Cart Abandonment Rate

Cart Abandonment Rate: Explanation, Reasons & Calculation

Why do online shoppers ditch their carts? Learn what cart abandonment rate means, what contributes to it, and how to turn abandoned carts into sales.

Often, customers add products to an online shopping cart but move on without purchasing them. In other words, they abandon their carts without finishing check-out. They thus contribute to the shopping cart abandonment rate of an eCommerce business.

What is the shopping cart abandonment rate and why is it important? How to calculate the cart abandonment rate and what are some ways to reduce it? Find out in this article.

What is the Shopping Cart Abandonment Rate?

Shopping cart abandonment rate, also known as checkout abandonment rate, is a metric that measures the percentage of online shoppers who add items to their shopping cart but then leave the website without completing the purchase.

Ecommerce businesses generally do encounter abandoned carts. There are always customers who view products, like them, and add them to their shopping carts – only to give up without completing the transaction for various reasons.

However, it becomes a cause for concern when the shopping cart abandonment rate exceeds a certain value or keeps increasing. In such cases, the metric becomes an indication of underlying problems that an eCommerce business may want to resolve sooner rather than later.

As the abandonment cart rate increases, the loss of sales revenue for eCommerce businesses also increases, which is why it is an important KPI to track.

How to Calculate Shopping Cart Abandonment Rate

To calculate the shopping cart abandonment rate, divide the number of completed purchases by the total number of shopping carts created in a given period. Then subtract this value from 1 and multiply the result by 100 to express it as a percentage.

Shopping cart abandonment rate = 1 - ((number of completed purchases) / (total number of shopping carts created)) x 100

For example, consider that an online store had 1,000 shopping carts created in a given time period. Out of these, 300 carts were completed purchases. The shopping cart abandonment rate would be calculated as (1 - 300/1000) x 100%. In this case, the rate is 70%.

The average shopping cart abandonment rate lies between 68-74%. A rate larger than this is considered a high cart abandonment rate.

Reasons for Cart Abandonment

Some of the most common reasons why shoppers ditch their carts include:

Confusing Website or Checkout: A frustrating website layout with a complicated checkout process can make shoppers second guess their purchases.
Forced Account Creation: Many stores require creating an account to checkout. While this helps with marketing, it can feel like extra work for a one-time purchase.
Hidden Costs: Unexpected shipping fees and taxes at checkout can be a major turn-off.
Slow Delivery Times: Today's shoppers expect fast delivery. Clearly display estimated delivery times on product pages to manage expectations.
Unclear Return Policy: A confusing return policy can make shoppers hesitant to buy, especially for expensive items.
Limited Payment Options: Not having preferred payment methods can deter customers who prioritize convenience and security.
Security Concerns: A dated website design, lack of security certificates, or an unfamiliar brand name can raise red flags for security-conscious shoppers.
Product Availability Issues: Stock limitations or restrictions on purchase quantities can frustrate customers who discover they can't buy what they added to their cart.
Tempting Competition: Online shoppers easily compare prices and products across different stores, leading them to shift over to a competing business with more attractive pricing.
Slow Website or App: A slow website or app with performance issues can damage your credibility and lead to cart abandonment.

Shop owners with high cart abandonment rates should avoid these mistakes. While reaching 1% might be difficult, you can get below the market average in your niche.

How to Decrease the Shopping Cart Abandonment Rate

There are many strategies through which eCommerce stores can bring down their shopping cart abandonment rate. They span several ends of the business operations, from marketing to payment to customer support:

Provide guest checkout: Ofer guest checkout is a practical way to ease the process of purchasing. Customers who do not want to sign up or register their personal details can take this route and complete the transaction.
Offer multiple payment options: Offers several different payment methods, alongside helpful features such as the option to save billing details. Stores may research the payment options their target customer base prefers and make sure to integrate them into their online store.
Ensure cost transparency: Ensure all costs are transparently shown to customers clearly on the page, with breakdown where needed. When shipping costs apply, consider providing an estimate before the customers enter their billing information.
Smooth website navigation: Make sure your store website is smooth and user-friendly. Do not overcomplicate the matter, keep the flow between different steps effortless, and add helpful navigation buttons so that customers are not frustrated into abandoning their carts.
Offer free shipping: Attract more customers by providing free shipping. Where there is a shipping fee involved, customers are prompted to reconsider their decision. It is important as a growing number of online shoppers today expect stores to offer free shipping.
Friendly refund and returns: Make sure to offer a feasible but also customer-friendly return and refund option. This allows customers to develop trust in the brands that they are buying from.
Robust customer support: Customers may have many questions when considering a product and trying to purchase it. Make sure your website offers them the support that they need during this process, for example an updated FAQ page and live chat support.

Key Takeaways

The shopping cart abandonment rate refers to the percentage of customers who, although add products to their carts online, end up terminating the buying process without checking out.
Shopping cart abandonment rate can be calculated by first dividing the number of completed purchases by the total number of shopping carts created in a given period, then subtracting this value from 1, and multiplying the outcome by 100 to express it as a percentage.
Several things may push customers to abandon their shopping carts, such as hidden costs, clunky websites, lack of diverse payment options, and poor customer support.
Businesses can decrease the shopping cart abandonment rate in several ways. These include providing guest checkout, multiple payment methods, free shipping, friendly return and refund policy, and responsive customer support.

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