Shopping Cart Abandonment
Shopping Cart Abandonment: When an online shopper leaves items in her cart and does not complete the purchase.
It’s a problem of which e-commerce website owners are well aware – Business Insider calls this “the bane of the online retail industry” – and have fought against for years.
How Big is the Problem?
According to Baymard Institute, the average documented online shopping cart abandonment rate is at 68.55% (as of this article; the list was last updated on December 7, 2015). In 2006, MarketingSherpa conducted a study and found the average shopping cart abandonment rate was 59.8% at that time, which indicates an increase of 10% over the last nine years. However, the research is not so straight forward.
The Baymard Institute list documents 32 studies done over a nine year time period by nearly 20 organizations, each of which was conducted to test shopping cart abandonment rates during a specific time period or for a specific industry.
The highest percentage rate on the list comes from a Rejoiner study done in 2012: 80.30%. (Just for comparison sake, IBM / Coremetrics also ran a study in 2012 – documenting Cyber Monday trends – and found the abandonment rate to be at 61.85% which is relatively low in relation to the other studies in this list.)
Why Do Shoppers Abandon Their Carts?
Just as there are multiple studies done to determine what percentage of shoppers abandon their online carts, there are also myriad reasons why they leave.
Is it a Shopping Cart Issue?
Your first reaction to the stats may be to blame the high abandonment rate on the website shopping cart or the checkout process. After all, it’s complicated! And people don’t really know what they’re doing… right?
Wrong.
Online shoppers are savvy. They understand how to use an e-commerce website (and on different devices, no less). In fact, even in 2006, a study done by MarketingSherpa found that “research indicates the problem may not be in the design of your shopping cart… most consumers are very well trained in the steps of using an online shopping cart.”
Instead, the issues revolve around communication – communicating to shoppers at the right time and with the right message. (We also call this marketing.)
The Problem is Communication
Upon review of many, many studies and articles, it seems that 1) Shoppers need more straight-forward communication from retailers, especially about pricing and security, and 2) Shoppers aren’t really “abandoning” their carts; they’re using them as a shopping tool.
If you’re an e-commerce business owner or digital marketer, this revelation should make you smile. Why? Because you can make a difference – you can actually impact how many people abandon their carts for good and how many follow through with purchases.
Top Reasons for Abandonment
Due to the vast array of studies and articles done on this topic, I’ve covered three of the most common reasons cited by online consumers for shopping cart abandonment in the past ten years.
- Unclear Shipping Costs
Kissmetrics reports that 44% of cart abandonment is because of shipping and handling costs. Shoppers state, over and over again, that they are surprised by shipping costs once they place items into their shopping carts.
The main reason for this may not be the actual costs themselves, but instead, the “unknown” element of the costs, which changes the shopper’s total just before payment.
Entrepreneur: … the single biggest cause of cart abandonment is an unexpectedly high transaction cost – typically a high shipping cost – that is only revealed at checkout.
Retailers must be careful with shipping costs; total costs should make sense to consumers, and all costs should be clearly communicated to shoppers.
Another reason for cart abandonment may be that a shopper cannot find the shipping information and may leave her cart to search for it.
UXBooth: A new customer… will not necessarily know your shipping, returns, and various customer service policies. Once she’s hit the “checkout” button, a number of questions might arise. …if the information isn’t clearly presented at the time of checkout, your customer may leave the page to look for answers to her questions, or she might abandon the site entirely.
The examples given above point to communication issues between online retailers and shoppers. In order for retailers to lower rates due to shipping costs, shipping information must be provided at all stages of the sales process, including the checkout process. (One of the best ways to overcome this barrier to sales is to offer flat-rate or free shipping to all customers.)
2. Security Concerns
An easy-to-solve reason for cart abandonment is security concerns, which is highlighted in McAfee’s study, Digital Window Shopping: The Long Journey to “Buy”.
McAfee: …e-tailers make a mistake by ignoring security issues. In fact, some research shows that for many consumers, security trumps everything—even price.
Also included in its study was a survey of 516 adults which found the following:
- 45% have terminated an order or abandoned their shopping cart due to security fears
- 63% won’t purchase from a site that doesn’t show a trustmark even in an attempt to get a good deal
- 1 out of 3 thinks most websites are risky
- 95% have security concerns when shopping sites they’ve never heard of before
Security is always on a shopper’s mind. Retailers can quickly and easily alleviate this fear by placing trust symbols where the shopper can easily see them.
3. Shopping Cart as a Tool
In its study, McAfee found that 64.6% of shoppers waited one day or more to complete a purchase, indicating that a surprising number of online shoppers are not abandoning their carts, but are, instead, delaying their purchases.
The average delay time: 33 hours.
Business Insider: More broadly, an abandoned shopping cart should be seen as part of the increasingly complex series of steps a consumer might take before finally making a purchase and a strong indicator of consumer interest in a product or a brand. Technology that helps retailers collect and leverage online shopping cart data is likely to be a worthwhile investment.
Many shoppers fill their carts with the intent of returning. A 2009 survey conducted by North American Technographics found the following reasons for cart abandonment:
- Not ready to purchase the product: 33% of men; 38% of women
- Wanted to compare prices: 25% of men; 23% of women
- Wanted to save the products in my cart for later consideration: 16% of men; 26% of women
Each of the reasons above could indicate that a shopper may return to her cart after she abandons it the first time.
Cart Abandonment as Part of the Sales Process
If cart abandonment is an issue for your e-commerce website, don’t be discouraged. First, look into the reasons why shoppers are abandoning their carts. Is it because of “hidden” shipping costs? Is it because your website doesn’t look secure or trustworthy? Those should be easy fixes.
As for shoppers who use their carts as tools – this presents an opportunity. Sales departments should incorporate this into the sales process, and utilize an “abandoned” cart as a signal of a shopper’s location in the sales funnel. An effective way to do this is by marketing automation.
Through marketing automation, companies can effectively reach shoppers and lower the abandonment rate on their websites.
Marketing Automation
Marketing automation is a strategy that e-commerce retailers can use to reduce shopping cart abandonment, leading to increased sales revenue.
How?
For shoppers who abandon their carts as part of their sales journey, nurturing is key. The sales cycle may be short, but it’s still a sales cycle. Ignoring this fact is what causes lost sales in the first place.
Marketing automation removes the huge amount of time that sales would have to invest in nurturing these leads. Instead, drip campaigns designed to guide a lead to make a purchase are used.
Automating your interaction with potential customers saves time and money, and allows a sales department to nurture leads to close without investing unnecessary time and resources into the campaign.
By automating your marketing efforts and focusing on those who have “abandoned” their carts as part of the sales journey, your team may be able to win back a sizable amount of revenue that would have been lost otherwise.
What To Do Now
Shoppers today are different than they were fifteen or twenty years ago. Today’s shopper understands how to make a purchase online, she understands how to use a website shopping cart, she knows what to look for to make sure her purchase is secure. She also understands that she can use her shopping cart as a tool, if necessary, to find out shipping costs (if they aren’t easily found elsewhere) and to “save” items for purchase at a later time.
The job of the e-commerce retailer is to nurture the customer along her shopping journey, providing helpful information and reminders that prompt her to move closer to purchase. The most effective way to do this is through marketing automation, which allows sales teams to nurture large amounts of leads in an automatic way, saving both time and money, and, ultimately, increasing revenue.
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