Check This Out

Online Retailers Retool Shopping Carts to Keep Customers From Quitting

By Marcelo Prince
WSJ.com

Some e-commerce Web sites are rolling out new software that streamlines and speeds up the checkout process as they try to persuade more people to finish their online purchases.

The technology puts the entire process-from changing the color of a shirt in a virtual shopping basket to entering credit-card information-on a single page. There's no need to click back and forth between Web pages or re-enter data when the order is changed.

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Check This Out Some e-commerce Web sites are rolling out new software that streamlines and speeds up the checkout process as they try to persuade more people to finish their online purchases.

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A handful of retailers are rolling out the technology in hopes that the sleek, simple design will reduce the number of Internet shoppers who put items in their carts but don't complete their orders. Such "abandoned" shopping carts are the bane of online retailers; Forrester Research estimates that 53% of people who put items in their online carts leave without buying anything.

Stakes Are High

The cost of the new technology can run into the hundreds of thousands of dollars, but for online retailers, the stakes are high: For every dollar spent on e-commerce sites, $4.10 is left in abandoned carts, according to a recent study.

There are a variety of reasons that so many people quit online purchases, but one big one is frustration with complicated and lengthy checkout processes, says Carrie Johnson, an expert on e-commerce at Forrester. Others cancel their orders when they are "shocked" by shipping costs at the end of the checkout, she adds.

Proponents of the new shopping carts say they can alleviate many of these issues by keeping shoppers from jumping from screen to screen in the final stages of a purchase. In many ways, the new checkout screens look like actual Web pages. But the high-tech carts are actually small software programs, written using the Flash animation software that is more commonly used to design online ads and videos.

Customers can update their carts, which pop up when items are added, without leaving the page they are shopping on. The software also suggests related products that can be easily added to the order. The final price-with tax and shipping costs-is automatically updated as customers make changes to the cart. Once customers decide to checkout, they are taken to a single, interactive screen to provide billing and shipping information.

Today, "the quality of the digital experience most [online shoppers] have is pretty poor," says David Mendels, senior vice president at Macromedia, the software company that makes Flash. But an increasing number of Internet sites are using Flash and programs like it to develop applications that let shoppers customize products or simplify the checkout process.

One of the first retailers rolling out the technology is TJX, which will offer the Flash-based cart on Web sites for its T.J. Maxx and HomeGoods chains. The company was late to online retailing-its Web store opened last September-but it hopes the high-tech checkout will help it compete with established online rivals.

"This technology is very much in keeping with our sense of wanting to make it convenient for customers to shop our stores," says Sherry Lang, TJX's vice president of public relations. "Even in our stores, we have a bank of cash registers so customers are able to check out very easily." The company is rolling out the new online checkout procedure in stages, and it should be available for all customers by the end of the month.

Another retailer that is adopting the new technology is PC Connection. The company, which sells computers, printers and software to small businesses, gets roughly 10% of its $1.3 billion in annual sales from its Web site. Yet, roughly 46% of online purchases at PC Connection's site are abandoned, says Robert Wilkins, the company's executive vice president. This year, PC Connection is offering an enhanced version of the screen for small-business customers that allows them to chat online with salespeople and negotiate discounts.

Amazon.com, for its part, declined to comment on the new shopping carts. Amazon patented its own speedy checkout technology, called 1-Click, in 1999, which allows customers to buy an item quickly, using stored billing and shipping information.

Flash-based carts allow retailers to offer functions not generally available with current sites, which use the basic HTML Web-programming language. For example, items can be added, edited or removed at any point in the checkout process, without navigating away from the checkout screen. Billing and other information is checked as it is entered to prevent customers from moving forward without valid data.

Ralph Folz, chief executive of Molecular, the Internet design firm that developed the new checkout system for TJX and PC Connection, says it takes about eight weeks and costs about $250,000 to customize the software for an existing e-commerce site. Web shoppers with dial-up Internet connections or those who don't have the free Flash software are automatically redirected to a traditional checkout process.

Easy Check In

Another company, TravelClick, has created similar technology for hotel operators. Its software, called OneScreen, lets a visitor book a reservation on a single Web page with three interactive panels to select dates, pick a room type and enter billing info.

By collecting all the information on a single screen, the system helps customers avoid entering lots of information just to discover later in the process the room they want isn't available.

"On traditional hotel sites, you have to go all the way down a path and have to go back and start it again to make a change," says Ray Cohen, TravelClick's president and co-chief executive. "It's cumbersome and doesn't facilitate shopping."

The technology is already being used by independent and luxury hotels, including the Watergate in Washington, D.C., and the Broadmoor resort in Colorado Springs, Colo. Mr. Cohen says the software makes it easier for travelers to calculate the cost of upgraded rooms, which has boosted the average daily rates at the hotels using the system. The Broadmoor, meanwhile, estimates it has reduced the amount of time it takes to book a room online to less than one minute.