The Ultimate Guide to Calculating the Shopping Cart Abandonment Rate Formula
Are you concerned about the number of customers abandoning their shopping carts on your e-commerce platform? According to Statista, an average of 69.8% online shoppers abandoned their carts before completing a purchase in 2020.
This easy-to-follow guide will teach you how to calculate and understand your Shopping Cart Abandonment Rate, ultimately helping improve those numbers for good! Ready to transform clicks into successful transactions? Let’s dive in!
Key Takeaways From This Article
- Shopping Cart Abandonment Rate is the percentage of customers who add items to their cart but do not complete the purchase.
- Tracking and calculating this rate is important for understanding potential revenue loss and customer behavior in ecommerce.
- To calculate the Shopping Cart Abandonment Rate, use the formula: (Number of Carts Abandoned / Number of Carts Initiated) x 100.
- Factors contributing to high abandonment rates include unexpected shipping costs, price comparison, and a lack of payment options.
- Strategies to reduce shopping cart abandonment include streamlining the checkout process, offering multiple payment options, and providing clear shipping and return policies.
Understanding Shopping Cart Abandonment Rate - Definition
Shopping Cart Abandonment Rate (SCAR) is a vital metric in the world of e-commerce, especially for those who are new to this exciting digital realm. SCAR refers to the percentage of online shoppers who add products to their virtual shopping carts but then leave the website without completing the purchase.
Importance of Tracking Shopping Cart Abandonment in Ecommerce
Tracking shopping cart abandonment in ecommerce is crucial for understanding potential loss in revenue and gaining insight into customer behavior.
Potential loss in revenue
Your money may go down if the shopping cart is left. This is called potential loss in revenue. You could be making more money from your sales. But when a customer leaves their cart, that sale is lost.
Online stores need to keep track of this.
By looking at the Shopping Cart Abandonment Rate, they can find out how much money they are not getting. It helps them see the lost sales as a percent value. They can then work out how much extra money they could have made.
Insight into customer behavior
Shopping cart data gives key info on user behavior. You see what items catch a shopper's eye. You learn when and why they drop out of the buying process. This knowledge helps you spot pain points in your e-commerce store.
For example, sudden high shipping costs can turn people away. Or maybe the checkout process is too tricky to finish. Fixing these issues can lead to more sales and happy customers.
How to Calculate Shopping Cart Abandonment Rate
The formula for Shopping Cart Abandonment Rate
To calculate the Shopping Cart Abandonment Rate, you can use the following formula:
SCAR (%) = (Number of Carts Abandoned / Number of Carts Created) x 100
Let's break it down:
- Number of Carts Abandoned: This is the count of shopping carts that were created by visitors but left behind without a successful purchase.
- Number of Carts Created: This represents the total number of shopping carts initiated by visitors during a specific time frame or on your website.
For example, if your e-commerce website had 100 shopping carts created in a day, and 70 of them were abandoned without a purchase, your SCAR would be:
SCAR (%) = (70 / 100) x 100 = 70%
In this scenario, your Shopping Cart Abandonment Rate is 70%, indicating that a significant portion of your potential sales were left unfinished by visitors.
Understanding SCAR is crucial for e-commerce newcomers because it sheds light on the effectiveness of your website's checkout process and can be a key indicator of potential revenue loss. By monitoring and analyzing SCAR, you can pinpoint where visitors are dropping off during the buying process and take steps to optimize your website, reduce abandonment rates, and ultimately increase your e-commerce revenue.
Use of tools like Google Analytics or Shopify for tracking
You can use tools like Google Analytics or Shopify to track and analyze visitor behavior on your e-commerce website. This can help you understand how customers interact with your site, including their shopping cart activity.
With Google Analytics, you can easily calculate and monitor metrics such as cart conversion rate and cart abandonment rate. These metrics provide valuable insights into the effectiveness of your checkout process and potential areas for improvement.
By analyzing this data, you can make informed decisions to optimize your website and reduce shopping cart abandonment, ultimately increasing revenue for your business.
3 Main Reasons for High Shopping Cart Abandonment Rate
High shopping cart abandonment rates can be attributed to various factors such as unexpected shipping costs, price comparison, and a lack of payment options.
1. Unexpected shipping costs
Unexpected shipping costs can be a major turn-off for online shoppers. This is one of the main reasons why customers abandon their shopping carts. When customers are ready to make a purchase, but then discover high shipping costs at checkout, they may feel deceived or misled.
High shipping costs can significantly impact customers' decision to proceed with their purchase or abandon it altogether. To prevent this, e-commerce stores should transparently communicate shipping costs upfront to avoid surprising customers and potentially losing sales.
2. Price comparison
Customers often abandon their shopping carts because they want to compare prices. They may browse different websites or online stores to find the best deal for a product before making a purchase decision.
This can lead them to leave your website and never return if they find a better price elsewhere. Offering competitive prices and highlighting any special discounts or promotions can help reduce cart abandonment due to price comparison.
Remember, customers value affordability, so it's important to remain competitive in the market.
3. Lack of payment options
Many customers abandon their online shopping carts because there aren't enough payment options available. This can be frustrating for shoppers who prefer to use a specific payment method, like PayPal or a certain credit card.
When websites don't offer these options, it limits the customer's ability to complete their purchase. In fact, lack of payment options is one of the major reasons why shopping cart abandonment rates are high.
Research shows that 68% of online shoppers leave their carts behind, resulting in potential losses of billions of dollars for e-commerce businesses. To reduce this problem and increase conversions, it's important for retailers to offer multiple payment choices that cater to different customer preferences.
3 Strategies to Reduce Shopping Cart Abandonment
To combat high shopping cart abandonment rates, there are several effective strategies you can implement. These include streamlining the checkout process, offering multiple payment options, and providing clear shipping and return policies.
Find out how these strategies can help boost conversions on your e-commerce store!
1. Streamlining the checkout process
To reduce shopping cart abandonment, it's crucial to streamline the checkout process. Make sure that your website's checkout page is clear and user-friendly. Simplify the steps required for customers to complete their purchase.
Avoid asking for unnecessary information and only request essential details like shipping address and payment method. Use a progress bar to show customers how close they are to completing their order.
Additionally, offer guest checkout options so that users can make a purchase without creating an account. By making the checkout process quick and hassle-free, you can increase the chances of customers successfully completing their transactions and minimize cart abandonment rates.
2. Offering multiple payment options
Offering multiple payment options is essential to reduce shopping cart abandonment. When customers have limited payment methods available, they may choose not to complete their purchase.
By providing a variety of options such as PayPal, Visa, and MasterCard, you can cater to different customer preferences and increase the chances of successful transactions. In fact, studies have shown that offering more payment choices can help recover between 5% and 11% of otherwise lost sales.
So by giving customers flexibility in how they pay for their purchases, you can improve the checkout experience and boost your revenue.
3. Clear shipping and return policies
Clear shipping and return policies are crucial for reducing shopping cart abandonment in ecommerce. When customers are unsure about the cost or process of returning an item, they may hesitate to complete their purchase.
Additionally, hidden or unexpected shipping costs can be a major turn-off for online shoppers, leading them to abandon their carts. By clearly outlining your shipping fees and return procedures upfront, you can build trust with customers and make them more likely to proceed with their purchase.
Remember, providing free or discounted shipping options can also incentivize customers to convert and increase your sales revenue.
Conclusion
In conclusion, understanding and tracking the shopping cart abandonment rate is crucial for e-commerce businesses. By calculating this rate, you can uncover valuable insights about your customers and identify areas where you can improve the checkout process.
With strategies in place to reduce abandonment, such as streamlining checkouts and offering multiple payment options, you'll be well on your way to increasing revenue and converting more visitors into customers.
So don't forget to monitor that shopping cart abandonment rate!
FAQs
1. What does the term "shopping cart abandonment rate" mean?
Shopping cart abandonment rate refers to the ratio of website visitors who add items to their virtual shopping cart but do not complete a purchase.
2. How do you calculate the shopping cart abandonment rate formula?
You find this by dividing opened but not successful purchases (abandoned carts) by total visits or initiated sales (all opened shopping carts). You turn it into a percent for better clarity.
3. Does the checkout process affect my site's abandonment rate?
Yes! A long checkout procedure, additional delivery costs, fewer payment options, and forced sign-ups can increase your site's high abandonment rate causes.
4. Can mobile users affect my abandoned cart rates?
Absolutely! Mobile eCommerce sales are on the rise so make sure your conversion process is optimized for mobile users too.
5. Is there any way to recover abandoned carts?
Abandoned Cart Recovery strategies like email remarketing, retargeting ads and WhatsApp marketing workflow can all be used as retention strategies to reduce your shopping cart abandonment rates!
6. Where can I learn more about calculating and reducing shopping cart abandonments?
Geckoboard provides data analysis guides while Baymard Institute offers industry benchmarks and tips using yieldify methods too in its dashboard examples section.