BUSI 439 Week 1 Group Case Study Project 1 Example

Recovering Abandoned Carts at Ridgeline Outfitters: A Conversion Problem and a Measurable Web Strategy

The Business Problem

Ridgeline Outfitters sells hiking, camping and climbing gear through its website and one store near a national park. The website draws about 52,000 visits a month and converts 1.3 percent of them into orders, with an average order of $118. The analytics tell a sharper story than the conversion rate alone: about 4,100 visitors a month add at least one item to a cart, but only about 680 complete a purchase. Roughly 83 percent of carts are abandoned. The owners have responded by buying more advertising to bring in more visitors, which raises costs without fixing the leak. Roberts and Zahay (2018) describe conversion as the step where marketing spending either pays off or is wasted, and Ridgeline's numbers show that most of its spending is wasted at the last step. If the store recovered even a modest share of abandoned carts, it would earn more than its advertising could buy.

Where Shoppers Leave

The team mapped Ridgeline's checkout funnel from the store's analytics for the most recent quarter.

The largest loss occurs at the shipping and account step, where more than half of the shoppers who started checkout leave. Two things happen on that page. Shoppers see the shipping charge for the first time, which averages $14 on an order below $150, and they are asked to create an account with a password before they can continue. The second largest loss is between cart and checkout, where nearly half of shoppers with items in their carts never press the checkout button at all.

Why They Leave: Research

Research explains both losses. Kukar-Kinney and Close (2010) surveyed online shoppers and found that abandonment was driven by concern about total costs, including shipping, and by shoppers' use of the cart as an organizing and entertainment tool, a place to hold items while comparing prices or waiting for a sale. Many abandoned carts, in other words, were never meant to become orders that day. Close and Kukar-Kinney (2010) found that consumers use online carts for reasons beyond buying, such as saving items for later consideration and tracking prices, and that these uses predicted how often shoppers left items behind.

The shipping charge deserves particular attention. Lewis (2006) analyzed an online retailer's shipping fee policies and found that shipping charges strongly affected whether customers ordered and how much they bought, and that changes to the fee structure shifted customers' order sizes toward thresholds where shipping became cheaper or free. A $14 charge revealed late in checkout turns a $70 tent stake and headlamp order into an $84 order, a 20 percent increase that many shoppers will not accept.

The forced account step adds friction at the worst moment. Shoppers who have just learned the true cost of their order are asked to invent a password, and those still unsure of the purchase have an easy reason to stop.

Problem Statement

Ridgeline Outfitters loses more than half of its checkout starters at a single step that reveals shipping costs late and requires account creation, and it lacks any way to bring back the large share of shoppers who use the cart to hold items for later. The result is a 1.3 percent conversion rate on traffic the company pays to attract.

Conversion and Optimization Web Strategy

The team proposes four changes, each aimed at a cause identified above.

Show Shipping Costs Early and Set a Free Shipping Threshold

A shipping estimate will appear on every product page and in the cart, based on the shopper's ZIP code, so the cost is known before checkout. Orders above $99 will ship free. The threshold sits below the average order of $118, so most orders already qualify, and the finding by Lewis (2006) that customers adjust order size around shipping thresholds suggests that some smaller orders will grow to reach it. A message in the cart will show how much more a shopper needs to add for free shipping, with suggestions such as fuel canisters or trail snacks.

Offer Guest Checkout

Shoppers will be able to buy with only an email address, and they will be invited to create an account after the order is placed, when saving the details is a convenience rather than a barrier. This change removes the password step at the point of greatest loss.

Turn Saved Carts Into Reminders

Because many shoppers use the cart as a holding place, Ridgeline will treat that behavior as an opportunity instead of a failure. Shoppers who have entered an email address will receive a reminder one day after leaving a cart, showing the items and their current prices, and a second reminder after four days if an item's price drops or stock runs low. A "save for later" list will let shoppers keep items without filling the cart, giving the company a clearer view of real purchase intent.

Build Trust at the Payment Step

The payment page will show the store's return policy, a phone number staffed during business hours and recognized payment options, including digital wallets that skip typing a card number. These elements address the security worries the research associates with abandonment.

Measurable Results

If the site conversion rate reaches 1.8 percent on the same 52,000 visits, Ridgeline will take about 940 orders a month instead of 680. At an average order of $118, that is roughly $30,000 in added monthly sales without any added advertising. The cheapest customer Ridgeline can win is the one who has already chosen a product and is standing at the register.

Mobile Shoppers

The funnel looks worse on phones. About 61 percent of Ridgeline's visits now come from mobile devices, but phone visitors convert at 0.8 percent, against 2.1 percent for visitors on computers. Part of the gap is natural, since many shoppers browse on a phone and buy later on a laptop, but part of it comes from the checkout itself. On a phone, the shipping and account step requires typing a name, an address, an email, a password and a password confirmation on a small keyboard, and the shipping charge appears only after all of that typing. The four strategies above help phone shoppers most: early shipping estimates remove the surprise, guest checkout removes the password, digital wallets fill in the address and card in one tap, and reminder emails reach shoppers who meant to finish the order later on another device. The team will therefore report every result separately for phones and computers, so the company can see whether the mobile gap is closing.

Testing Plan

The team does not recommend changing everything at once. Kohavi et al. (2009) offer a practical guide to controlled experiments on the web, in which visitors are randomly split between the current version of a page and a changed version, and the difference in outcomes shows the change's true effect. They caution that many changes believed to be improvements show no effect or even harm results once tested, and that tests must run long enough and on enough visitors to detect real differences.

Following that guidance, Ridgeline will test the changes in sequence. Early shipping estimates and the free shipping threshold will be tested first, since they address the largest loss, with half of visitors seeing the new pages for four weeks. Guest checkout will follow. Cart reminders can run alongside, since they reach shoppers after they leave and do not change the site itself, but a small random group of abandoners will receive no reminder so the company can measure how many orders the emails truly add. The team will judge each test on orders and revenue per visitor rather than clicks, since a change that raises one step's rate but lowers order value is not a win.

Risks and Limits

Free shipping costs money. If the threshold pulls the average order upward, as the research suggests, the added sales should cover the cost, but the company will track shipping expense as a share of revenue each month. Reminder emails can annoy shoppers if they arrive too often, so the program is limited to two messages per cart and honors unsubscribe requests immediately. Finally, the funnel data cover a single quarter, which includes the busy spring season, so the baseline should be refreshed before results are judged. A summer baseline, when campers buy in a hurry before trips, could make the changes look either better or worse than they really are, so the team will compare each month with the same month a year earlier as well.

Team Contributions

Jordan Ellis, as Project Leader, set the schedule, divided the research and wrote the problem definition and testing plan. Casey Morgan, as Technical Writer, built the funnel and results tables, checked APA style and wrote the strategy section. Avery Brooks, as Editor, wrote the research section, combined the three drafts into one voice and checked every figure against the case. On the next project, each member will take a different role.

Conclusion

Ridgeline Outfitters does not have a traffic problem; it has a checkout problem. By showing costs early, removing the forced account, reminding shoppers who use the cart to hold items and reassuring them at payment, the company can raise its conversion rate from 1.3 to about 1.8 percent and add about $30,000 in monthly sales from visitors it already attracts. Testing each change before adopting it will show which ones deserve the credit.

References

Close, A. G., & Kukar-Kinney, M. (2010). Beyond buying: Motivations behind consumers' online shopping cart use. Journal of Business Research, 63(9-10), 986-992. https://doi.org/10.1016/j.jbusres.2009.01.022

Kohavi, R., Longbotham, R., Sommerfield, D., & Henne, R. M. (2009). Controlled experiments on the web: Survey and practical guide. Data Mining and Knowledge Discovery, 18(1), 140-181. https://doi.org/10.1007/s10618-008-0114-1

Kukar-Kinney, M., & Close, A. G. (2010). The determinants of consumers' online shopping cart abandonment. Journal of the Academy of Marketing Science, 38(2), 240-250. https://doi.org/10.1007/s11747-009-0141-5

Lewis, M. (2006). The effect of shipping fees on customer acquisition, customer retention, and purchase quantities. Journal of Retailing, 82(1), 13-23. https://doi.org/10.1016/j.jretai.2005.11.005

Roberts, M. L., & Zahay, D. (2018). Internet marketing: Integrating online and offline strategies (4th ed.). Cengage Learning.