What is Shopping Cart Abandonment?
Companies invest so much time and resources to drive traffic to their site. Money is spent on advertising, maintaining a website, and developing new products or services.Where a lot of businesses fall short is understanding how their customer behaves once they finally reach your site. Shopping cart abandonment can have a devastating impact your organisation's bottom line. For that reason, it's essential business leaders understand the meaning and cost of shopping cart abandonment and solutions to reduce cart abandonment rates.
1. What is Shopping Cart Abandonment?
Shopping cart abandonment is when an online user visits your site, adds products or services to the online cart, and leaves the site without completing the checkout process.The key here is that the customer added something to their online cart, so at one point they had the intention of making a purchase, and sometime during their shopping experience, they changed their mind.
E-commerce businesses should pay attention to their shopping cart rate. This rate is calculated by dividing the total number of completed transactions on your website by the total number of transactions that were started but not completed. This rate shows what percentage of your customers begin a purchase but, for whatever reason, don't complete it.
2. Cart Abandonment Latest Stats
Ultimately, cart abandonment is unavoidable. Unfortunately, no business has a 100%conversion rate where everyone who puts something in their online cart completes the transaction. Still, organisations should do what they can to lower their cart abandonment rates.
Understanding the latest statistics of cart abandonment rates will also help companies recognise if their rate is on par with e-commerce averages or is too high. After reviewing44 studies on cart abandonment rates, the Baymard Institute found that the average cart abandonment rate is 69.57% across all industries.
Other important statistics include:
- Mobile users have a higher abandonment rate than desktop users. The average cart abandonment rate for mobile users is 85.65%.
- It's estimated that e-commerce businesses lose up to $18 billion in sales annually from cart abandonment.
3.Main Reasons Why Customers Abandon Carts
There are consistent reasons, across industries and brands, why customers will abandon their shopping cart.
49% of people that abandoned their cart cite unexpected costs as the reason why. This includes shipping fees, taxes, customs fees, and additional charges. Additionally, 17%of cart abandonments say that not being able to calculate their costs upfront caused them to discard the purchase.
Another frequent reason customers won't proceed with their order has to do with various website issues. This includes:
- The site requires customers to create an account to complete the order (24%)
- The check-out process requires too many steps or is too complicated (18%)
- The site doesn't seem secure and there is hesitancy with providing payment information (17%)
- The website has technical issues (12%)
- The site doesn't have enough payment options (6%)
- The customer had to wait longer than three seconds for a page to load (57%)
- Shoppers abandon their cart if they have to re-enter their credit card information or shipping information (55%)
- People abandon their cart because a discount code didn't work (46%)
- Mobile users will abandon their cart because it's too challenging to fill out their personal information (39%)
Lastly, a small percentage of shoppers abandon their carts due to reasons outside of the company's control. This includes:
- 34% of people report they were just browsing and not ready to buy
- 18% just wanted to compare prices between vendors
- 15% opt to buy the item in-person instead
4. How to Reduce Cart Abandonment Rate
Ideally, you want to do all you can to minimize cart abandonment so you can increase conversions and sales revenue. Some easy, actionable tips to improve completed online transactions include:
- Analyze which part of your checkout process shoppers drop off at and see if you can improve this step.
- Reduce the number of steps it takes to check out. Each additional step produces friction in the online buying process and increases the chances of cart abandonment. Improving the checkout process can increase conversions by over35%! Research shows that an "optimized checkout process" can have as little as 12 form elements and 7 form fields.
- Consider auto-fill for addresses
- Allow returning customers to sign in and have everything pre-populated so they can have a quick checkout
- Don't require customers to create an account to checkout; make this optional
- Look at your competitor's checkout process. Is it more simple? Can you copy it?
- Include a progress barometer during the checkout process so customers can see how much further they have to go (i.e., Step Two of Four).
- Be upfront and clear with shipping costs. Also, offer free shipping at a certain threshold.
- Improve site speed, so customers never have to wait long for pages to load.
- Optimize for mobile users. Mobile purchases accounted for 45% of all e-commerce sales in 2020, and that percentage is continuing to rise.
- Make sure your site is secure and trustworthy
- Offer multiple payment options, including payment plans like AfterPay
- Make sure your prices are comparable with your competitors
- Offer quick, easy customer service options for when the customer has questions or technical difficulties. A chat box is often the best option.
- Use retargeting ads to bring back customers who initially abandoned their carts
5. What is a Good Cart Abandonment Rate?
Cart abandonment rates can vary greatly. The Baymard Institute data that compared 44 studies found cart abandonment rates ranging from 55% to 84.27%! The first thing you should do is find your benchmarks. Look at your data and identify your average cart abandonment rate for the last few quarters. After this, simply look to improve that rate. A good cart abandonment rate for your business is one that is continuously lowering.Remember that your cart abandonment rate will never be zero, so all you can do is try to improve.