Shopping Cart Abandonment: How To Reduce Your Lost Sales

Have you ever added items to your online shopping cart only to abandon them before completing the purchase? You’re not alone. In the world of ecommerce, cart abandonment is an ongoing challenge that affects ecommerce businesses of all sizes. 

Cart abandonment occurs when a potential customer adds items to their online shopping cart but drops out before completing the purchase. Online retailers need to pay careful attention to the shopping cart abandonment rate. It’s an important metric to keep track of because the most obvious problem with cart abandonment is that you’re missing out on a sale, and lost sales equals lost revenue.

In this blog, we’ll dive into the reasons behind cart abandonment, examine its impact on ecommerce businesses, explore how to reduce cart abandonment rates and uncover ways to reclaim those lost sales. 

Why do people abandon their shopping carts online?

Research from the Baymard Institute shows that 70.19 per cent of online shopping carts are abandoned, meaning that the majority of website visitors leave without making a purchase. But why does it happen? And what prompts shoppers to abandon their carts at the last minute? Studies have found that shopping cart abandonment rates peak during the holiday season when sales lure impulsive shoppers to add products to their carts, and later, they abandon their carts because of a lack of shopping intent.  

However, there are several reasons why customers might abandon their online shopping carts. Understanding these reasons is crucial, as it can help businesses devise strategies to tackle this issue. Let’s now look at some of the most common reasons for shopping cart abandonment.  

Mandatory account creation

When shopping online, customers prioritise convenience. Some ecommerce sites require website visitors to create an account to complete their purchase. Needing to create an account at checkout can be frustrating as it demands extra time and effort and can be a hassle for customers intending to make just a one-time purchase. Insisting on account creation can create friction and deter them from placing their order. The Baymard Institute’s research suggests that almost 26 per cent of abandoned carts happen because the site wanted the customers to create an account to complete their purchases. Brands like Lululemon and Lego offer a ‘guest checkout’ option to speed up the process.  

Complicated checkout process

According to a study conducted by Microsoft, consumers have an attention span of eight seconds. In today’s fast-paced digital world, consumers expect quick and seamless online experiences. If the checkout process is lengthy, confusing, or requires customers to input too much information, many shoppers may lose interest or become frustrated, leading them to abandon their carts before completing their purchase. Additionally, slow loading times, pop-ups, or irrelevant cross-selling prompts on an ecommerce checkout page can cause delays, distractions, or interruptions during the checkout process. As a result, online shoppers may become discouraged and decide to abandon their purchase rather than complete the transaction.  

Unanticipated extra costs

Unanticipated additional costs such as high shipping costs, taxes, and other fees at checkout can turn shoppers off, leading to shopping cart abandonment. It can also lead to loss of trust and cause annoyance and frustration. The Baymard Institute found that 48 per cent of shoppers with actual purchase intent abandoned their online shopping carts because the extra costs at checkout were too high. To prevent cart abandonment, businesses must be transparent about extra costs upfront to avoid surprising shoppers at the checkout. 

Limited payment options

Many shoppers have a strong preference for how they would like to pay. If their preferred payment method is unavailable, they are most likely to abandon their shopping carts. They may also not feel confident about the security of their transactions and seek out alternative businesses that offer more flexible payment options. Therefore, businesses must offer a variety of payment methods such as Apple Pay, Google Wallet, and PayPal. You may also consider offering interest-free Buy Now, Pay Later plans for customers to afford larger purchases.   

Security concerns

Shoppers want to feel confident and secure when making online purchases. According to a new survey from Radial, 48 per cent of shoppers abandoned their shopping carts because they didn’t trust the site with their personal information or credit card details. Another study by the University of Bristol found that 96 per cent of consumers would like to prevent their personal data from being shared by retailers for commercial gain. Nowadays, consumers are increasingly aware of the value of their data and protective of how it gets used. If they don’t feel confident and secure when making online purchases, they may abandon their shopping carts. Displaying trust seals, using secure payment gateways, and featuring privacy policies can help build trust and address security-related concerns.  

Long delivery times

Amazon has raised the bar on consumer delivery expectations. Today’s shoppers have high expectations when it comes to delivery speed. They expect fast delivery for a minimum price. A survey conducted by Statista found that 32 per cent have abandoned a purchase because the estimated shipping time was too long. If the delivery times are longer than expected, shoppers may abandon their carts and seek out alternative businesses that offer fast and affordable shipping.

Lack of purchase intent  

Lack of purchase intent is another reason for online cart abandonment. According to the COVID-19 abandoned cart statistics, online shopping cart abandonment rates dropped drastically between 2020-2021. This trend was seen across all industries. The demand for certain items increased, especially for groceries and other essentials. More and more people wanted to buy these products and so they completed purchases. This indicates that the purchase intent of customers was strong.  

Price comparison 

Price comparison is another reason shoppers abandon their carts. Shoppers often add items to their carts to compare prices, features, and options across different websites or platforms. If they find a similar or identical item from a competitor offering a better deal, they may abandon their carts on one site to make a purchase elsewhere. Therefore, businesses should conduct price reviews periodically to keep their prices competitive and attractive. You may also consider offering them special discounts and coupon codes to keep them on your site and encourage repeat purchases. 

How does this impact your ecommerce or dropshipping business?

Shopping cart abandonment is about more than just lost revenue. It can impact your online store in a variety of other ways, which can negatively impact your overall business performance. Let’s now look at some of the most significant problems shopping cart abandonment can cause for your dropshipping business. 

Conversion rate reduction

Cart abandonment represents a potential customer who was once interested in your products but later changed their mind. When shoppers don’t complete a purchase, it directly impacts conversion rates. A higher cart abandonment rate leads to a lower conversion rate, which directly impacts your profit margin. Shoppers may change their minds and abandon their shopping carts for a variety of reasons such as unexpected shipping costs or other fees, complicated checkout, lack of purchase intent, or security concerns. If you want to make more sales, you’ll need to identify problems in your customer journey and test solutions to achieve higher conversion rates for your business. 

Loss of revenue

More sales equals more revenue. Shopping cart abandonment is robbing your dropshipping store of sales. When shoppers abandon their carts and don’t complete their purchases, it results in an immediate loss of revenue. They may also hesitate to return for future transactions, leading to a loss of potential repeat business. Businesses spend money on marketing their products and driving potential customers to their online stores. If no purchase is made, these marketing costs are wasted. Overall, cart abandonment directly impacts a business’s performance by reducing revenue and increasing costs. 

Lack of trust

When a customer adds items to their cart but doesn’t complete the purchase, it signals that there was a problem with either the product, pricing, or website. As your potential customer is experiencing these negative feelings, it may eventually create doubt in their mind about the reliability of your business and lose trust in your business.  

Reduced ROI on ad spend

Shoppers sometimes add items to their online cart because they saw an ad that caught their interest. This could be the ads on social media, influencer marketing, paid media or email marketing. If a shopper then abandons their cart, it indicates that the money spent on ads did not achieve a positive ROI. While some online ads may drive traffic to the ecommerce store and produce a lot of clicks, they may not drive conversions. 

Retargeting cost

When shoppers put things in their online shopping carts but leave the ecommerce site without making any purchases, businesses often use retargeting ads. These ads are part of their abandoned cart recovery strategy. They encourage shoppers to return and complete their purchases. Abandoned cart retargeting is the most effective marketing strategy that helps businesses reach out to customers who abandon their shopping carts. However, retargeting costs are usually higher due to precision audience targeting, personalised messaging, increased competition, multiple touchpoints, and frequent ad exposure.  

Loss in customer lifetime value

Customer lifetime value (CLV) is a metric used to determine the amount of money customers will spend over their lifetime. It takes into account the customer’s initial purchase, repeat purchases, and the average duration of their relationship with the business. If customers visit your online store and initiate a purchase process, it’s most likely that they have enough interest in your product or brand. However, something caused them to abandon their cart. This not only results in lost sales, but you may have also lost a repeat customer, meaning you’ll miss out on all their future business potential and any prospective customer referrals.    

Inventory unavailability

In June of 2020, TikTok users swarmed then-President Donald Trump’s online merchandise store. They added thousands or even millions of dollars in inventory to online carts and decided to not check out. This incident resulted in thousands of items reserved in online carts that could not be sold to other customers, effectively tying up the inventory. Inventory unavailability is one of the major effects of cart abandonment. Customers with genuine purchase intent are unable to purchase their favourite items due to them being out of stock or unavailable.   

Slower website speed

Slow website speeds can negatively impact your conversion rates. A study found that every additional second a site takes to load can cause a 4.4 per cent drop in conversion rates. On the flip side, it has been found that higher rates of cart abandonment can also cause website speeds to slow. This is because the items in the shopping carts might eat up server bandwidth and cause your entire site to slow down.     

How to calculate your current cart abandonment rate?

One of the most important metrics that online retailers should track and measure is the cart abandonment rate. It helps online retailers determine how many shoppers abandoned their carts while shopping online. Abandoned cart analysis is the first step to reducing the shopping cart abandonment rate and boosting conversions. The next step is to conduct a more in-depth assessment to identify the exact cause of cart abandonment. Then, follow up by taking decisive action to solve any issues leading to cart abandonment.  

Let’s walk through a step-by-step guide on how to calculate your cart abandonment rate. 

Steps to calculate your current cart abandonment rate  

While conversion rates focus on successful purchases, cart abandonment rates highlight missed conversion opportunities and help identify areas for improvement. It tells you what percentage of your total number of shoppers add items to their cart, but don’t complete their purchase. To calculate your cart abandonment rate you don’t need to perform complex mathematical equations. Calculating your shopping cart abandonment rate is easy. .  

Here’s how you can calculate your cart abandonment rate.

Step 1: Determine the timeframe

The first step to calculating your cart abandonment rate is to choose a specific timeframe for your analysis, such as a month, quarter, a specific sale event or a new product launch. This will help provide a clear picture of cart activity for that period. 

Step 2: Use analytics tools

To find your shopping cart abandonment rate, you can look at a handful of data sources such as platform analytics or Google Analytics. If you’re a Shopify user, you can easily access all the numbers you need to calculate your cart abandonment rate. You’ll find “Reports” in the “Analytics” section of your Shopify account. If you’re on BigCommerce, you can access its Ecommerce Analytics reports. It provides a comprehensive view of your entire business across all key metrics. Alternatively, if you have enabled the Enhanced Ecommerce feature in Google Analytics, you can access all the numbers in the Shopping Behaviour Analysis report.   

Step 3: Identify the total completed transactions

The next step is to identify the total number of completed transactions. Start by counting the number of successful transactions made on your ecommerce website during the chosen timeframe. You can find this information in your website’s analytics or ecommerce platform. 

Step 4: Determine the total carts created

Once you get a count of the completed transactions, you’ll have to determine the total carts created within the chosen timeframe. Count the number of instances where online shoppers created carts within the selected timeframe, regardless of whether they completed a purchase or not. 

Step 5: Calculate your cart abandonment rate

After you have collected the data, you can calculate the cart abandonment rate using the following formula. 

Divide the total number of completed transactions by the total number of carts created and multiply the outcome by 100. Then, subtract the outcome of the multiplication from 100 to get the abandoned cart percentage for that specific timeframe. 

Abandonment cart rate = 100 - (Total number of completed transactions / Number of carts created x 100)

For example, 

Consider you had 30 completed transactions and 100 total carts created in the selected timeframe. 

Cart abandonment rate = 100 - (30/100 x 100)

Cart abandonment rate = 100 - (0.3 x 100)

Cart abandonment rate = 100 - 30

Cart abandonment rate = 70%

This means your shopping cart abandonment rate for the selected timeframe is 70%.

Step 6: Analyse and improve

The next step is to analyse the reasons for cart abandonment and implement strategies to address these issues and improve conversion rates. 

Here’s how you can analyse the reasons for cart abandonment:

• Look for patterns or trends in your cart abandonment rate over time, such as instances where cart abandonment rates spike. Identifying these trends can help identify potential issues leading to cart abandonment. 

• Analyse your checkout process. Look for areas where shoppers might encounter friction, such as mandatory account creation or excessive form fields. 

• Review the items that are frequently abandoned in carts. This could indicate pricing issues or discrepancies between expectations and reality. 

• Evaluate your ecommerce site’s performance. This will identify technical hurdles such as slow loading times.

• Identify where shoppers are dropping off in the checkout process.

• Use analytics tools such as Google Analytics or look at your platform analytics.  

To boost conversions, you should perform abandoned cart analysis frequently. The frequency of calculating your cart abandonment rate depends on various factors, including the size of your ecommerce business and the volume of transactions. For many ecommerce businesses, calculating shopping cart abandonment rate on a monthly basis is sufficient to track performance and implement strategies for improvement.    

How cart abandonment changes between desktop and mobile devices

Online shoppers often abandon their shopping carts if an ecommerce site is not optimised for mobile devices. Smartphones are changing the way we shop online. According to the eMarketer Insider Intelligence report, mobile commerce remains the preferred channel among consumers worldwide. By 2024, we expect global retail mobile commerce sales to reach nearly $4.5 trillion, making up 69.9 per cent of total retail ecommerce sales. Research has also predicted that over 66 per cent of online shoppers will use their mobile devices to shop. 

Research conducted by Optimonk states that the average cart abandonment rate on mobile devices is 69.02 per cent, compared to 62.11 per cent on desktops. This shows that the shopping cart abandonment rate is higher on mobile devices than on desktops. Despite the increasing importance of mobile commerce, the rate at which shoppers abandon their carts is higher on mobile devices compared to desktops. This raises critical questions: what factors contribute to increased cart abandonment on mobile devices compared to desktops? How does the mobile shopping experience influence cart abandonment rates in comparison to desktops?

Let’s now explore how cart abandonment changes between mobile devices and desktops. Analysing these differences is crucial for understanding user behaviour and optimising the online shopping experience.  

User experience and user interface

Mobile devices and desktops offer distinct user experiences and interfaces. Mobile devices have smaller screens and touch-based interfaces. On the other hand, desktops have larger screens and more precise input methods, such as a mouse and keyboard. This allows for easier navigation and makes the process of adding information during the checkout process more convenient. Shopping online becomes more challenging if the ecommerce store is not optimised for mobile devices. As a result, consumers may abandon their cart and leave the ecommerce site without completing the purchase.  

Browsing and buying behaviour 

Online shoppers exhibit different browsing and buying behaviours on mobile devices and desktops. Desktop users are more likely to engage in product research and comparison before completing a purchase. This can result in lower shopping cart abandonment rates but longer purchase cycles. On the flip side, mobile users are more likely to make spontaneous purchases and quick transactions. This can result in higher conversion rates for impulse buys, but may also lead to higher shopping cart abandonment rates.

Checkout process

The checkout process is a critical component of the ecommerce experience. It determines whether shoppers finalise their purchases or abandon their carts, depending on the experience you provide. The checkout process should be optimised differently for desktop and mobile devices. For desktop users, you may have multi-step checkout or additional form fields to collect customer data. For mobile users, you should have a simplified and streamlined checkout process with fewer steps and auto-fill options to minimise typing on small screens. The one-click checkout process has become more commonplace and allows both mobile and desktop users to quickly complete the purchase process.  

Compatibility and performance

Compatibility issues and site performance can also contribute to shopping cart abandonment. If your ecommerce store is not optimised for mobile devices, it may contribute to slower loading times, layout distortions, and even functionality limitations. This can lead to frustration among your customers, and they may abandon their carts. 

Contextual factors

Contextual differences, i.e. the context in which users access desktop and mobile devices,  can also influence cart abandonment rates. For example, a customer browsing on their desktop during work hours will act differently from a customer browsing on their phone at home during their leisure time. These contextual differences can impact customers’ attention spans, willingness to complete purchases, and overall engagement with the checkout process.

Businesses should closely analyse these differences and understand how user behaviour varies between mobile devices and desktops. They should tailor their strategies to effectively address cart abandonment issues for both mobile and desktop users. This may include optimising the checkout process for mobile devices, implementing device-specific marketing campaigns, improving your website speed, optimising your website for mobile devices, and providing a seamless omnichannel shopping experience to maximise revenue and conversions.  

Strategies to reduce cart abandonment 

Shopping cart abandonment is a significant issue in ecommerce. Online stores bear heavy financial losses due to cart abandonment. Some of the most common reasons behind cart abandonment include unexpected costs, complicated checkout processes, poor website performance, and security concerns. As an online retailer, you need to analyse your shopping cart abandonment data regularly to spot patterns and implement strategies to reduce abandonment rates. Try these 12 proven strategies for reducing shopping cart abandonment rates and driving online sales. 

Improve page load times  

One of the most critical places to boost your site speed is the shopping cart. Slow page load speed can affect your conversion rates. According to a study by Portent, businesses should aim for 1-4 second page load times. The highest conversions occur on pages with load times between 1-2 seconds. Another study by Google found that 53 per cent of mobile website visitors are more likely to abandon a site if the pages take longer than 3 seconds to load. To ensure your website loads quickly, monitor site performance regularly and address any glitches promptly to prevent frustration among your customers and provide a smooth customer experience.  

Optimise for mobile 

Ecommerce has become an indispensable part of global retail. According to Statista, retail ecommerce sales are estimated to exceed 6.3 trillion U.S. dollars worldwide in 2024, and this figure is expected to reach new heights in the coming years. Other research found that smartphones accounted for nearly 80 per cent of all retail website visits worldwide in late 2023. Smartphones also generated the majority of online orders compared to desktops and tablets. As mobile shoppers represent the largest share of all ecommerce consumers, and they abandon their carts at the highest rate, optimising your site for mobile devices can go a long way.     

Simplify your checkout process

According to the Baymard Institute, 22 per cent of online shoppers abandon their carts because the checkout process is too long and complicated. A complicated and confusing checkout process can deter customers from completing their transactions. So you should make your checkout process easy. Streamline your checkout pages by eliminating unnecessary steps. Only have what’s absolutely necessary. Additionally, optimise your checkout process for mobile devices as more and more shopping is done on mobile devices. A seamless checkout experience will drive more conversions and reduce shopping cart abandonment rate. 

Offer guest checkout options

Usually, ecommerce stores require customers to sign up so they can save their details for marketing and promotional purposes. Many customers prefer easy and seamless checkout. For shoppers who wish to sidestep the account creation process, enable a guest checkout option for their ease and convenience. Consider optimising your guest checkout pages by minimising the collection of unnecessary information. Users opting for guest checkout may prefer a streamlined process without submitting extra details. This also reduces the time it takes to check out by removing additional steps.  

Work out your shipping costs  

Display shipping costs and delivery times upfront to avoid surprising customers at checkout. You can display this information on the product page itself. Customers love free shipping. According to Jungle Scout, 66 per cent of consumers expect free shipping on all online purchases, while 80 per cent expect free shipping when ordering a certain dollar amount of purchases. Offering free shipping will make people less likely to reconsider purchasing. If you can’t afford free shipping, provide a built-in calculator to determine estimated costs based on the weight and quantity of items. 

Offer multiple payment options  

Customers may want to use their preferred payment method if it’s more convenient. Consider offering your customers multiple payment options to accommodate different preferences. This way you can reduce cart abandonment rate, attract customers from different demographics, and boost conversions. Some of the most common and secure payment methods in the Aussie market include PayPal, Google Pay, Apple Pay, Klarna, Zip Pay, Credit/Debit card, and Afterpay. Additionally, ensure your payment process is smooth and hassle-free. 

Display progress indicators

Displaying progress indicators on your checkout page offers customers a clear view of their journey. They show what’s completed and what’s pending to finalise their purchase. It reassures customers that your checkout process is fast and simple by showing them exactly how many steps are pending. Additionally, it encourages customers to stay on course, reducing the likelihood of dropping off and ultimately driving conversions and improving user experience.  

Add exit-intent pop-ups

An exit-intent pop-up is a popular customer engagement tool used for cross-selling and upselling. The pop-up appears on a customer’s screen when their behaviour indicates they are about to leave the website, such as when their cursor moves towards the back button. This type of pop-up is designed to capture the website visitor’s attention and present them with an enticing offer, encouraging them to stay on the website and complete the transaction they have initiated.   

Retarget cart abandoners 

Another strategy to reduce shopping cart abandonment is retargeting cart abandoners. It’s a powerful marketing strategy to bring back customers who have abandoned their online shopping carts. You can retarget these customers with social media ads, such as Facebook and Instagram ads. The goal of retargeted ads is to give shoppers a friendly call to finish their purchases.  

Send abandoned cart-triggered emails 

Abandoned cart emails are automated emails that are triggered when a customer abandons their cart. These are basically to re-engage customers who have left items in their cart without completing checkout. Abandoned cart emails can potentially boost conversions and turn a hesitant prospect into a customer. A study by Business Insider found that an abandoned cart email sent within three hours averages a 40 per cent open rate with a 20 per cent click-through rate.   

Use security badges 

According to the research conducted by Baymard Institute, 25 per cent of customers abandoned their online shopping carts because they didn’t trust the site with their payment information. If your ecommerce store suffers from a lack of trust, you may want to invest in ways that can help build credibility and make your customers feel secure. Displaying security badges is one of the many ways to do it. Adding a security badge can make your customers feel confident and encourage them to complete their purchase.  

Incorporate a solid refund and return policy

A good return and refund policy is essential for your business’s success. A complicated return and refund policy can eat up your profit. Ensure your return and refund policy clearly describes your business’s process, policies, and requirements for accepting returns and initiating refunds. The standard return window for most retailers is 30 days. Most retailers don’t accept returns and refunds for custom items. 

Implementing these strategies can enable you to provide your customers with a seamless and hassle-free shopping experience. This can, in turn, help you in reducing your shopping cart abandonment and turn browsers into buyers.  

Summary

Shopping cart abandonment rates peak during the holiday season when sales lure impulsive shoppers. Studies have also found that customers abandon their shopping carts because of a lack of shopping intent. While losses  due to cart abandonment are unavoidable in ecommerce, businesses can implement marketing strategies to recoup lost revenue and regain their competitive edge. Re-engage your churned customers, offer incentives, segment your lists, and craft relevant content to bring customers back to your ecommerce site and encourage them to complete their purchases.