I've been on a mission to understand online buyer behavior, and in this column I'll look at the relationship between the cart value and the shopping cart abandonment rate. What are key price points that trigger abandonment? And can different pricing tactics lead to more conversions without eroding margin? I began my research analyzing a random sample of 264,631 abandoned shopping carts in August 2011, from a cross section of B2C e-commerce sites.

What we already know is that the value of the shopping cart has a disproportionate impact on whether an e-commerce purchaser will buy or abandon. What we have discovered is that it's not a linear relationship and too simplistic to assume this as a general rule. This leads us to conclude that there are three promotional tactics that merchants should test this holiday season to improve conversions:

1. Offer discounted shipping for low cost shopping carts.
2. Set a $99 minimum order for free shipping.
3. Consider specific promotions for individual products with varying abandonment rates.

1. Offer discounted shipping for low cost shopping carts. As might be expected, higher value shopping carts are abandoned more frequently, and as a broad rule, this holds true. Surprisingly though, as you can see in the chart, lower value shopping carts are abandoned often, as well.

What this means for e-commerce sites is that the abandonment rate spikes at key price points. At $100, the spike is the most significant and has the highest volume, but at $250, $400, and $500, you will most likely see similar spikes. These are great break points for offering minimum order free shipping, which will help with the low value cart/high shipping cost problem by encouraging customers to add more items to their carts to reach the free shipping minimum.

We've asked retailers that offer $99 minimum order free shipping how they arrived at that particular threshold. Their answer is that, through trial and error, $99 is the best balance between changing customer behavior and maintaining margin. This data suggests that, from a customer perspective, free shipping just below the critical $100 threshold is well worth testing.

3. Consider special promotions for individual products with varying abandonment rates. Different products get abandoned at different rates, and it's amazing to see the huge difference. For example: two items at the same online retailer both cost $199. You might not be surprised to learn that an item costing $199 is abandoned frequently, at 95 percent of the time. That means that when this item is added to the cart, the item is purchased only one in 20 times.

But figure this. On the same site at a different item, also costing $199, the item is abandoned only 32 percent of the time, and gets bought two out of every three times. While it is worth evaluating the difference between the product specifics between these two items, online retailers should consider special promotions for the item abandoned more frequently.

If both of these products at $199 are frequently abandoned, we highly recommend further examination. Start by building a spreadsheet of frequently carted items and calculate an abandonment ratio for each product. This will help you identify frequently abandoned items and opportunities for specific product promotions, as well as zero in on other opportunities to optimize the copy on the product detail page to secure the conversion.

These three techniques will help to drive conversions this holiday season. If you are able to offer site wide free shipping as part of your peak promotion package, then this will be universally popular. If you cannot, then minimum order free shipping, together with specific incentives for high abandon or lower value carts should prove a successful formula.

Krug is arguably the man who put website usability testing on the map with his seminal book ‘Don’t Make Me Think.’ If you haven’t read it, this is the one book on website design that everyone that has anything to do with websites should read.

Krug is an incredibly likable character. He has a self-depreciating style and dry humor that makes him an engaging and entertaining speaker. As a usability consultant for 20 years, he is naturally an advocate for testing. “My solution for everything is usability testing. Admittedly, I’m a guy with a hammer...” he says, but he is the first to acknowledge that website usability testing is not hard. His mission is to teach the skills to all ecommerce teams, because usability testing should be a continuous process, and “Who can afford to hire a usability consultant all the time?” he asks.

Usability Testing Defined

Krug defines a usability test as “watching people try to use what you create, while thinking out loud. You’re really trying to get the person to verbalize what’s going through their head.”

He’s at pains to point out that usability testing is not a focus group. Focus groups solicit opinions. Usability is about watching people try to do things. The insights come thick and fast in a usability test, when visitors struggle to complete the simplest and seemingly obvious (to the designer) website tasks.

The advantages of usability testing are that you can make a real difference in the way that visitors are able to interact with your website:

• Moves you away from designing by personal biases
• Creates a shared experience for the team, which helps build consensus
• Gives you an ‘ah ha’ moment when the designers realize that their users are ‘not like us’

A/B tests give you different insights from usability tests, because A/B tests are quantifying differences. Usability tests give you qualified insights — there’s no substitute for watching and hearing users describe how they are struggling with your beautifully designed site. It helps you realize that you’ve missed the mark. Krug advises: “Make it a spectator sport for the entire web design team. The act of actually watching people trying to use your stuff makes you a better designer.”

Most websites don’t get tested in this way for two key reasons:

• Money
• Time

Usability testing doesn’t get done because building a website is such a painful process in the first place; it takes too long and costs too much already. There’s an understandable fear that testing will inevitably slow the process down, cost more, and find a whole host of new problems that need fixing.

And it’s true. It will.

Usability testing always produces a huge laundry list of problems. Fixing problems is no fun; it takes far less resources to find problems than fix them. Krug’s advice is to get consensus on the top five problems, not in terms of how hard they are to fix, but in terms of the impact on the site.

Some problems will be harder to fix than others, and some will be easy. Most web development teams will naturally want to check off the easy to fix items. Krug maintains that this is a flawed approach because of the assumption that the bigger problems will be fixed in the next redesign. “The next redesign is like the messiah; when the messiah comes, everything will be fine.” The net results are that the bigger problems often do not get fixed.

Krug’s advice is to work from the top of the list, starting with the most serious problem, irrespective of how hard it is to fix. Then focus on what’s the smallest fix that would solve the problem observed in the usability tests. This is effectively tweaking, painting over the cracks to make the site more usable without any re-architecting. “Tweaking has a bad reputation, kind of associated with duct tape,” Krug maintains, “but tweaking will fix the problem fastest, whereas a redesign will be complex, involve lots of people, and may never happen.”

It’s worth reiterating that the benefits of usability testing significantly outweigh the challenges: making your website more intuitive will have a significant impact on conversions.

John Donahoe, president and CEO of eBay, describes X.commerce as ‘the world’s first open commerce ecosystem. It’s a full stack of tools for developers and merchants to make the new commerce a reality.’

The new commerce that Donahoe is referring to is a world where online, mobile, local and offline are merging at blistering pace. ‘We will see more change in the next 3 years in the way consumers shop and pay than we’ve seen in the previous 15 years. Offline retail hasn’t changed that much in the last 15 years. Ecommerce has been fairly distinct from the offline experience. Smartphones are blurring the lines between offline and online faster than anyone could have imagined.’

Donahoe refers to the new world as ‘not ecommerce — just commerce,’ referring to the increasing proportion of sales that are web-influenced or online — currently more than 50% of all sales.

While you may still think of eBay as an auction site, its intent to become a leader in ecommerce platforms has been clear for a while. Through a sequence of acquisitions, eBay has assembled a powerful collection of ecommerce tools. Yes, eBay is a software company now, as well as a payments company, and a marketplace.

What Exactly is X.commerce?

X.commerce is an integrated ecommerce platform that combines eBay, PayPal, Magento, Milo, WHERE, RedLaser and soon GSI into a single set of Application Programming Interfaces (API’s). It’s not one ecommerce platform, but a pre-packaged integration layer which means that all of the components are pre-integrated. So often software acquisitions are not followed through with the required integration to deliver against the promise. Not so here, and hats off to eBay for pulling this off.

What’s really cool about X.commerce is that eBay has integrated these into an environment where the whole is greater than the sum of the parts. For example, having Milo as part of the same environment enables developers to easily build a ‘local’ aspect to their sites which combines stock availability based on proximity to the visitor.

The combined developer communities of eBay, PayPal and Magento exceed 850,000 developers, and there is already a blossoming Magento app store, though some developers were quick to point out that getting found in the app store is a challenge. Despite this, it is clear that there will be a thriving community of third party applications and tools already integrated with the X.commerce environment.

What It Means for Ecommerce Merchants

In practical terms, X.commerce offers significant benefits to software companies developing commerce tools, as well as to the merchants.  Here, we’re going to focus only on the benefits for merchants. I’ve broken these down into three groups:

Easy Listing on eBay (and Other Market Places?)

Both Magento and GSI have been leading ecommerce platforms before X.commerce. What this changes, however, is that it makes these platforms significantly more attractive to merchants. Pre-packaged integration with eBay means that if you build your ecommerce store on either of these platforms, then you can list on the eBay marketplace in a matter of a few mouse clicks. Select the categories or individual products, and deploy. You’re now selling on eBay.

The X.commerce team is actively looking for other marketplaces to integrate with X.commerce. However, it remains to be seen whether this will happen in practice. Don’t expect Amazon to be integrated anytime soon.

The eBay team is also at pains to pledge that they will never compete with its merchants — a clear dig at Amazon — indicating that their vision is to provide enabling technologies rather than becoming a merchant.

Third Party, Pre-integrated Solution Marketplace

X.commerce already has a vibrant library of third party solutions by virtue of the Magento App store. Given the open nature of what eBay has done, we expect that many more developers will rush to write applications for X.commerce. eBay’s philosophy at the launch event was to nurture its community of developers and encourage them to become entrepreneurs.

This is important for merchants simply because integrating third party tools into an ecommerce site wastes resources. You don’t get anything per se from the integration effort, and if you change providers, you end up with a second integration cost. Pre-packaged integration is a big deal. It enables merchants to focus resources on projects than can deliver direct ROI and gives great flexibility in switching vendors (though not the platform itself).

Integrated Payments

Later this year, PayPal revenues will probably exceed eBay marketplace revenues for the first time. A significant element in the X.commerce strategy is to make PayPal ubiquitous within the Magento and GSI platform communities. Needless to say, PayPal, in all its flavors, is an integral part of the X.commerce environment, making it an easy option (a couple of mouse clicks) for any merchant to deploy in the X.commerce environment.

While X.commerce is strategically important for eBay, it brings significant benefits to both merchants and developers. A vibrant ecommerce ecosystem designed for the new ‘commerce’ that Donahoe refers to, coupled with a refreshing openness, is a clear winning proposition. Support for X.commerce is already strong: Adobe, Omniture, Facebook and others demonstrated slick X.commerce applications as part of the launch. It looks like eBay has a winner on its hands.

• Less clutter
• Less text
• Less information

Less clutter. Visual clutter kills conversion. In many cases, graphic designers, the people actually constructing your pages, can be your worst enemies because they try to do too much with the page. As a result, website visitors have no idea what to look at, or what to interact with, on the page.

If the call to action on your landing page is not obvious, you should radically strip down the page to increase online conversion rates. If there are a lot of bright but unnecessary visual elements competing for the visitor’s attention, you are advised to refocus on the page’s objective and declutter. What do you want the user to do? What’s the next step in the conversion process? Make it obvious to the user, because if it’s not obvious, you are losing money.

Less text. Too much text limits conversion. Landing pages frequently include a lot of text, especially if they are also being used for SEO purposes. Do you really expect people to read all of that information? Of course not. Putting an overbearing amount of information on a landing page basically guarantees that people will not read it. They won’t even begin.

The alternative—less text—can look pretty stark in comparison. Less text, however, makes the call to action much clearer. If you need text for SEO, you can still put it on the landing page; just put it at the bottom where it won’t interfere with a good user experience. People will have to scroll to read that text, but that’s okay. That text isn’t for your users; it’s for the search engines.

Less information. Asking for too much personal information also hinders conversion rate optimization. Marketers tend to ask for too much personal information too early, and they drive up the form and shopping cart abandonment rate in the process. Reverse that trend by collecting only information that is absolutely necessary to complete the specific transaction or form.

For example, you don’t need to ask for a user’s street, city, state, zip and country to let him or her download a PDF. So don’t ask for it. What information is needed for the download? Nothing. If you let users download a PDF without any sort of registration, downloads will increase significantly as a result. If you do want to follow up, however, as most website owners do, collect the minimum information you’ll need for the follow up, such as the user’s name and email address. Collect additional information later, when it’s appropriate—e.g. the mailing address when the user is ready to buy.

If you’d like more information, you can view a 10 minute video of Tim’s presentation (by selecting View SiteTuners presentation), or view a replay of the entire webinar (by selecting View entire presentation), under The Conversion Leaders Summit here.

Other insights are also available from myself on website conversion and recovery of abandoned shopping carts through remarketing; Danny Dover, an SEO expert from SEOmoz.org; and Loren McDonald, VP of Industry Relations at Silverpop, a leading email service provider.

By that I don’t mean that Facebook is going to release a search engine, but that it will become a more important source of traffic than Google for many brands. Not sure? Check out these truly amazing statistics about Facebook: 10 Eye-popping Facts About Facebook.

Still not convinced?

According to Hitwise, since the middle of March, Facebook overtook Google in terms of traffic. In parallel with this meteoric rise, Facebook released a new set of tools for marketers to use to optimize their websites for Facebook traffic.

Move over SEO

Facebook Social Plugins are the marketers ‘Facebook Engine Optimization’ tool kit, which can be easily deployed to drive deeper engagement on websites using Facebook Recommendations, Logins and Likes.

Of these, Facebook Like is undoubtedly high impact –one billion Likes were served in 24 hours following its launch. With Like, Facebook is effectively building an alternative index to the web which is already beginning to give Google a run for its money. As Facebook Like is deployed ever more widely around the web, Facebook’s index of the web, based on Facebook users’ Likes will grow in importance.

Facebook is highlighting some case studies with spectacular increases in referral traffic using Social Plugins:

But while many marketers have understood that Facebook Like is both important and easy to implement, there is only nascent understanding of the broader impact of these Social Plugins.

So here’s my attempt to accelerate that process.

These are the top three Facebook Social Plugins in importance for ecommerce:

• Facebook Like

The Like button lets users share pages from your site back to their Facebook profile with one click. Implementing it on your product detail pages allows your visitors to tag the page with a Like which then shows up on their wall. Depending on how you implement it, they can leave a short comment as well. Since this is at the heart of Facebook’s index, this is really important. If you don’t yet have Facebook Like implemented on your product detail pages, this should be a priority. At its simplest level, it’s just one line of HTML, and just like you optimize keywords for SEO, you need to let visitors Like your key pages.

• Facebook Recommendations

The Recommendations plugin gives users personalized suggestions for pages on your site they might like. What’s amazing is that you can test it out for your site here. Simply enter in your sites web address, and click in the grey panel somewhere (not the Get Code button) and it will show you the recommendations Facebook has already for your site. This works even if you haven’t yet implemented Facebook Like based on what your Fans are saying about you on Facebook and other social media such as Twitter (but all from a Facebook perspective).

Target has not implemented Like or any of the other Facebook Social Plugins (yet), but note how there are already some high quality recommendations, based on fans sharing. Also note how the top recommendation links to hot content, and specifically a product detail page with an ‘add to cart button’ inviting purchase.

• Facebook Login

The Login Button shows profile pictures of the user’s friends who have already signed up for your site in addition to a login button. Facebook Login replaces Facebook Connect, which now has over 100 million Facebook users logging in to other websites. While ecommerce websites have not been early adopters of Login, there is such a good fit that it is inevitable that Facebook Login will be everywhere in ecommerce within a year. Here’s why: 200% more site visitors will log in to their Facebook account on an ecommerce site than create an account. That means three times the number of visitors on your site that are now identified. And when an identified customer doesn’t buy, you can remarket to them, based on what they browsed, looked at in detail and abandoned.

Resources

If you’d like to learn more about Facebook’s Social Plugins, then I can recommend then following:

• Facebook’s Overview of their Social Plugins: developers.facebook.com/plugins
• Facebook’s Social Plugins Showcase with lots of examples in different sectors: developers.facebook.com/showcase/
• SeeWhy’s Conversion Academy On-Demand webcast ‘Leveraging Facebook to Drive eCommerce Revenues’ which is available here: www.seewhy.com/resources_conversion_acad...