For 2017 I started practicing checkout delay when online shopping as part of my cost cutting initiatives. I later found out marketing companies have a term related to this behavior called shopping cart abandonment which is used by consumer behavior research companies to track lost sales revenue due to customers leaving a website without completing their purchase. Research shows that the average abandonment rate is between 60% to 70%, and although the main reasons for abandonment were due to final price at checkout, there were a variety of other issues related to the ease of a website’s checkout process.
Customers who abandoned an online shopping cart were less likely to return to purchase that product on the website or a competing website. It seems folks more often than not lose interests in an impulse purchase once the excitement has worn off. It’s no surprise that companies spend excessive amounts of money on marketing efforts and website optimization to reduce the probability of this behavior.
Take Amazon.com for example, from the beginning their checkout process consisted of a minimal amount of clicks needed to complete the checkout process. Over time they created the Buy Now 1-click button and a few years ago they released the Amazon Dash buttons you can place around your house. Do you need financing? No problem! Two clicks and your 5-month financing is complete!
Now that we are aware of what shopping cart abandonment is, that it leads to a higher probability of a consumer not purchasing an item and that companies are going out of their way to try and recover abandoned shopping carts, let’s looks at how we can use this to our advantage.
The first step is to allow yourself a “cooling off period” before completing an online order. Have you ever been walking around the grocery store and you pick up an item that catches your eye, that you don’t really need and you add it to your cart? You continue pushing your shopping cart around the store, and the longer you walk the more you realize that item is not necessary and will not bring you as much happiness as you first thought it would when you first saw it. You eventually discard the item to a random shelf and proceed to the checkout counter. By allowing yourself a cooling off period, you give yourself time to think about the purchase logically rather than emotionally before completing your purchase.
Make a rule to not immediately purchase items you place in an online shopping cart. Feel free to browse your favorite websites and place items you want to buy in your shopping cart, but do not allow yourself to complete the checkout process right away. Ask yourself, “what would happen if I did not purchase this product?”, “Is it possible that I will use this product for a few weeks or months and then discard it to a junk pile?” After answering these questions you can decide whether to purchase these products or not.
I started delaying online checkouts in late October 2016. I continue to feed my impulse purchasing urges by allowing myself to “window shop” online and place items in my cart, but I wait until the end of the week to check out. (If you have issues controlling your behavior I would suggest not window shopping). At the end of the week when I review the items in my cart I reconsider whether the items are really going to fulfill a need or enhance my life. If they do not, I remove them from my cart before proceeding to checkout.
What was I wasting money on?
Let’s look at a list of some of the useless items I was purchasing that are now sitting in a junk pile at home. I’ll just highlight spending from September and October of 2016 or we will be here all day.
- September 2016
- Super bright white interior dome lights for my car (they are awesome and look great but weren’t necessary) – $17
- New garage door opener (mine stopped working. A few weeks later I figured out how to reprogram the old remote) – $26
- Tumeric pills (heard turmeric was great to consume on a Tim Ferris podcast, didn’t notice any difference) $25
- TRX training straps (to work out at home when I don’t go to the gym. I have used them 4 times) – $52
- Vortex fan (because I was too lazy to keep transferring the portable fan from the bedroom to the second bedroom) – $12
- Trump & Hillary socks, boxing gloves and American eagle mask for a Halloween costume – $53
- Dental cleaning tool kit (I used this cleaning set about 5 times and now it sits at the back of the drawer) – $11
- Pet teeth cleaning kit (my dog hated this product and we are back to using teeth cleaning treats) – $8
- Hand strengthening grips (because I was going to work on my rock climbing finger strength while commuting to work every day) – $12
What was the outcome?
Below is a chart of my monthly online shopping spending for the last 3 years. I have highlighted November and December 2016 and January and February of 2017 as these are the months following my purchasing behavioral change. As you can see the change has helped me reduce spending back down to spending levels from 2014 when we were living off of a single income and a lower salary.
Big discounts for delayed purchases
There is one other benefit to delaying the checkout of your shopping cart. After I started doing this, I noticed websites would send me an email a few hours to a few days afterward with discount codes and electronic coupons to entice me back to their website to purchase the item I left in the shopping cart.
This was surprising at first but it makes sense because companies know there is a high probability of you not purchasing the items in an abandoned shopping cart, especially since the number one factor of abandonment is due to price.
I see this as an opportunity to exploit the marketing shenanigans of retailers to gain an additional 10% to 20% discount when shopping online. Most of the time, online retailers would email me within a few hours of me adding an item to my shopping cart, proceeding to the checkout screen and then closing the browser tab. Sometimes just adding the item to the shopping cart and closing the browser tab was enough to trigger the discount offer emails. The process varies by online retailer, and not all companies do this.
Readers, how do you keep your impulse spending habits under control? Have you used the abandonment strategy to achieve discounts? Feel free to share your story in the comments section below.