Reduce Cart Abandonment Rate: Here’s How

Consumer expectations have certainly evolved over the years, but their behavior remains the same. Picture this scenario: a shopper walks into a physical store, scans the surroundings, picks up something of interest, but suddenly puts it back and decides to leave.

Understanding what triggered them to leave is difficult, but important. It could be a number of factors such as-

• The checkout line was too long
• The price was too high
• They didn't see enough value in the product
• The store's music was annoying 
• etc.

With countless potential reasons for the shopper's departure, determining the exact cause would be impossible unless someone were to ask. This uncertainty predominantly remains an issue for physical stores, but in 2024, knowing why a shopper abandons an online store is getting easier and easier.

By harnessing new technologies, accessible research, and inexpensive experimentation, there's no reason an ecom store can't effectively reduce its cart abandonment rate. That's why we're here today—to delve into the reasons behind this common behavior and explore how businesses can proactively address it.

What is Cart Abandonment?

In eCommerce, cart abandonment occurs when a shopper adds an item(s) to their cart but leaves the website without completing the purchase. Given the expense of getting a user to this part of the funnel, having them abandon the purchase at this point is a gut punch to your bottom line. As a result, understanding and addressing the rationale for this action is crucial for your store’s success.

How to Calculate Cart Abandonment Rate

You've noticed users adding items to their carts, but your completed purchases don't quite match up. If this resonates with you, it's time to calculate your cart abandonment rate. Here are the steps:

1. Determine the number of completed purchases during a specific period  
2. Count the total number of online shopping carts that were initiated but left incomplete during the same specific period.
3. Apply the formula below:

[1 - [ (#) completed purchases / (#) shopping carts created ]] * 100 = (%) Shopping Cart Abandonment Rate

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There you have it – you've calculated your cart abandonment rate. Now, before jumping to conclusions, it's important to note that there is no universal right or wrong cart abandonment rate. Lower is of course better, but don’t get spooked- according to data from the Baymard Institute the average cart abandonment rate in 2023 was 70%. Every business, whether new or established, experiences fluctuations in this metric over time. It's natural. However, whenever possible you should pinpoint the causes of change in order to improve the metric for the long-haul. If you haven’t already, identify your rate, set a benchmark, and start tracking your progress.

How Can I Reduce My Cart Abandonment Rate?

To reduce your cart abandonment rate, it's essential to be aware of common mistakes that can lead to its inflation. While every ecom brand is unique, many tend to encounter challenges in these areas:

Unexpected Costs and Additional Fees:

Hidden charges can turn a happy shopper into a frustrated shopper. As per the Baymard Institute’s data, unexpected additional costs emerge as a leading factor in shopping cart abandonment, accounting for 48% of abandoned carts. When a shopper is ready to make a payment, and their mindset is fixed on a particular price, introducing unexpected fees at the last minute tends to create a sense of inconvenience and breached trust, resulting in a less positive experience.

To avoid losing potential customers, transparency is crucial. Therefore, it is advisable to:

• Avoid unnecessary fees.
• Provide clear information on potential fees like shipping before customers add items to their carts.
• Consider incorporating any additional costs and fees into the displayed price to offer customers a straightforward understanding of the total cost right from the start.

Account Creation:

Typically, checkout is not considered a fun activity. No matter how excited someone might be about a product, the idea of money leaving their bank account is not exactly thrilling. This makes the checkout stage of the user journey exceptionally sensitive.

While operators are always looking to get first-party data from consumers for good reason, forcing users to create an account can be inconvenient and off-putting. The additional time and effort, coupled with the need to remember yet another set of login details, can disrupt the checkout experience.

Some users might find the process annoying, especially if they don't immediately see the benefits of having an account, and there's the added concern of receiving unwanted emails. For those involved in one-time transactions or casual browsing, the request to create an account may seem a bit excessive.

To address this, offering alternatives like guest checkouts should be considered, allowing users to complete transactions without feeling obligated to create an account. This approach focuses on making the user experience more convenient and flexible, potentially minimizing the chances of users leaving the site due to the perceived hassle of account creation.

Complicated Checkout Process:

Similar to account creation, having a complex payment process can also be a real turn-off for users, especially when it involves lengthy forms, extra steps, and confusing navigation. Dealing with numerous fields and steps can make users feel a bit overwhelmed, disrupting their smooth journey toward completing a purchase.

To enhance the user experience, consider following these tips:

• Streamline checkout by removing unnecessary steps.
• Simplify form fields, asking only for essential details for payment and shipping.
• Ensure clear navigation from start to finish, to ensure a quick payment process when customers are ready.
• Offer popular third-party checkout options such as ApplePay, PayPal, AmazonPay, ShopPay, and Google Pay.

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These alternatives provide a quick and efficient checkout, enhancing the chances of conversion and ensuring a positive user experience overall. A Shopify study validates this, demonstrating that integrating the third-party checkout solution, Shop Pay, increased conversions by a whopping 50%.

One important drawback to consider is that your access to customer information, which might later be used for re-marketing, can be reduced to only the bare essentials when using third-party checkout options (which is one reason customers like them).