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No matter how smart and hard retailers work to bring customers to their site and lead them throughout the shopping process, only three out of ten shopping carts will actually generate an order. That is a significant amount of lost revenue, especially if the sale winds up going to your competition.
While the vast majority of retailers find shopping cart abandonment a big issue, some see this email automation as an opportunity to gain an advantage against the competition. This article reveals why those issues emerge and how to address them the best way possible.
Before diving into the reasons behind the cart abandonment, it is imperative to first calculate your personal cart abandonment rate. Let’s define what the average cart abandonment rate is and how to calculate it.
How to calculate shopping cart abandonment rate?
The average cart abandonment rate in ecommerce is 70% (Baymard, 2019), although this tends to vary based on which industry vertical you are in. Ecommerce sites selling books and apparel reportedly have lower rates (65%), while categories such as luxury, travel, and others with longer decision-making cycles can experience 80% and higher abandonment rates.
What is the average cart abandonment rate for your brand? You can calculate yours by using this formula:
The main cart abandonment reasons
Year after year, the reasons behind abandoned shopping carts tend to remain the same. These are the seven main reasons collected and combined from the Baymard Institute (2016), Statista (2017), and SaleCycle (2019) data (in descending order).
All these reasons can be grouped into two bundles–the ones that need proactive actions to handle, like a simplified checkout process, and those that require a proper reaction to the cart abandonment that has already happened.
The most often cited shopping cart abandonment reasons
|Needs proactive actions||Needs reactive actions|
|1. Extra costs (shipping, taxes, etc.) are too high||+||+|
|2. Having to create a new user account (too complicated checkout process)||+|
|3. Was conducting research to buy later||+|
|4. Security concerns||+|
|5. Couldn’t find a coupon code||+|
|6. No express shipping available||+|
|7. Returns policy||+|
Things you can do to prevent cart abandonment
Cart abandonment happens for a variety of reasons, and recognizing and overcoming these obstacles to conversion is the only way to decrease your abandonment rate. Some of these obstacles are in the hands of the retailer, while others are in the hands of the consumer. Luckily, there are ways to overcome both. Here are some of the top reasons and suggestions for ways to address these hurdles.
1. Extra costs are too high
This is the most often cited reason customers abandon their shopping carts. In fact, nine out of 10 customers said free shipping was the No. 1 incentive when asked what would make them shop online more often.
You can tackle this issue in several ways:
- Build the shipping costs into the price of the products, and offer free shipping. This way, you will eliminate the most popular checkout blocker.
- Display shipping costs, taxes, and other additional costs on the product page. This way the customer won’t be so surprised on the checkout page.
- Offer free shipping but mandate a higher order value and put a time-sensitive expiration on it (order within the next 30 minutes).
- Leave it as is (this would be for retailers who have no other option) and highlight your other competitive differentiators.
2. Having to create a new user account (too complicated checkout process)
It has to be easy for customers to checkout. Providing a smooth and seamless customer shopping experience is not an aspiration nowadays; it’s a necessity.
Although collecting information about your customers is important for further marketing activities, forcing them to create an account to buy items is a bad idea. It’s an additional step and not all customers are willing to make it.
There are two solutions to address this issue and still have an opportunity to get the information you need for retargeting.
- Consider using a social login feature or the express checkout.
- Let purchasers buy as guests and, at the confirmation stage, ask for information you need, like email, consent to send marketing messages, etc. You could even ask them to finish creating their customer account at this step and can promote reasons for doing so (e.g., saving order history, receiving order updates).
Check out this article from our partner, Bigcommerce, on how to optimize your checkout process.
3. Security concerns
While customers are comfortable shopping online with well-known retailers, a lack of consumer confidence can creep in when it comes to newer, or smaller, online retailers. In these situations, customers may not feel confident providing their personal information.
While it is a good practice for all, lesser-known retailers should look to follow PCI compliance guidelines. This includes displaying security badges, social proof, physical address, and a phone number. Following these practices can help reassure customers that their credit card data will remain secure.
4. No express shipping available
Online shoppers are sensitive to the price and speed of shipping—with the vast majority of them expecting standard shipping to be free. However, if they need items for tomorrow’s celebration, they will be willing to pay extra for that. Offering expedited shipping services to meet customers’ needs can help reduce abandonment rates.
5. Returns policy
Surveys show a generous return policy would encourage 66% of shoppers to buy more. According to the National Retail Federation, 22% of customers back out of the purchase because of a poor return policy. So this is something, retailers shouldn’t underestimate while considering the shopping experience with their brands.
If your return policy is better than your competitions’, use it as your trump card—especially if you offer free shipping. While 90% of consumers “highly-value” free returns, 51% of consumers say they would outright avoid purchasing from online retailers that don’t offer it. Be sure to emphasize it on the site and clearly communicate it in your cart abandonment messages.
Things you can do to recover abandoned carts
Even after optimizing the shopping experience and the checkout page, cart abandonment will still happen. This is where developing a shopping cart recovery strategy is essential.
In addition to the ones already addressed, the other cart abandonment reasons on the list, like “high costs,” “was conducting research to buy later,” and “couldn’t find the coupon code” can be addressed by properly setting up communication after the customer leaves the site. All these obstacles can be at least partially solved with email and SMS reminders and through retargeting. Let’s take a closer look at these tactics.
Abandoned cart series
Abandoned cart email messages can be automatically sent to those shoppers who are your subscribers or have entered their email address during the checkout process. The purpose of such messages is to remind about the abandoned carts and provide them a reason to return to complete their order.
Sending abandoned cart emails is not a new tactic, but the strategy employed by most has failed to evolve with its adoption. Many retailers have resorted to sending a single, non-customized message to recover the lost sale. Their lack of progress is your opportunity.
Creating a series of messages across multiple channels and based on different data is how retailers can maximize recapturing lost sales. Data that can be used to customize abandonment messaging includes the cart total, product(s) in the cart, and purchase history.
For example, by using the products abandoned as a filter, a jewelry retailer could trigger a specific set of messages to customers abandoning an engagement ring versus those who abandoned a pair of earrings. They may also choose not to send SMS reminders to those engagement ring shoppers so as not to potentially spoil the surprise. On the other hand, SMS reminders for the earring shoppers may be the perfect tool to recover the sale. This personalized journey matters.
When thinking through the opportunities this presents, marketers may choose to use three, four, or five emails and SMS messages to recover abandoned carts. Ultimately, the number of messages comes down to the products you sell and what obstacles to purchase they need to overcome within their messaging.
If your brand experiences a high cart abandonment rate and you’re not sending a full series to win customers back, you’re not only missing out on lost revenue but also with improving the customer shopping experience.
Abandoned cart retargeting
This is another powerful tactic in recovering abandoned carts. You place an ad pixel on the checkout page and can remarket to your indecisive shoppers on Facebook and Google. The advantage of retargeting is that it works even if the shoppers haven’t entered their email addresses. But retargeting is more expensive than other marketing channels like email or SMS.
However, by launching an omnichannel cart recovery campaign, retailers can save on retargeting and win on the recovered carts. For example, on the Omnisend platform, retailers can set up automated abandoned cart workflow with integrated Facebook and Google retargeting. In this case, retailers start to recover their carts by sending email and SMS reminders and retarget only those shoppers who don’t convert from those messages, making it a more cost-effective strategy.
See the example below:
The cart abandonment issue is complex and has no single solution. Multiple reasons cause shoppers to leave their beloved items in shopping carts every day.
It’s important for retailers to understand the reasons why consumers choose to abandon their carts and what improvements they can make to overcome those obstacles.
However, it’s impossible to eliminate cart abandonment entirely. This is where a personalized, well-thought out marketing strategy can help bring shoppers back to the store and recapture lost sales.