What is Cart Abandonment?
Did you know that cart abandonment can be the cause of lost sales that were engaged at your website? If you want to increase your conversions, keep reading what this issue is.
Imagine the following scenario: you are at the mall waiting for your friend to arrive. While you are waiting, you look around in the shops and find some items you like, so you pick them up and continue browsing. Your phone rings, your friend has arrived and is waiting for you at the nearby coffee shop. You hang up the phone put down the items (or ask the shopkeeper to keep them for you for some time) and go meet your friend. Regardless of the exact reason, you have decided to leave those items for now and perhaps come back to them later.
Applied to the online environment, this is cart abandonment – when customers add items to their online shopping cart but exit the website without making a purchase. The cart abandonment rate shows how many of the items that are added to the shopping cart are abandoned. It is calculated with the formula: added to cart/(added to cart+made conversions), (referring to the number of people) or by generating a Google Analytics report for cart abandonment, which uses the same formula.
Sample Cart Abandonment Data
Why should you care?
If your cart abandonment rate is high it means that many of your customers begin their purchase process but do not go through with it. The abandoned items are potential revenue that you are not obtaining as the transactions are not completed, which impedes your goal of maximizing profit.
Indeed, this phenomenon is quite a commonplace, with 65% of retailers having rates higher than 50% according to e-tailing, which means they have the potential to earn double their current profit. It is a major issue, contributing to approximately $18 billion lost revenue per year according to CPC strategy, and a worsening issue, with the average U.S. rates rising from an average of 70.5% to 76.3% in only 3 years, as shown below.
(source: Statista, 2015)
Why do shoppers abandon their carts?
There are numerous reasons for abandoning one’s cart. According to Statista, 2015, the top reasons are the following:
This shows that shoppers consider full transparency of the costs, coupon codes, security in transactions, variety in shipping options and a clear and short checkout process as prerequisites for online stores and necessities to make a purchase.
Other reasons for cart abandonment include return policies and customer service, not intending on purchasing now or being distracted during the process.
So what can you do about it?
- Become knowledgeable of the common reasons for cart abandonment, as some may be prevalent in your online shop and of the most effective solutions.
- Review your website, search for the said reasons in your website and make changes to prevent those features (or lack thereof) from affecting your conversions. For example, offer users a guest checkout option if they currently must make a new user account. You must remember to always measure and track your cart abandonment rates to review changes and strategies. However, those changes are not bullet-proof and are mostly not suitable to motivate customers who do not intend to make a purchase in the first place.
- Use software to encourage customers to complete their transaction in such cases (i.e. conducting research) and post-cart abandonment. Barilliance provides innovative remarketing email software, with personalized templates and recommendations, which has proven to efficiently reduce cart abandonment by 10%-30%.
To learn more about when such software contribute and how they reduce cart abandonment and increase conversion, refer to this Barilliance article.
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