In the context of online shopping (ecommerce), a shopping cart is a software (ecommerce platform) that makes shopping (esp. of multiple items at a time) possible on your website / mobile app.
A shopping cart is an online equivalent of the shopping basket you use in grocery stores/shopping malls.
In the offline world, you put all the goods you want to buy in your shopping basket/cart/ trolley and then drive it to the checkout, where a salesperson process your orders, apply coupon codes, add applicable sales tax, tell you the total amount due and then collect payment. In the online world, a shopping cart software does all the jobs of the salesperson and much more:
A shopping cart system/software provides the following functionality to your website/mobile app:
Lets your online customers add one or more products to a shopping basket.
Guides customers, step by step, in completing the checkout on your website.
Processes orders by applying coupon codes, adding applicable taxes, calculating shipping amount and then reporting the total amount due.
Authorises and collects payment, with the help of a payment gateway (like PayPal).
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What are the different types of shopping carts?
There are three categories of shopping carts:
Commercial shopping carts
Custom-made shopping carts
Open-source shopping carts
What are Commercial shopping carts?
Commercial shopping carts are ready-made/pre-built shopping carts. These are usually SAAS (software as a service) products, whose functionality you can borrow by paying monthly/yearly subscription fees.
These pre-built shopping carts can be used to easily build, host and manage your online store.
Examples of best commercial shopping carts:
Shopify – https://www.shopify.co.uk/
Magento – https://magento.com
Bigcommerce– https://www.bigcommerce.com/
3d Cart – http://www.3dcart.co.uk
Volusion – https://www.volusion.com/
What are custom made shopping carts?
As the name suggests, these shopping cart systems/software are custom-made (made to order, bespoke).
What are Open-source shopping carts?
Open-source shopping carts are like a free version of ready-made shopping carts.
But unlike ready-made shopping carts, you can access the source code and can do a great deal of customization on your cart.
Through open-source shopping cart, you can set up your online store for free, provided you are ready to do all of the installation and customization on your own. You can also hire a developer to do the installation and customization for you.
Overall, open-source shopping carts are generally much cheaper to use and maintain than commercial ready-made shopping carts.
Comparing e-commerce Shopping Carts: Commercial vs. Custom Made Shopping Carts
Following are the advantages of using commercial shopping carts over custom-made shopping carts:
#1 You don’t need to hire a web developer to create and maintain your shopping cart.
If you create your own shopping cart, then it would cost you several thousand dollars or even a hundred thousand dollars + you will have to bear the lifelong cost of its maintenance and upgrade, which in itself can cost hundreds/thousands of dollars a month.
#2 Ready-made shopping carts are cheaper and easier to use (in comparison to custom-made shopping carts) + they come with zero maintenance.
All of the maintenance is carried out by the shopping cart provider. You don’t have to worry about maintaining your shopping cart, fixing bugs etc.
#3 You can start using ready-made shopping carts straight away.
Since ready-made shopping carts are ‘ready-made’, you can start using them straight away.
On the other hand, you can use a custom-made shopping cart only when it is bug-free and ready to be used on a commercial level, which can take several weeks or months of rigorous testing.
#4 You can cancel the shopping cart subscription at any time.
Since the majority of ready-made shopping cart providers charge subscription fees, you can ditch their shopping cart, whenever you want, just by cancelling their subscription.
This is not the case with custom-made shopping carts.
Once you have got a custom-made shopping cart, once you have made a huge investment in it, you are stuck with it, whether or not you need it in the future.
#5 Ready-made shopping carts usually come with a lot of extra built-in functionality, add-ons and integration with third-party tools (like Google Analytics, get response etc).
You can take advantage of all this extra functionality at little to no extra cost.
If you try to replicate all of this functionality in your custom shopping cart, then it may cost you tens of thousands of dollars or even hundreds of thousands of dollars extra.
Both in the short term and in the long run, a custom shopping cart is likely to cost you much more than a ready-made shopping cart.
Many shopping carts come with a built-inCMS (Content Management System). For example, Shopify has its own built-in CMS.
Note: You don’t need to create a brand new website, in order to use a shopping cart. You can integrate a shopping cart with your existing website.
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Following are the advantages of using custom-made shopping carts over ready-made shopping carts:
#1 Since it is custom-made, you can get whatever functionality you desire, in your shopping cart.
#2 No need to wait for updates to your shopping cart software
Since you have full control over your shopping cart functionality, you don’t need to wait for updates (quite common in the case of ready-made shopping carts) for fixing bugs or to make your cart compatible with the latest version of a third party tool/CMS.
#3 You get more security and full ownership of your customers and sales data.
A custom shopping cart is usually hosted on your own web server. In this way, it provides more security and full ownership of your customers and sales data.
For government and financial institutions, and for many big companies, data security and customers’ privacy are much more important than the development and running cost of a shopping cart.
So you won’t find them using ready-made shopping carts. Almost all of them use custom-made shopping carts.
#4 You get complete ownership.
When you use a custom-made shopping cart, you actually own your cart, source code, all its design, functionality, database, all of its front and back end systems.
You get complete ownership. In the case of a ready-made shopping cart, you don’t own anything.
You are just borrowing the cart’s functionality. You can use the cart, only as long as you pay your monthly subscription fees.
#5 You can fully integrate your shopping cart with your existing systems
The biggest advantage of using a custom-made shopping cart is that you can fully integrate your shopping cart with your existing systems (CRM, phone call tracking system, accounting software, point of sales system, payment gateways, email marketing platform, data warehouse or any third-party solution).
This is usually not the case, with ready-made shopping carts. If you are using a ready-made shopping cart, you may have to compromise on data integration, system design and functionality.
If you are a large organisation, then custom-made shopping carts provide the best solution.
#6 Customized Reporting
Another big advantage of using a custom-made shopping cart is the customized reporting it provides.
You can choose to get the sales data in the format, that best match your business needs and analytics goals.
If you are using a ready-made shopping cart, then you get generic reporting, which may not meet your business needs and analytics goals.
Advantages of Open-source shopping carts
In the following cases, open-source shopping carts be the best option for your business:
#1 you are just starting out in ecommerce and you don’t wish to invest a lot of money in an ecommerce solution.
#2 you have got developers available who can do the regular maintenance of your shopping cart and keep it running bug-free.
#3 you are planning to create a custom-made shopping cart but you don’t wish to write the shopping cart’s code, from scratch. In that case, you can use the source code of your open source shopping cart and build your cart’s functionality on top of that.
Examples of popular open-source shopping carts:
Open Cart – http://www.opencart.com/ – a PHP based ecommerce solution.
Prestashop – http://www.prestashop.com/-a PHP based ecommerce solution based on smarty template engine.
Zen Cart – http://www.zen-cart.com/
osCommerce – http://www.oscommerce.com/
WooCommerce – https://www.woothemes.com/woocommerce/ – a very popular ecommerce solution for WordPress websites.
Drupal Commerce – https://drupalcommerce.org/
What is Shopping Cart Analytics and what are its advantages?
Shopping cart analytics is the analysis of the shopping cart data.
Through shopping cart analytics, you can understand and fix multi-device and multi-channel attribution issues and accurately track sales data, across devices and platforms. Thus shopping carts play a very important role in conversion optimization.
Therefore it is imperative, to develop a great understanding of what shopping carts really are, how do they work and integrate with third-party solutions like Google Analytics, Google Merchant Center, Salesforce, phone call tracking solutions, etc.
Wrong selection of a shopping cart or the inability to take full advantage of it, can very easily break your conversion optimization efforts, your analytics and even the SEO of your website.
What is Abandoned cart analytics?
Abandoned cart analytics is the analysis of the abandonment of e-commerce shopping carts by website users.
One of the top reasons for high CPA (cost per acquisition) for e-commerce stores is shopping cart abandonment. According to Statista, the following are top reasons for users abandoning your website shopping cart:
By focusing on the top reasons for users abandoning your website shopping cart, you can greatly reduce cart abandonment. The other powerful method to reduce cart abandonment is re-targeting.
How does a shopping cart work with Google Analytics?
Stage #1: A website visitor completes a transaction.
Stage #2: Your ecommerce platform (aka shopping cart) processes the transaction (verify credit card details via a payment gateway)
Stage #3: Your shopping cart stores transaction details.
Stage #4: shopping cart creates an order confirmation page (generally a ‘thank you’ page)
Stage #5: shopping cart insert ecommerce data into the Google Analytics ecommerce tracking code (which is placed on the order confirmation page)
Stage #6: shopping cart sends the order confirmation page to the visitor’s web browser.
Stage #7: As soon as the page is loaded into the visitor’s web browser, the Google Analytics Ecommerce tracking code is executed which then sends the ecommerce data to Google Analytics server.
Google Analytics server then, process the collected ecommerce data and then send it, to your GA account. That’s how the ecommerce data become available in various GA reports.
Payment gateways and shopping carts
A payment gateway is a service/company through which you collect and authorise electronic payments (like debit/credit card payments) on your website.
Ready-made shopping carts do not collect and authorise electronic payments. They use payment gateways for that.
Shopping carts use payment gateways, not only to authorise transactions but also to provide complete online shopping functionality.
Thus it is important that your shopping cart integrates with payment gateways.
Following are examples of popular payment gateways:
Paypal
Authorize.net
Stripe
Shopping carts like Shopify, claim to integrate with 70+ payment gateways.
Types of payment gateways
There are two types of payment gateways:
External payment gateways
Direct payment gateways
In the case of an external payment gateway, a customer has to leave the website and go to the payment gateway website, in order to complete the purchase.
Whereas in the case of a direct payment gateway, a customer can complete the purchase without leaving the website.
If you use an external payment gateway, you are most likely to see self-referral issues, where the payment gateway itself is attributed to the majority or all of the sales in Google Analytics:
Another downside of using an external payment gateway is that you may not see all of the ecommerce data in Google Analytics.
This can happen if a customer does not return to your website after completing his purchase on the gateway website.
When the customer does not return, the ecommerce tracking code, on the order confirmation page is not executed and hence no ecommerce data is sent to GA.
So consider using direct payment gateways.
They will cost you more than the external one but will provide more accurate ecommerce data in Google Analytics.
Can you sell products without using an ecommerce shopping cart?
If you are selling just one item on your website or if you expect only 1 item to sell per transaction, you can then sell products, only by using a payment gateway (like PayPal, Stripe etc). There is no need to use a shopping cart.
Note: If you are selling directly via a payment gateway, then you need to create and host a payment form and then integrate this form with a payment gateway.
But using just a payment gateway for selling online, has its own disadvantages:
#1 Unlike shopping cart software, a payment gateway usually can’t be used to: apply coupon codes, applicable taxes, do shipping rate calculations or keep track of every order.
#2 A payment gateway will send very limited ecommerce data (if any) to Google analytics. So your ecommerce reporting is going to be very limited.
These are the points you need to keep in mind, when you are deciding, whether to use a shopping cart (with payment gateway integration) or just a payment gateway, for selling online.
Conversion optimization features your shopping cart must have
Following are the conversion optimization features which your shopping cart solution must have and/or the features you should consider using straightaway:
Retarget customers who abandoned the shopping cart.
Integrate with multiple payment gateways. More payment gateways mean more payment options available to your customers, which is good for the website conversion rate.
Checkout as a guest.
Set up single page checkout.
Provide discounts (percentage discounts, dollars-off discounts, shipping discounts, group-based discounts) and trackable coupons.
Use a gift certificate for making a purchase.
Set up flash sales or promotions like buy one, get one free.
Set up internal banners
Set up daily deals, referral and loyalty programs.
#2 Integrate with accounting software (like Quickbooks).
Through such integration you can import: sales orders, purchase orders, invoices etc from your shopping cart into your accounting software. You can push inventory out of your accounting software into your shopping cart.
You can automatically and accurately sync all of your shopping cart data with your accounting data and can thus produce very accurate financial reports which can help you in making data-driven business and marketing decisions.
For example, you can integrate both BigCommerce and Shopify with QuickBooks.
#3 Integrate with POS (point of sales) system.
Through such integration you can sync your offline sales data with online sales data, fix your online-offline attribution issues and get a better picture of the customer purchase journey.
Both BigCommerce and Shopify provide integration with the POS system.
#4 Integrate with Google Analytics and Google Tag Manager.
If your shopping cart can integrate with GA/GTM, you can then easily set up ecommerce tracking in Google Analytics.
Almost all popular pre-built shopping carts, provide integration with Google Analytics and Google Tag manager these days. Shopping carts that do not provide such integration must be avoided at all costs.
Once your shopping cart has been integrated with Google Analytics, it can send ecommerce data to Google Analytics server, thus allowing you to analyse and correlate ecommerce data with website usage metrics (like sessions, bounce rate etc) in Google Analytics reports.
#5 Integrate with CRM solutions (like salesforce).
Through such integration, you can track your website customers in your CRM. You can add your website customers as contacts and keep track of their purchasing behaviour.
For example, you can integrate Shopify with salesforce. There are a lot of apps available for such integration.
#6 Integrate with a phone call tracking solution (like Call Tracking Metrics).
Through such integration, you can sync your call tracking data with your shopping cart data. For example, Zapier let you integrate, call tracking metrics data with Shopify data.
SEO features your shopping cart must have (SEO friendly Shopping Cart)
A shopping cart needs to be SEO friendly. An SEO friendly shopping cart lets you:
Customize titles, description and URLs of a web page
Create and manage sitemaps (both HTML and XML)
Create and manage structured data markup
Integrate with Google products (like Google Merchant Center, Google Analytics, Google Tag Manager)
Integrate with product comparison websites (like shopping.com, PriceGrabber etc)
Integrate with email marketing platforms (like getResponse, MailChimp, etc) to provide newsletter subscription feature.
Provide a built-in blog for content development and marketing. (not required, but good to have)
Provides templates that are mobile-friendly.
Provides social sharing features.
Provides the ability to run affiliate programs.
Note: Shopify is one of the best seo friendly shopping carts.
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What are Point of Sales (POS) systems?
POS (or Point of Sale) system is a combination of hardware and software through which offline transactions are carried out in retail/physical stores.
It usually comprises of:
Desktop computer with POS software installed on it.
Cash drawer
Receipt printer
Barcode scanner
Debit/credit card reader
In big retail stores/shopping malls, the POS system can also include a conveyor belt and weight scale.
They often use ‘all in one units’, in which the monitor has got a computer built-in and it uses touch-screen technology.
POS software is used to process transactions, manage product inventory, store customers and sales data, create sales reports etc.
What are the different types of POS systems?
There are two types of POS systems:
Traditional hardwired POS system is used by most retailers.
Cloud-based POS system – It is POS software that can be used and accessed from anywhere via the internet. What that means you can access a cloud-based POS system via any desktop, tablet or mobile device as long as it is connected to the internet.
You can accept POS transactions via mobile phones and tablets.
Shopify provides a cloud-based POS system.
Advantages of using cloud-based POS systems
Through cloud-based POS software you can:
Accept payments anywhere (online, offline, in-store, trade show, via phone, via iPad etc) and then sync it with your shopping cart inventory.
Track debit/credit card payments made using an external card terminal
Track customers’ purchase history (which can include both online and offline purchases).
Accept two or more payments types (like cash + credit card) in a single transaction.
Provide and track gift cards that can be redeemed online or offline (in-store).
Track sales activity of each staff member.
Thus, cloud-based POS systems provide an excellent way to track online and offline conversions and fix multi-device and multi-channel attribution issues.
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