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Trying to figure out the reason behind shopping cart abandonment? Want to know the effects of card abandonment on your Shopify store?
FACT: The average cart abandonment rate across all industries is 69.57%, that’s huge!
In this article, we will tell you what cart abandonment is and its effects, why people abandon carts, and some best practices to reduce shopping cart abandonment.
Let’s get started.
I. What Is Shopping Cart Abandonment?
Shopping cart abandonment is when a potential customer chooses not to complete a purchase after adding the item to their cart.
In an ecommerce business, a virtual shopping cart is where customers put in the items they desire to purchase.
However, if an item is added to the cart yet never makes it through any transaction, it’s considered ‘Abandoned’ by the shopper.
Doesn’t matter if you’re a novice or a successful venture. You’re bound to face shopping cart abandonment at some point. And so, it becomes increasingly important to measure the rate at which customers are abandoning their carts.
Shopping cart abandonment rate can be calculated by dividing the total number of transactions completed by the total number of transactions that were initiated.
The answer to this simple equation will help you figure out what percentage of customers are showing purchase intent yet not completing the transaction.
II. Average Cart Abandonment Rate and Its Effects
Is cart abandonment a major issue for online retailers and businesses, you might wonder?
Well, stats have their say here.
In 2021, almost 80% of online shopping orders were abandoned, i.e., not converted into purchases.
That means – every 8 out of 10 shoppers pulled off from purchasing products at the very last stage of their buying cycle.
In terms of money, cart abandonment costs ecommerce sites a staggering $18 billion in annual sales revenue.
It’s just not about the monetary loss. The cost of shopping cart abandonment goes beyond that.
Let’s look at some of the other repercussions suffered by ecommerce stores due to cart abandonment.
01. Lost Customer Lifetime Relationship Value
There’s a high possibility that your one-time customers can become regular customers. Only if they feel attached and engaged with your brand.
Customer lifetime relationship value is a metric to predict the overall profit margin your company can expect from a customer throughout the relationship.
It’s a crucial metric for ecommerce stores because it gives a direction to the marketing campaigns and strategies built to obtain short and long-term business goals.
Customers that abandon their online shopping carts are worth more than just their first purchase – your one-time customers might become your regular customers and probably care to bring in their connections to your business.
Recovering an abandoned cart can be worth thousands of dollars and not just the average order value.
02. New Customer Acquisition Costs
Did you know in the last 5 years, the new customer acquisition costs have increased by 60%?
That’s because most ecommerce businesses spend countless money on several ad campaigns and perform types of marketing – content marketing, social media marketing, and influencer marketing; to stay on top of the game.
But just because these marketing efforts drive traffic, doesn’t mean they generate sales.
When your customers make it through your sales funnel and don’t convert, you don’t get back your desired ROI from your marketing efforts.
You don’t realize that those customers aren’t finishing the purchase process – you’re losing them to cart abandonment.
Recovering those lost conversions can improve your acquisition costs and provide more accurate data about ad effectiveness.
03. Manipulated Ad Click-Through-Rates
Unfortunately, your shopping cart abandonment rate cannot be nil (zero).
Most of your online shoppers will be visiting your store with literally no buying intent. Some may just be checking the prices or educating themselves about the product’s key features.
Every time this happens, it creates history and cookies that can mislead your ad targeting. The ad platform, like Facebook, identifies those temporary users as engagements and delivers ads to more people that look alike those users.
These abandoned carts add up as inactive audiences in your target audience data. Hampering your campaigns and ad results in the long run.
As a result, your clickthrough rate and ROAS can plummet as you inadvertently target users with no intention of converting.
III. Why Do People Abandon their Shopping Carts?
Almost 49% of shoppers abandon their shopping carts due to overhead charges. That said, we’ve curated a list of 7 good reasons why shoppers abandon shopping carts.
01. Lack of Trust
How often do you provide your credit card details to a website? Not until you trust the company, right?
You need to gain the trust of your visitors via social proof and promoting brand awareness.
Present them with customer testimonies, successful deliveries, a customer-friendly return policy, to show then you’re a credible source to buy from.
02. Complicated Checkout Process
The average US check-out process contains 23 form elements by default – it starts with filling in your name, and ends at credit card details.
Clearly, if your checkout process is too complicated or time-consuming, it creates a terrible impression of your store.
Make the checkout process painless and simple to avoid this.
03. High Shipping Costs
As mentioned earlier, high shipping costs or overhead charges at checkout are why 49% of shoppers abandon their carts.
It not only gets your customers by surprise but also harms your customer’s trust in your pricing.
Eventually, they will not hesitate to face your competitors for a better deal. So, try offering free delivery to avoid higher cart abandonment.
04. Lesser Payment Options
Suppose you pay for all your online purchases via a credit card. And while purchasing from a certain store, you are asked for a debit card.
Won’t you hesitate for a minute there?
Customers have personal preferences for making payments and will only purchase if their preferred payment option is available.
Try integrating your target audience prefered payment options into your store.
05. Technical Issues
Technical glitches are another major factor for higher cart abandonment. While it’s known that technical fault affects all technologies, you should regularly test your checkout process for any bugs or errors.
Moreover, you may also test for the loading time of your checkout page, as customers won’t wait more than two seconds before switching to your competitor’s website.
06. Asked For Account Creation
Customers want a fast and friction-free checkout process. And adding an extra step to their buying cycle might turn them off.
More than 24% of people abandon their shopping cart because they were asked to create an account.
So, if you really need any information for remarketing purposes, ask them on the confirmation page right after the transaction is completed.
07. Longer Delivery Time
In the era of same-day delivery, don’t be the 7-day guy.
Customers want their products to be delivered ASAP. If you want them to wait for something which they paid for. That isn’t happening.
If not the same day, try expanding your warehouses and logistics support to guarantee delivery in 2-3 business days.
IV. How to Reduce Shopping Cart Abandonment Rate?
Shopping cart abandonment can arise from multiple factors. Hence, it’s a complex problem with no simple solution.
If you’ve researched ways to reduce cart abandonment rate, most articles focus on one key metric: Optimizing your checkout flow.
While this is great advice, we didn’t want to reinvent the wheel. And so here are some proven tips to reduce the shopping cart abandonment rate across your website.
01. Offer Free Shipping
Since we know that most customers abandon their shopping carts due to unexpected delivery charges, it’s a wise decision to offer free shipping.
At times, the shipping cost of a product is higher than the original product price. Why would a savvy shopper opt for it?
Even if you’re unable to provide free shipping for every product, you must be transparent about how and when a customer is eligible for free shipping.
For example, Burga, a Shopify store selling mobile cases and other such accessories, has made it crystal clear as to when a customer is eligible for free shipping.
Moreover, they have dedicated a specific page informing customers about their delivery charges and time for specific geo-locations.
Tips When Offering Free Shipping
- If you have a predefined shipping policy, make sure to present it on your website
- Be transparent about when and how a customer is eligible for free delivery
- It’s recommended to charge shipping for low-value products and offer free delivery for high-value products
- Offer free shipping at a minimum order value or minimum product value (whichever is feasible for your store)
02. Allow Guest Checkout
Majority of customers, especially first-time shoppers, hesitate to create an account when buying online.
It’s like visiting a physical store and spending more time on billing than what you spend shopping for the product. Things even worsen when the store asks you to create a membership card before providing the product.
However, enabling a guest check-out option in your online store can significantly reduce your cart abandonment rate.
Big brands like Crate & Barrel offer guest checkout for first-time customers.
Guest checkout is more about valuing your customer’s time and providing them with a friction-free shopping experience.
According to a study conducted by Endless Gain, you are more likely to reduce shopping cart abandonment by simply adding guest checkout to your store.
The experiment concluded that the easier you make it for your customers to buy, the more they will, and vice versa.
Tips When Allowing Guest Checkout
- Offer regular Sign-In process for regular customers, while guest checkout for first-time shoppers
- Match your customers’ mental model and increase their sense of freedom to motivate them to purchase more
- Ask your customers to signup later when they have completed the purchase
03. Offer Alternative Payment Methods
Gone are the days when customers used a long card number to make purchases or felt delighted by a store accepting card payments.
Now, it’s more of a click-and-pay that amuses them.
Around 7% of customers abandoned their shopping carts because of limited payment options by an ecommerce store.
Some of the most popular payment methods are:
- Shopping apps (Shop Pay, Paypal)
- Digital wallets (Apple Pay, Amazon Pay, Google Pay, and Samsung Pay)
- Buy now, pay later (Shop Pay Installments, Klarna, and After Pay)
Allowing customers to pay in installments is also an attractive payment option, that’s why ‘buy now and pay later’ payments increased by 215% in 2021.
Who doesn’t prefer having choices? Offering multiple payment methods increases the trust of customers. They feel safe when purchasing online via their preferred payment option.
Tips When Offering Alternative Payment Methods
- It’s always a good practice to offer a mix of multiple payment methods
- If you have international customers, try integrating the most popular payment options in their region
- Reach out to third party payment processors like RazorPay to secure your checkout process
04. Use Exit Intent Pop-Ups
Exit intent pop-ups are probably an advanced way to use customer behavioral intent to your advantage.
The term ‘Exit intent’ means tracking website visitors’ mouse movements and scrolling behavior to identify when a visitor is willing to leave your website. When identified, a pop-up is displayed on the screen with an irresistible offer or coupon.
Pursuing your customer via eye-catching offers while they are actively leaving your checkout page can significantly reduce cart abandon rates.
Here’s a fantastic example of exit intent pop-up by FashionNova, one of the top Shopify stores.
They have used a simple strategy – 10% off for sharing your email. Moreover, we loved how they used creative CTAs to bait customers’ subconscious minds (in a positive way, of course).
Tips When Using Exit Intent Pop-Ups
- Make sure you put exit pop-ups on every web page to reduce cart abandonment rates; although, they are most effective on checkout pages
- Provide an attractive offer/coupon/discount and use strong CTAs with minimal texts in the pop-up
05. Make the Checkout Process Hassle Free
The more complex your checkout process is, the less likely are users to complete it.
That said, while shortening your checkout process, make sure you don’t pile up too many fields on a single page. That looks unattractive as well!
It’s best to research your competitors and see how they are following up with a simplified checkout process for their stores.
ElasticPath conducted an experiment in which an A/B test was performed on multiple-page and single-page checkout processes. Conclusively, single-page checkout yielded far better results.
As per the result, the single-page checkout outperformed the multi-page checkout by a whopping 21.8%. Although exceptions are always a deal-breaker, multi-page checkout can be more efficient in some rare cases.
But, if you want to reduce your shopping cart abandonment rates, this is something you must consider.
In terms of revenue, $260 billion worth of lost orders are recoverable solely based on a better checkout flow and design.
Tips to Make Checkout Process Hassle Free
- The checkout process should be between 3-5 steps. The shorter, the better.
- Use A/B testing on your store’s checkout page to identify what works best for you
- Even if you shorter the process, make it simple and clear by not adding too many fields for the sake of information
06. Show Clear Progress Indicators
It’s a matter of seconds until your customers get tired of flipping pages and filling out checkout forms, not having a value when they’ll be done.
Unfortunately, they might not care enough to flip another page and just switch to your competitors.
Progress bars are specifically designed to improve the quality of your checkout process. It lets your customers know where they’re in the checkout process.
However, progress indicators are not a big deal, but anything that eases your buyer journey plays a crucial role in reducing shopping cart abandonment rates.
For example, Decathlon, a one-stop online store for all your sports needs, has added a simple progress bar to its checkout page.
shopping cart abandonment effects
The bar tells the customer how many steps he has to cover to order the product finally– Cart > Customer details > Shipping Details > Payment.
Let’s not forget about the Express Checkout, which offers customers with the one-click checkout process and is among the prominent ways to reduce cart abandonment rates.
07. Reduce Load Time Across Web Pages
Apart from addressing other factors, one must know that the journey of reoccupying abandoned carts doesn’t start from the checkout page.
The entire buyer cycle influences the purchasing intent of your potential customers. And so, reducing high abandonment rates is deeply rooted with a high-performing website (ecommerce platform).
How long are your customers willing to wait for your web pages to load? The answer is less than 3 seconds.
Several factors make your website slow, such as:
- Too much flash content
- Inadequate caching
- Too many ads
- Poor CDN service
- Bad hosting
Your website might be running slow due to one of the factors mentioned above.
Additionally, since mobile and tablet users record the highest abandonment rates, building a mobile-friendly store is a must.
If not, you’re likely contributing to higher cart abandonment rates.
Tips to Reduce Load Time Across Web Pages
- Regularly test your website pages for loading time and coding errors (use Google page speed insights ot GTmetrix)
- There are several dedicated ecommerce hosting providers in the market. Choose the one that provides performance optimization services bundled in the price of the hosting
- Timely caching of your website drastically improves performance
Read more: How To Optimize Page Speed For Your Shopify Store: Technical Advice From CTOs (2021 Updated)
08. Optimize Abandoned Cart Emails
Writing impactful cart recovery emails is critical for reducing shopping cart abandonment rates. In fact, it’s the most important step in recovering abandoned carts.
These emails are quite similar to retargeting ads, they collect data from the website like which items were added in the cart, the size, the color, and so on. And then, use these details to send an email reminder to complete the purchase.
Cart recovery emails have an open rate of 45% – much higher when compared to general emails which is around 18.39%.
Moreover, one in five recipients are likely to engage with your retargeting emails. Hence, when sending cart abandonment emails, there’s a high probability to get back at least a handful of customers.
Tips to Write Cart Abandonment Recovery Emails
- Know what product(s) the customer has left in their cart
- Try keeping your mail clean, crisp, and filled with attractive offers
- Give them a discount to persuade them to complete the checkout
- Timing is the key, send cart recovery mail within the first hour of cart abandonment
V. Conclusion
After going through the article and the statistics mentioned in it, it’s evident that shopping cart abandonment is a major issue for ecommerce stores.
An issue that holds the power to make or break your business and should not be neglected at any cost.
The good news? It’s preventable.
As we discussed earlier, reducing your cart abandonment rate is a complicated process, but not impossible.
The above mentioned tips will immensely help you reduce your abandonment rates and recover your lost revenue.
