Why Is Shopping Cart Abandonment a Problem for Retailers?
Shopping cart abandonment poses a significant problem for online retailers because it complicates inventory, leaves retailers scrambling to secure potential revenue and reveals a lack of consumer confidence that hasn't been addressed in the marketing and sales processes.Keep reading to learn the main reasons for shopping cart abandonment and how you can decrease it in your online retail business.
What Is Shopping Cart Abandonment?
Shopping cart abandonment describes eCommerce activity where visitors place an item in their shopping cart then leave the page without completing their order. This poses challenges for retailers attempting to manage inventory by accounting for these uncommitted sales. Nearly 90% of shoppers have abandoned a shopping cart online at some point.
Main Reasons for Cart Abandonment
To improve conversion at the end of the sales funnel, it's important to understand why shoppers abandon their carts in the first place.
t's good to know how many shoppers have placed items in their cart without completing their purchase. However, this is just one piece of the puzzle. It's imperative to understand why shoppers don't complete transactions while they're on your page.That's the key to developing working strategies to convert them before they leave the page or soon afterward.
According to Today and many other reports, the COVID-19 pandemic contributed to digital shopping cart abandonment as people found themselves with more time on their hands at home. In addition, during the crisis, shoppers worried about spending money and experienced overall uncertainty due to COVID-19-related anxiety. So, now that the world is reopening, why are online shoppers failing to click the final submit button on orders?
Here are some of the main reasons shoppers ditch sales at the last minute:
- Window Shopping: Some people use online shopping to visualize whether they really want the item. For example, shoppers may look for luxury items or make travel plans virtually without being serious about the purchase. Others engage in pricing out items to set a budget for things like home improvements and preparing for seasonal wardrobe changes. Others window shop out of boredom.
- Comparison Shopping: Online shopping makes it easy to compare prices, features and aesthetics for various products. Visitors may go to several competitors to shop around before determining which product to purchase.
- Budget and Finance Issues: Some shoppers may want to purchase the item but cannot afford the final price. This could be related to high shipping or other unexpected fees that increase the total cost of the product. Others may require financing options to cover big-ticket items.
- Logistics: Some brands require an account to make a purchase. Some shoppers may not want to open an account or provide their personal information.Delivery times can also be an issue, and according to Statista, problems with discount codes and high shipping prices are the biggest factors as to why shoppers don't complete their transactions.
How Does It Affect Revenue and Profitability?
According to Credit donkey, abandoned carts account for $4 trillion in lost sales opportunities. Of course, not every transaction can be saved. However, of this amount,$260 billion (6.5%) could have been recovered.
How do these figures translate to your business? For example, let's say you attract200,000 visitors to your online retail store each month. If the average transaction cost is$50 and you typically convert 0.75% of customers, you could be leaving a lot of money on the table. However, with a slight improvement in your conversion rate of, say 0.25%,you can add $25,000 to your monthly revenue.
How Does Shopping Cart Abandonment Vary by Industry?
It's important to understand how cart abandonment impacts a particular industry. Cart abandonment percentages vary greatly for different types of products and services, according to data from Statista. Services such as insurance have a low abandonment rate of around 70%, while big-ticket items such as automobiles have a high rate of around 98%.
Here are some examples of how shopping cart abandonment varies in different industries:
- Auto industry - 98%
- Airlines, fashion and gardening - about 90%
- Retail, sports and groceries - 83-84%
- Pharmaceuticals - 77%
How to Minimize the Cart Abandonment Problem in Retail
There are several things that you can do to minimize cart abandonment for your online retail store. First, it's important to recognize that the different devices used to shop have higher or lower abandonment rates, as follows:
- Desktop - 73.1%
- Tablet - 80.7%
- Mobile - 85.6%
With this data in mind, it's important to ensure that your sales site and product pages are mobile-friendly, or responsive.
Here are some ideas to help you reduce the cart abandonment rate in your retail store:
- Send recovery emails and texts.
- Use retargeting ads to get them back to your page.
- Send push notifications to remind shoppers to finish their purchase.
Building relationships with customers can also help you save the sale. Some retailers do this by taking a conversational approach on the order page. Here are some ways you can implement this strategy in your eCommerce business:
- Include a bot to engage with customers and answer any questions they may have.
- Develop a robust customer support program that includes brand experts to help shoppers make their final decision.
- Give shoppers the opportunity to talk to a real person about the product.
Moving items from the shopping cart to the order list requires more than pricing strategies and free shipping. By effectively conversing with clients, you can help them decide to buy by providing the support and information they need.