart to a research and organizational purpose (H5), rather than buying the item(s) in the cart immediately. Thus,
H5: The more that online shoppers are concerned about the total cost of the order (cost of goods in cart, shipping charges, sales taxes, other fees), the more likely they are to use the online cart for shopping research and organizational purposes.
Consumers’ concerns with the total cost of the order may lead to the online shopper’s decision to wait until a lower price can be found on at least some item(s) in the cart, whether it be at the same or a different store, through the same or a different channel (H6). When any of the items exceed their reference price, the consumer may likely anticipate that a lower price is either currently available elsewhere or should become available soon. In an online context, substantial price dispersion and frequent price changes indicate a high likelihood that a lower price may be found at a different store or at a different point in time (Nelson et al. 2007).Therefore,weproposethatthegreater the consumers’ intention to wait for a lower price, the greater their likelihood of abandoning the cart at that session (H7). Specifically,
H6: The more that online shoppers are concerned about the total cost of the order, the more likely they are to wait for a sale or lower price.
H7: The more that online shoppers tend to wait for a sale or lower price, the more likely they are to abandon their online cart.
Purchase decision: privacy, security, and decision to buy from a land-based store
Privacy and security of personal and financial information are key concerns of online shoppers (Miyazaki and Fernandez 2001;Zhouetal. 2007)andareasonwhysome consumers avoid the Web (Laroche et al. 2005;Xieetal. 2006).Whenwebsitesdonotmeetconsumers’ privacy and security expectations, this concern may become especially prevalent during the checkout process, which requires consumers to enter personal and financial information, and may in turn influence consumers to abort purchasing the items in the cart. Therefore, we propose that the extent of consumers’ online privacy and security concerns is positively related with the frequency with which they abandon online shopping carts.
H8: The more that online shoppers are concerned about their online privacy and security, the more likely they are to abandon their online cart.
Furthermore, such privacy and security concerns, in addition to immediate gratification seeking and desire to reduce the overall costs may drive some online cart users to decide to purchase their cart item(s) at a land-based store at any point during the purchase process. Some shoppers may search for products and organize the items of interest in an online cart, but decide to actually buy them at a land-based retail outlet (H9). Such in-store purchases allow consumers an up-close physical examina- tion and an instant acquisition of products. Alternatively, upon consideration of the online price of the product, consumers may decide to buy it from a bricks-and-mortar store (H10), possibly for a lower price or at least a lower overall cost (i.e., avoiding any shipping and handling fees). Lastly, because online shoppers may consider buying at a bricks-and-mortar store as more secure than buying online, we predict that online shoppers who experience higher privacy and security concerns associated with buying online will be more likely to complete the purchase offline (H11). Stated formally, we predict:
H9: The more that online shoppers use their cart as a shopping research and organizational tool, the more likely they are to decide to buy the cart contents from a land-based store.
H10: The more that online shoppers intend to wait for a sale or lower price, the more likely they are to decide to buy the cart contents at a land-based store.
H11: The more that online shoppers are concerned about their online privacy and security, the more likely they are to decide to buy the cart contents at a land-based store.
Empirical research
Method and sample characteristics
In order to test the proposed hypotheses, we conducted an online survey. The survey contained questions about various factors hypothesized to be linked to shopping cart abandonment, measures of the frequency of online cart abandonment, frequency of buying items in the cart from a land-based store, general questions about consumer online behaviors and demographic characteristics.
244 J. of the Acad. Mark. Sci. (2010) 38:240–250
First, we conducted two preliminary studies. The first preliminary study involved a data collection from student online shoppers (n=183) at a private east coast university. Building on this, the second preliminary study employed a mixed—student and adult—sample of online shoppers in a metropolitan west coast city (n=247). Over the course of these two studies, the construct measures were refined. Both regional pilot studies were used to inform the main data collection (n=255), which employs the refined measures and a more representative, national consumer sample of adult online shoppers, and is thus the study of focus here. For this main study, we recruited a sample from an online national consumer panel from Zoomerang which mirrors the characteristics of the U.S. online population. The sampling frame was specified to be adults (non full- time students) who shop online. The obtained national sample consists of 255 respondents from 44 states. Just over half (53%) are males. There is a relatively dispersed age breakdown; 30% of the sample is older than 40, 28% is 31 to 40 years old, 29% is 21–30 years, and 6% is 20 or younger. A majority (93%) of respondents reports visiting online stores at least once a month. Almost one-third (29%) shop more frequently—once a week or more. Once visiting an online store, participants report purchasing from it on average 40% of the time (consistent with the 37% purchase in both pilot tests). The sample reports abandon- ing their online shopping carts 26% of the time, consistent with reports from Andersen Consulting and Forrester Research (25%) as well as Jupiter Communications (27%) (Tarasofsky 2008),andslightlylowerthanOliver and Shor’s(2003)32%.
Measures
We adapted some measures for independent variables from the literature. Specifically, we based the entertainment measure on the research by Wolfinbarger and Gilly (2001) and the privacy and security measure on Miyazaki and Fernandez (2001). Due to the emerging nature of the topic, we developed other independent variable measures of using the cart as a research and organizational tool and tendency to wait for a lower price or sale. Using the two preliminary studies, we also generated the key outcome measures of online cart abandonment and decision to buy from a land- based store. To determine the measurement properties of the scales, a confirmatory factor model including all theoretical con- structs was assessed by maximum likelihood estimation in AMOS. The standardized item loadings ranged from .70 to .99 and therefore displayed sufficient item validity and reliability. The constructs exhibited sufficient reliabilities ranging from .79 to .95. The inter-construct correlations were significantly lower than one, satisfying the test of discriminant validity. The construct and item reliabilities are reported in Table 1,andtheinter-constructcorrelations are in Table 2.
Findings
Evaluation of the structural model
To test the conceptual model, we employed latent variable structural equation modeling (LVSEM) with maximum likelihood estimation in AMOS (see Fig. 2 for the hypothesized conceptual model and Table 3 for the results). LVSEM was chosen because it helps control for measure- ment error, can improve ways to measure reliability and validity, and can help evaluate more complex inter- relationships simultaneously (MacKenzie 2001).All goodness-of-fit indices (χ2(140) = 374, p…...

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