Online cart abandonment is a primary pain point for any e-commerce brand. With cart abandonment rates around 70% on average on desktop and 80% on mobile, no retailer can escape the many negative effects of shopping cart abandonment on their business.
Online shopping has become more popular than ever with ecommerce sales continuing to grow each year. However, while placing items in an online shopping cart is easy, getting customers to complete the purchase is much harder.
Shopping cart abandonment is a major problem plaguing online retailers, leading to lost sales and revenue. In this article we’ll look at the various effects of abandoned carts and strategies you can implement to reduce it.
What is Shopping Cart Abandonment?
Shopping cart abandonment occurs when a customer places one or more items in their online cart but doesn’t complete the checkout process. This results in the customer leaving the website without purchasing the products.
There are a few key stages in the online shopping journey where cart abandonment happens
- Product page – Customers add an item to their cart but don’t proceed to checkout.
- Cart page – Shoppers view their cart but leave instead of checking out.
- Checkout page – Customers begin the checkout process but don’t complete the purchase.
Abandoned carts can occur on any device – desktop, mobile, or tablet. However, mobile tends to have higher rates likely due to the smaller screen size and typing difficulties.
Shocking Cart Abandonment Statistics
Recent studies have revealed worryingly high shopping cart abandonment rates:
- 70% of online shopping carts are abandoned (Baymard Institute)
- $4.6 trillion in revenue is lost annually due to cart abandonment (Barilliance)
- The average retailer loses $260 billion in recoverable revenue from abandoned carts each year (Shopify)
Additionally, cart abandonment rates are higher for:
- Mobile users – up to 85%
- International shoppers – 86% for Spanish users
- Certain product categories like fashion, luxury, and baby items
With the majority of online carts being abandoned, it’s clear that retailers are bleeding profits from lost sales opportunities.
The Costly Effects of Abandoned Carts
When customers abandon their online shopping carts instead of completing purchases, it negatively impacts ecommerce businesses in various ways:
1. Lost Sales and Revenue
The most obvious effect is lost sales and revenue from orders that should have been captured. Abandoned carts directly translate to money left on the table. Even recapturing a small percentage of carts can significantly boost the bottom line.
2. Higher Acquisition Costs
Since abandonments lead to lost sales, retailers have to spend more on marketing and advertising to attract new customers to their site. This increases customer acquisition costs over time.
3. Impacts Future Purchasing Decisions
Customers who previously abandoned a cart are less likely to return to that site in the future. 72% say a negative checkout experience makes them less likely to buy from the same retailer again.
4. Wasted Marketing Spend
Money spent on marketing to initially drive the customer to the site is wasted if they don’t end up purchasing. Retailers have to continually spend to replace abandoning visitors.
5. Missed Opportunities for Upsells
When customers complete purchases, there are opportunities during checkout to upsell additional products and increase order values. Abandoned carts mean these lucrative upsells never happen.
6. Higher Operational Costs
From online marketing costs to order processing and fulfillment, abandoned carts drive operational costs up since fixed costs are spread across fewer actual orders.
7. Negative Brand Perception
A difficult checkout process can hurt brand reputation over time. Customers may see the site as frustrating to shop on and not worth their time and money.
8. Lower Search Rankings
High bounce rates from cart abandonment can negatively impact search engine rankings, since it signals that visitors don’t find the site useful for their query.
As you can see, the ripple effects of shopping cart abandonment add up, from direct revenue loss to long-term brand reputation damage. Just a small reduction in abandonment rates can significantly improve the bottom line.
Top Reasons Customers Abandon Their Carts
To reduce abandonments, it’s important to first understand the key reasons why customers leave items unfinished:
- Unexpected shipping costs – Additional shipping fees or taxes at checkout often lead to sticker shock.
- Creating an account required – Forcing account creation to checkout deters buyers who prefer guest checkout.
- Too slow delivery times – Customers expect fast, inexpensive or free shipping like Amazon offers.
- Page load times too slow – Slow web pages due to site errors or technical issues leads to exit.
- Too long checkout process – Complicated checkouts with many fields frustrate customers.
- Lack of trust – Security and privacy concerns make buyers uncomfortable providing info.
- No guest checkout – Visitors who prefer not to create accounts abandon their carts.
- Unable to calculate total order cost upfront – Hidden fees and unclear pricing confuses shoppers.
- Limited payment options – Not offering preferred payment methods like PayPal or Apple Pay.
There are clear patterns in the top reasons for abandonment. By understanding pain points in the shopping journey, retailers can take targeted steps to improve customer experience.
7 Strategies to Reduce Shopping Cart Abandonment
Here are proven strategies and tips ecommerce businesses can implement to decrease cart abandonment:
1. Simplify the Checkout Process
Lengthy, complex checkouts with too many fields frustrate customers. Streamline checkout to be fast and hassle-free. Allow guest checkout and offer automated features like autofill.
2. Offer Multiple Payment Options
Provide different payment methods like major credit cards, PayPal, Apple Pay, etc. This caters to customer preferences.
3. Be Transparent with Pricing
Clearly display full costs like taxes and shipping upfront. Add indicators if prices vary by location. Surprise fees drive abandonment.
4. Highlight Trust Symbols
Include security badges, customer reviews, and satisfaction guarantees to build trust. This reassures customers their information is protected.
5. Set Up Cart Abandonment Emails
Reminder emails bring customers back to complete purchases. Time them properly and include incentives.
6. Offer Free Shipping
Entice customers by providing free shipping or setting a minimum order value threshold to qualify. Absorb small shipping costs as a customer retention strategy.
7. Retarget Abandoned Visitors
Use retargeting ads on social media and other sites to reconnect with visitors who left items in carts and nudge them to return.
There are many options retailers have to reduce abandonment rates. Even small tweaks could lead to big revenue gains. Every customer that completes an order instead of abandoning their cart adds straight to your bottom line.
Monitor cart abandonment metrics in analytics to identify high-traffic pages customers leave from. Run A/B tests make incremental changes and find out what resonates with your audience.
The Takeaway
Shopping cart abandonment bleeds profits and hurts ecommerce businesses in multifaceted ways. But armed with abandonment data and an optimization strategy, retailers can facilitate frictionless checkouts to capture more online sales.
Lowering abandonment rates by even a small amount results in significant revenue recovery and Loyal, returning customers. That’s why successful retailers constantly work to understand customer pain points and refine the shopping experience. Adopting these best practices could help you reclaim lost profits from abandoned carts.
What is cart abandonment?
Cart abandonment occurs when a customer adds item(s) to their online shopping cart, but doesn’t complete their purchase. It is different from abandoned checkout which is when a customer abandons their purchase further into the checkout process. Cart abandonment is obviously a lost sale and a missed opportunity to connect with customers. But, the effects of shopping cart abandonment go far beyond the missed revenue opportunity that occurs in the moment. There is a ripple effect that impacts other aspects of e-commerce operations, some of which seem far afield from the e-commerce site. For more insights into the causes of online cart abandonment, read our ultimate guide to cart abandonment.
Loss in customer lifetime value
Customer lifetime value or LTV is one of the most significant metrics for retailers.
Successful brands foster repeat customers in order to drive higher lifetime value. However, when a loyal customer abandons their cart, it potentially decreases the lifetime value of that customer. E-commerce brands can increase customer lifetime value by reducing cart abandonment before it happens and recovering more abandoned carts.
Check out these shopping cart abandonment tools for reducing online cart abandonment.
Many retailers try to combat cart abandonment by offering discounts via an exit-intent pop up or cart abandonment email. While this can be effective in the short term, discounting merchandise in abandoned carts results in lower margins and decreased average order value (AOV). Not only is the brand accepting less money for their inventory, but they are also cheapening the brand or even encouraging more customers to abandon their carts in order to get a reduced price. When there is an abundance of coupons, customers grow to expect them. It also attracts a different, more discount-oriented customer. This downward spiral of promotions results in fewer and fewer customers purchasing items at full price.
Cart abandonment isn’t often associated with supply chain or inventory management issues, but it can cause additional strain on supply chains. The reason is that when items are in a customer’s cart, they are temporarily not available for other customers to purchase. These stock level changes are a major concern for e-commerce retailers. This may not be an issue for a handful of abandoned carts. However, for enterprise brands trying to combat cart abandonment at scale, inventory unavailability can lead to even more lost sales.
This is an ongoing challenge for travel & hospitality websites that always have a fixed amount of rooms or seats available.
The Costly Consequence: Understanding the Effects of Shopping Cart Abandonment
What is the global shopping cart abandonment rate?
Recovery rates average between 2% to 5%. 1. The global shopping cart abandonment rate is 71.42% Around the world, the Asia Pacific region (APAC) has the highest cart abandonment rate at 78.89%, followed by Europe, Middle East, and Africa (EMEA) at 75.04%, and the Americas at 70.63%. The same study averages the global rate at 71.42%.
What happens if a shopper abandons a shopping cart?
The shopper doesn’t initiate checkout and pay for the items in their online shopping cart, effectively “abandoning” them. Every instance of shopping cart abandonment is a loss of a sale, affecting your revenue and profits. You can measure how many people are abandoning their carts by calculating your cart abandonment rate:
How does cart abandonment affect your business?
Every instance of shopping cart abandonment is a loss of a sale, affecting your revenue and profits. You can measure how many people are abandoning their carts by calculating your cart abandonment rate: Collect data on the total number of completed orders and the total number of created carts.
How common is online shopping cart abandonment?
The same study averages the global rate at 71.42%. Baymard Institute collected 49 different studies on online shopping cart abandonment and averaged it at a similar 70.19%.
