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Aug 1, 2007
by Alfred Branch, Jr.
Scripts & Gateways
Internet business consultant, Michael Bloch, of Tamingthebeast.net describes online shopping carts as, "a series of [computer software] scripts that keep track of items a visitor picks to buy from your site until they proceed to the checkout. A popular misconception is that shopping carts handle the whole financial transaction, but they only really act as a front end, which passes information via a secure connection (another service) to a payment gateway; a separate service altogether." Payment gateways are merchant accounts that allow for the processing of credit card transactions.
Essentially, shopping carts handle three primary tasks: keeping track of the products a customer wants to buy; determining their total dollar amount, including taxes and shipping and handling costs; and taking various forms of payment at checkout. Among the additional features some shopping carts include are inventory management, affiliate tracking, and newsletter and/or survey generation.
There are dozens of online shopping cart programs for small retailers that vary considerably in cost and capability, and even ones that are free. Because the number of choices can be daunting, Jeffrey Zimmerman, VP of ecommerce product management for Network Solutions, advises being careful of monthly shopping cart rates that sound too good to be true. "Always remember, you get what you pay for. Do not just look at the monthly price and think that something necessarily costs too much. Look at everything that is offered."
Tom Fraser, VP and GM of the shopping cart provider, Goecommerce.com, said retailers have to look out for bait and switch tactics employed by some cart companies where the provider offers very low teaser rates that skyrocket once the necessary functions are added. An online retailer needs to know everything that is included in the shopping cart solution and its fee structure, the number of products that the cart can carry and how issues are handled when they arise.
Zimmerman, whose company owns the shopping cart provider, MonsterCommerce.com, said that when looking for an online shopping cart for a website, retailers first have to decide whether they want a hosted solution or a software program. With a hosted shopping cart, the hosting company handles all set up, integration and maintenance matters. These options are often easy to use and implement, because the hosting company does all the hard work. A software solution requires the retailer to set up the cart themselves, often on the company's server. Though many shopping cart software programs are relatively easy to set up, a retailer would need to be fairly knowledgeable about computers to handle the integration and maintenance.
Depending on the size of the online retail store and the types of products the store carries, merchants have a myriad of options to choose from. But first and foremost, a retailer has to make sure the shopping cart is easy to use.
"Retailers should look at the shopping cart company as providing a comprehensive ecommerce solution," Zimmerman said. "The overall design should be clean and easy to navigate, and it should be able to collect different types of payment options. Also, does it have a product catalog feature built in, and does it collect and process shipping information in real time, so that customers will know up to the minute what their shipping costs will be."
Retailers should read the shopping cart company's website thoroughly, and ask for references of sites that are using the product. Put those reference sites through their paces by going through the purchasing process. Pay attention to how the site handles the transaction. The cart should be able to handle large and small sales volume with equal agility and should be flexible and customizable to meet a company's needs.
The number of products a shopping cart can manage is crucial. Because stores usually add merchandise, the cart should be able to handle an unlimited number of products.
Zimmerman said to look for shopping cart companies that offer free trials, in order to test the functionality of the cart, and that give merchants 24/7 access to tech support when problems arise. Test the customer support team's reaction time by contacting it to see how long it takes to answer a question. It should never take more than a few minutes to get someone on the phone who can provide an answer.
"Anytime you can get a free trial to see what the site is capable of doing, and its features, we find that is something that is very important," added Susan Wade of Network Solutions.
Another feature to consider is the shopping cart's search engine optimization techniques, and how much help the cart will be in keeping a retail site's rankings high on Google, Yahoo and other search engines. "It is important that the shopping cart company stays as current as possible when it comes to search engine optimization, because it is constantly changing and evolving," Zimmerman said.
Wholesalecentral.com offers its members a free, secure shopping cart option, which has been a popular feature of the website for several years. The cart is available to wholesalers, but retailers with questions can call the site's staff during business hours. All the carts carry the same overall characteristics, which make navigation easy.
Although shopping carts generally perform the same functions, not all shopping cart programs or software are created the same, so it is in a retailer's best interest to ask the cart provider specific questions about its capabilities. According to Internet expert, Ryan Welton, of Practicalecommerce.com, the questions cover six categories: function, shipping issues, payment processing, customer support, technical issues and report generation. Among specific questions he recommends asking are:
In addition, a merchant has to make sure they completely understand the shopping cart solution's pricing structure. Ask how long introductory rates will last, and whether the cart company bills by a flat, monthly rate or uses another method.
Some cart companies not only charge a monthly rate, but also take, for example, 1.5 percent of each transaction, Zimmerman said, which can add up very quickly. "That type of payment structure might be okay when a retail business is small, because the volume of sales is low. But as the business grows, those costs become very expensive. It is as if a company is being punished for being successful."
A small retailer can expect to pay about $60 per month for a basic, online shopping cart, Fraser said, but he added that teaser rates could drop that figure significantly for the early months. There is some customer data that, by law, online retailers are not supposed to collect, such as CVV2 numbers on the backs of credit cards. Merchants should make sure that the shopping cart they choose does not gather and keep.
While shopping cart or checkout abandonment is something to be concerned about, Zimmerman said, do not worry too much. "Some abandonment is not necessarily a bad thing. A sale might not have occurred at that time, but it is encouraging to know that often those customers return later to complete the sale, and also that they thought enough of your site and products to at least put things in the cart."
According to ecommerce experts, JupiterResearch, about 54 percent of web customers have left online stores in the middle of a transaction for a variety of reasons. It might have been potentially bad product delivery or poor service. Perhaps they found the store's site confusing and laborious to navigate through, or uninformative. All of these can hurt a retailer's credibility and reputation. The eTailing Group estimates that at least ninety percent of online retailers suffer shopping cart abandonment rates of higher than ten percent. Conversion rates are generally improving, but only in incremental doses.
According to Forrester Research, about thirty percent of online consumers avoid making purchases on the web, primarily because of concerns about security (see sidebar). In addition, customers often experience sticker shock over the shipping and handling costs, Zimmerman said, so if possible, provide customers with a way to review those costs earlier in the process, rather than during checkout.
Many consumers purposely visit multiple sites that carry the same products and take the buying process through the shopping cart just to compare prices and check on product availability. Some estimates number those types of online shoppers as high as 75 percent. According to the National Mail Order Association, the average delay between when a buyer first visits a site to when he or she makes a purchase is 19 hours, and about twenty percent take as long as three days between their first visit and buying action.
"There is always going to be some abandonment," Fraser said, "But putting customers at ease can help." To help combat abandonment, retailers should strive to make the whole site and checkout process as easy to navigate and as user friendly as possible. Place a thorough Frequently Asked Questions (FAQ) section in an easy to find spot and make sure the company's return policy is in a prominent place and clearly worded.
Another incentive to help cut down on cart abandonment, Zimmerman said, is to allow potential buyers to place items in wishlists, personalized accounts where customers can store potential purchases without using a shopping cart. Wishlists allow users to leave the site, but return later and find their potential purchase decisions intact. Along those same lines, Zimmerman said, merchants should not force customers to register for a site too early in the process, because it can scare off buyers who simply want to see what they like. "It is probably optimal to make registration after checkout, and then as an option a consumer can decide to do or not," Zimmerman said.
Collecting customer feedback is very informative. According to the Internet experts at TMCNet, large retailers such as Wal-Mart and Petco are asking customers why they abandoned their purchase. "One of the things that we have learned with Web 2.0 is that consumers are willing to give feedback," Zimmerman said. Offer links or short surveys on the site or in email newsletters that allow customers to comment on products, their shopping experience or the site in general.
Fraser said merchants can easily include surveys on a company's site through web based programs such as Zoomerang.com, a site that allows retailers to create surveys with questions customized to a specific store. The best way to learn about the purchasing process is to ask the customers using the system.
The wisest move you can make when choosing a shopping cart is to research your options before buying. Learn what you need in a cart, read advice on how to choose one, and learn what support you will receive once you have made a selection. When you have spent time and money optimizing your site and configuring it for the convenience of buyers, you do not want to lose a high percentage of them at checkout.
Keeping A Secure Cart
The primary concern for most consumers who shop online is the security of a website's checkout process. While sites are significantly more secure than five years ago, experts say that no shopping cart or checkout procedure is 100 percent fool proof. Implementing some of the following precautions will certainly improve the odds of safety and security.
A strong, reliable track record is important. Doing a simple search for cart programs will yield dozens of options, but before you choose by price alone, remember the saying, "You get what you pay for." Read articles on what features the best and most secure shopping carts have, and articles that compare and review the different programs. When you have selected a few favorites, study all aspects of the company to see which ones meet the list. Find out the names of a few clients and see if they will provide you with feedback. Ask the shopping cart company if they offer a free trial period, so that you can test the program.
It is a smart idea for a website owner to familiarize himself with the encryption process. Recently developed software using new algorithms that are harder to crack is taking encryption to a new level. These solutions allow merchants to create keywords known only to them. When the keywords are added to the shopping cart's code, the retailer has more control over how customers access the cart.
Encryption is a behind the scenes type of security, but there are more visible signs that a site is hacker safe. Consumers have been educated to look for the padlock icon before submitting any payment information over the Internet. The padlock signifies that the merchant has an SSL certificate, the transaction security protocol used by hundreds of thousands of websites to protect online commerce.
Additionally, there is the option of becoming Payment Card Industry (PCI) Compliant, which means the website is in compliance with the four major credit card companies. Initially each card developed its own security protocols and awarded seals based on compliance, and those programs still exist. But for simplicity's sake and standardization, in 2004 the card associations set down a group of criteria merchants must meet, hence the PCI Compliance program. Merchants with a PCI Compliance seal are further able to ease the minds of buyers as to the safety of entering confidential credit card and checking account information.
Because server crashes and other problems can happen at any time, merchants should have 24/7 access to the shopping cart company's tech support team. Shopping carts with forums are a bonus, because chances are, someone else has had the same problem too. Stay on top of the company and ask lots of questions, because several states have recently, or are in the midst of, strengthening the laws governing identity theft and what online retailers would be liable for if a company's customer database were breached.
The more secure your site is, the more comfortable consumers will feel entering their payment information. Spending a little extra on your system and its security ensures the comfort of your customers and can result in a higher percentage of completed sales.
Topic: Web Tech Tips
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