Ecommerce 101: Cart Abandonment Rate

Did you know that almost 7 out of 10 customers who put items in their cart never complete the purchase? This can be a major problem for online businesses, especially since the average order value is $119. If you're losing that much money to abandoned carts, it's time to do something about it. 

In this article, we’ll discuss some tips that will help reduce your cart abandonment rate and keep more of your customers moving to the finish line of purchasing your product or service.

What is shopping cart abandonment?

Shopping cart abandonment is when a customer puts items in their online shopping cart but then leaves the website without completing the purchase. 

Knowing your cart abandonment rate is important because it can be a major problem for online businesses. There are many reasons why customers may abandon their shopping carts. 

Reasons for Shopping Cart Abandonment

• Not ready to purchase. Customers may not be ready to make a purchase yet and decide to leave the website for later.
• High shipping costs. Shipping costs can be a major deterrent for customers, especially if they were not expecting it.
• Complicated checkout process. A long or complicated checkout process can be frustrating for customers and cause them to abandon their carts. 
• Account creation. Customers who are required to create an account are responsible for 24 percent of abandoned carts. 
• Problems with the website. If the website is not functioning properly, it can cause a poor customer experience leading visitors to leave without completing their purchase.

How is an abandoned cart rate calculated?

An abandoned cart rate is calculated by dividing the total number of completed purchases by the number of shopping carts created.

For example, if you had 500 shopping carts created and 100 completed purchases, your cart abandonment rate would be 20 percent.

Cart abandonment rate formula:

Completed purchases / shopping carts created X 100% = Abandoned cart rate

Five Tips to Reduce Shopping Cart Abandonment

Reducing your cart abandonment rate can be challenging, but it's important to remember that even a small decrease can have a big impact on your bottom line. Here are a few tips to help you get started:

1. Streamline Your Cart Flow

The cart flow is the process a customer goes through, from adding an item to their cart to completing the purchase. It's important to ensure the cart flow is smooth and easy to follow. If there are any complications or disruptions, it can cause customers to abandon their carts.

Reduce Distractions

Your goal is to reduce the number of distractions that take them away from the primary reason they’re on the cart page—to review the products they’re considering buying and determine whether they want to move forward. So be wary if you promote discount codes, free samples or gifts, or cross-sell products. If they are too over-the-top, you may deter visitors.

Simplify Navigation

You also want to make navigation easy. Make it easy for customers to add or subtract product quantities right from their cart. Include a search bar so they can quickly find what they’re looking for. And provide a clear path to the checkout page with a “Proceed to Checkout” button that’s hard to miss.

2. Add Simplicity and Transparency to the Checkout Flow

The checkout flow is the process that a customer goes through, from entering their shipping information to completing the purchase. It's important to ensure this process is as easy and streamlined as possible.

Build Trust

Customers value trust when spending their hard-earned money. Adding transparency to your checkout flow will give customers the confidence they need to make a purchase. This means being upfront about costs, such as taxes and shipping, and clearly displaying your return policy. Move estimated shipping and tax expenses to the cart if possible and add the delivery date range so customers understand when they'll receive the product.

Additionally, using trust signals can help ease customers' concerns about security and increase the chances of them completing a purchase. Common trust signals include logos from trusted payment processors, such as PayPal or Stripe, and security badges from Norton or McAfee. 18 percent of abandoned carts are because of credit card trust issues, so it’s important to be as clear and trustworthy as possible. 

Simplify the Process

You also want to make sure that the checkout process is simple and easy to understand. This means having a single page for the checkout process rather than multiple pages.

It also means keeping the number of form fields to a minimum. Combine the first and last name into one field and make the company name collapsible if it's not a commonly used field. Only collect the information that you absolutely need, such as shipping address and payment information. If possible, make it so the address populates as customers type. 

Be upfront on whether they need to sign in or if they can check out as a guest. Keep in mind that 23% of people abandon their cart when they’re forced to create an account, so make checking out as easy as possible.

When you are requesting information, explain why those fields are important. For example, explain the purpose of the email address or phone number, so they know their information isn’t being used in bad faith.

3. Offer Free Shipping

One of the most common reasons for cart abandonment is extra costs, such as shipping and handling. 48 percent of abandoned carts are because of high extra costs, so saving your customers a few dollars can have a big impact.

Nowadays, free shipping is expected, but customers don’t want any surprises. So be clear with them as early in the funnel as possible about the shipping cost, or make it clear whether it qualifies directly on the product page around the ‘Buy Section’ if possible.

4. Use a Time Countdown

When customers feel like they're running out of time, they're more likely to complete their purchase. This is because of the scarcity principle—when people assign more value to a scarce item or an item in high demand.

You can create a sense of urgency by adding a countdown timer to your cart page. This timer can be for a sale that's about to end or for the last day to get free shipping.

Adding a countdown timer is a great website element to test to increase conversions and reduce cart abandonment. But you want to ensure that you're not using it in a misleading or deceptive way. Otherwise, you risk losing customers' trust.

Here are a few things to keep in mind when using a countdown timer:

• Make sure the timer is accurate and realistic. Don't set the timer for an impossible deadline, such as "ends in one hour."
• Be clear about what the timer is for. Is it for a sale that's about to end? Or is it the last day to get free shipping?
• Don't use the timer as a way to pressure customers into buying something they don't want or need.

5. Use Exit-intent Popups

An exit-intent popup is a message that appears when a user tries to leave your website. When they hover over a separate tab or attempt to close the existing tab, an exit intent popup can be used as a last chance to offer a discount or incentive that keeps them moving through the checkout flow.

How to Combat an Increasing Cart Abandonment Rate

If your cart abandonment rate continues to increase, here are two main strategies to address it:

Pinpoint where abandonment is coming from based on segments that matter to you, such as:

• Is it on mobile or desktop? 
• What traffic source?
• Is there a certain type of user that’s driving it?

Then, where in the customer journey are they abandoning? 

• Is it the Cart or a specific part of the checkout funnel?
• Guest login?
• Shipping section?
• Payment section?

Through this research, you can better understand the problem and may realize it’s a specific subset of the audience and not universal. This will make it easier to identify the fix. Using a website optimization platform can help you easily measure these indicating factors and help you make the changes needed to lower your abandoned cart rate.

Additional Resources to Help You Optimize Your Customer Experience

When you take the time to implement the above five tips, you'll be well on your way to creating a shopping experience that drives people to complete their purchases. Even then, it's important to remember that you should continuously optimize and personalize your website to resonate with your customers as their preferences change. 

For even more e-commerce website optimization tips, check out these resources:

• 5 Optimization Tips to Convert More Browsers to Buyers
• 7 Ecommerce Website Mistakes You Could Be Making (and How to Avoid Them)
• 3 Ways to Optimize Your Shopping Cart Abandonment Rate

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