Key Performance Indicators (KPIs) are the metrics used to measure the performance of a business. Similarly, ecommerce metrics are the KPIs that can help online businesses evaluate their performance, set benchmarks, and take corrective measures to steer the business in the right direction.
In this ecommerce metric refresher, you will learn what is shopping cart abandonment rate, how to calculate shopping cart abandonment rate, why should businesses calculate shopping cart abandonment rate, benefits of reducing shopping cart abandonment rate, and the strategies to reduce shopping cart abandonment rate.
Shopping cart abandonment rate is an ecommerce metric which denotes how many online shoppers add items to their shopping carts but abandon them before completing the purchase. It is represented as a percentage.
The following illustration shows the shopping cart abandonment rate formula:
Let's see how to calculate shopping cart abandonment rate with an example,
Businesses need to monitor their shopping cart abandonment rate to analyse the potential blockage in converting online visitors to customers. Some of the major reasons for businesses to calculate the shopping cart abandonment rate are:
According to the Baymard Institute, the following are the top reasons why customers leave your online store without completing a purchase:
On average, 67.91% of all shopping carts are abandoned worldwide in a year, i.e. $4.6 trillion worth of merchandise. This makes shopping cart abandonment one of the biggest problems ecommerce merchants face, which results in a lot of missed opportunities and lost revenue. Shopping cart abandonment is inversely proportional to revenue. That means, by reducing shopping cart abandonment, you can convert those missed opportunities into conversions and ultimately, increase your revenue.
There are various ways to help reduce your shopping cart abandonment rate, but it is essentially done in one of the two stages:
Customers are more likely to abandon their carts if the checkout process is complicated and time-consuming. While designing your checkout process, make sure it consists of 3-5 steps—the shorter, the better. And try not to include too many fields in a single step. You can also include a progress indicator to eliminate customers' potential worry and assure them that they’re almost done. It will make the process clearer and easier for customers to understand.
You don’t want your online shoppers to get stuck in your checkout page. If they added something in their carts by mistake or need to edit it, make sure it’s easy for them to do so. You can give multiple options to edit their carts such as delete, add or subtract to change the quantity of an item, adjusting shipping options, and more. You can also ensure the navigation between the cart and store is effortless to create an easy-to-buy process for your customers.
The reason for 50% of all cart abandonment is extra costs. For customers, there's nothing as frustrating as reaching the checkout only to discover hidden costs attached to their purchase. As an ecommerce merchant, you can be transparent about all the charges by displaying them upfront.
Free shipping is becoming a standard service which customers expect from online businesses. And customers expect it fast! By offering free shipping and 2-day or same-day shipping, your customers will quickly load up their carts and complete the checkout process.
By offering hassle-free returns and refunds, you can make customers feel confident about buying from you. Frame a returns policy that builds customer trust. And, provide multiple refund options like source account or in-store credits. Moreover, don't make customers dig hard to find the returns policy. Display it somewhere in your checkout process to offset potential hesitation.
You don't want to create an obstacle between your prospects and your sales by offering a single or a few payment options. It would be best if you considered offering multiple payment methods like debit cards, credit cards, UPI, digital wallets, and more depending on the demographics you're targeting.
Customers fill out a transaction form while making the payment. Here, you’re essentially asking them to trust you with their card details. But some customers might be hesitant in taking a step further. You can use this step to build and establish trust by including security logos.
To give online shoppers confidence about their purchase, you can provide a toll-free telephone number or chatbox on the checkout page. It's better to solve their problems or ease their concerns right away rather than giving them the reason to abandon their cart.
Forcing customers to sign up and create an account is sufficient to make them abandon their cart. By giving a guest checkout option, you can offer a frictionless experience to your customers. Plus, these happy customers may also create accounts in the near future to take advantage of your loyalty programs and other incentives.
If you are a new entrant in the ecommerce landscape, building credibility could be a bit challenging for you. To bring down any concerns your potential customers may have, you can display customer testimonials and reviews by existing customers on your online store.
The ecommerce shopping cart conversion rates drop by 7% for every one-second delay in your page loading. It means you need to optimise your checkout page to be as fast as possible. To maintain the balance of quality and speed, you can optimise your images. Additionally, you can limit the use of social plugins, poorly implemented tags, and ad network trackers in order to increase your page load times.
Many online shoppers use their carts as wishlists to save the items they want, not now but in the near future. And, they simply abandon them. Instead of just giving them the option to add to cart, you can provide them with a wishlist to save items for future purchases.
The moment your potential customers are planning to abandon their carts, you can capture their attention using an exit-intent popup. It is displayed when a customer is actively leaving the checkout page.
After your potential customers have abandoned their carts, you can incentivise them with a coupon code or promotional discount. You can send such offers within a few hours of cart abandonment to motivate hesitant customers to complete their purchase.
There's another way to get shoppers back to your store to complete their purchase, i.e. email recovery campaigns. You can set up personalised emails including images of the item they selected, reviews or customer testimonials, free shipping or easy refund policy, and a strong call to action.
2% of online shoppers convert on the first visit, and retargeting brings back the other 98%. Retargeting keeps track of the people who visit your online store and displays retargeted ads when they visit other online stores. You can use the services by Google Ads, AdRoll, or Retargeter to create a retargeting campaign.
Many online businesses are losing out on revenue each day due to cart abandonment. By implementing the right strategies, you can get more online shoppers to complete the checkout process the first time. Even if they decide to abandon their carts, as some always will, you are well equipped to get them back to complete their purchase. In no time, you will be recapturing the might have lost.