Shopping cart abandonment is the bane of online businesses with eCommerce brands losing $18 billion in sales revenue each year because of this phenomenon. Considering the huge economic impact, seeking effective solutions to stem cart abandonment is becoming an increasing priority for eCommerce marketers.
What drives shopping cart abandonment, the process when an online shopper adds an item/s to a shopping cart, proceeds to check-out, but then terminates the process without completing the purchase? Research from the Baynard Institute has found that 50% of shoppers abandon carts when they are met with shipping costs, tax, and other fees–the number one reason for abandoned shopping carts. Further, 28% of shoppers stop short of completing the buyer’s journey because the site wants them to create an account, making this the number-two reason shoppers don’t go through with their purchases.
According to the latest UPS Pulse of the Online Shopper report, other factors that contribute to abandoned carts include:
- The customer only wanted to compare prices (29%)
- Customers didn’t really want the product (29%)
- Item is out of stock (28%)
- Estimated delivery times are too long (26%)
- The product was not going to be delivered on time (23%)
- Preferred payment method is not offered (20%)
Collect and Analyze Key Metrics
The key to curbing this practice is figuring out why customers leave without buying, and the first step to remedy this is by leveraging analytics. The data will precisely point why your customers are abandoning their carts so you can implement targeted interventions. It may even allow you to determine other elements of your online storefront that can be refined.
Ecommerce product analytics is an important component of any successful e-store because it keeps track of customer engagements on your site and reveals the reasons why customers leave without buying.
Reducing your shopping cart abandonment rate starts with having a clear idea of your consumers’ reasons for terminating transactions. This is only possible by tracking and measuring several key metrics and KPIs which can determine pain points in the buyer journey. Some of the metrics you may want to consider are:
- Cart abandonment rate. This core metric shows businesses the number of potential clients who leave without buying anything versus the number of carts activated. It can be a critical indicator of poor online store user experience and/or an out-of-stock condition regarding the right color and size.
- Item count in cart. This is the average total number of items consumers place in their shopping carts. This gives you insight into the number of products that are artificially subtracted from your inventory and the potential revenue lost with each abandoned cart.
- Average order value. This is the average total price of the products customers place in their shopping carts and an indicator of the potential revenue missed for each abandoned cart.
- Checkout abandonment rate. This is the percentage of shoppers that leave once they click the checkout button. It can be an indicator of checkout pressure points such as complicated sign-ups or lack of payment methods. With checkout abandonment translating into lost sales of 70%, this is a metric that one should closely watch.
- Email capture rate (ECR). This measures the number of unique website visitors versus the number of new email subscribers you have gained through your online store. By tracking this, you can gauge your ability to follow up with customers who abandon their carts using other communication channels.
- eCommerce conversion rate. This is the percentage of completed transactions on your online store. As an indicator of checkout success, this metric allows businesses to gauge their site’s effectiveness in terms of conversion.
There are other useful data you can collect. For instance, you can take a look at your online store’s load times, your customers’ time to checkout, or your site’s traffic sources. These will help you better understand your shopping cart abandonment rate in the context of consumer behavior and preferences.
Combine Visual Merchandising and Data for Better Insights
Processing the data you’ve collected is just as important as knowing what metrics to track. To gain better insights into consumer behaviors that contribute to shopping cart abandonment, you can consider leveraging visual merchandising solutions like the Smart Merchandiser. With this dynamic tool, you can use analytics overlays alongside your tables, graphs, and spreadsheets.
Smart Merchandiser Analytics Overlay™ visualizes your customers’ click data directly on a product. This enables you to see at a granular level which products are being viewed the most, added to cart, purchased, or abandoned. Using this data alongside visual merchandising allows you to make key decisions about your online store design, such as:
- Design new layout options to highlight products more effectively
- Determine which product colors best support your marketing campaign such as red for Valentine's Day, multi-color and patterns for Back-to-School, orange and black for Halloween
- Gauge whether your catalog requires new photographs or descriptions
- Nail down what focal point each page should have to maximize conversions
Gather Data from Different Sources
Understanding the bigger picture behind your customer data is crucial if you want to stay one step ahead of the competition. Among the best ways to do this is to aggregate data from multiple sources. This allows you to measure different datasets against each other and gain more accurate insights into your consumer data.
To further reinforce your efforts, use tools that can centralize your sources of data. For instance, Smart Merchandiser’s best-in-class visual merchandising functionalities include an integrated analytics system that supports multiple tools. This allows users to manage different aspects of their data management efforts from one workspace. As a result, you are sure that no data falls through the cracks.
How to Use Data to Reduce Shopping Cart Abandonment Rate
Data lets you understand what drives your customers’ purchasing or non-purchasing decisions, empowering you to formulate actionable strategies towards reducing your shopping cart abandonment rates.
Improving Page Load Times
Customers leave websites if they don’t load in less than two seconds. By closely monitoring average load times, bounce rates, and overall site speed, you can determine whether your eCommerce store needs improvement and how you can speed up load times. This, in turn, can speed up transactions and reduce the occurrences of abandoned shopping carts.
Optimizing Your Product Catalog
Data can give you insight into the preferences of your customers. Meaning, you can have a more concrete idea of what products your customers want to see more of, what photos appeal to them, and what layout offers the best user experience. You can then leverage this information and use visual merchandising to optimize your catalogs and ensure that they reflect the desires of your customers.
Streamlining Checkout Processes
Several cart abandonment metrics can help you identify the pain points of your checkout processes that need work. For instance, if carts are abandoned due to a lack of payment options, you might want to consider expanding your payment support structure. If customers have trouble with complex signup processes, you can opt to allow them to checkout without the need to create an account.
Identifying Site Elements That Boost Conversion
Heatmaps, surveys, and purchasing trends provide valuable insights into how your customers are engaging with your site and help you determine which elements of your site they are interacting with. This allows you to gauge what to improve, add, or remove from your online store.
As an example, if you find that website visitors want to learn more about your product beyond marketing spiels, adding customer reviews to product pages may help. On the other hand, if you offer perks that you want shoppers to know about immediately, you can probably experiment with trust badges that display the information prominently on the page.
Make the Most Out of Shopping Cart Abandonment Data
Your cart abandonment rate is one of the most important metrics to monitor as it shows how many customers are interested in your products, are poised to buy, but failing to convert. A high percentage indicates that there may be a disconnect between what people want from their shopping experience and what they actually get when navigating through checkout–which means you're losing out on valuable sales opportunities.
Data analytics eliminates the guesswork and enables you to quickly understand the factors that drive high shopping cart abandonment rates on your eCommerce platform. By addressing these issues fast enough, this metric will help inform decisions about product development and merchandising strategy so more buyers progress smoothly all the way until purchase.
When coupled with visual eCommerce merchandise management tools like Smart Merchandiser–yielding a potent combination of insightful customer information and smart visual planning–you can create online storefronts that drive better consumer experiences and reduce the abandoned cart phenomenon.