Abandonment Rate Facts and New Insights You Didn’t Know
If customers abandoned carts in physical stores as often as they do online, they would create a new sport – slalom shopping between carts scattered all around the alleys. Wondering why online customers are more likely to leave their cart in the middle of the shopping spree?
This article will help you understand the idea behind abandonment rate, its effect on e-commerce and the root of it all—the motivations behind online shopping.
How to calculate abandonment rate
Let’s start by establishing what exactly abandonment rate means. It is calculated using a simple formula:
This equation can help calculate the relationship between completed purchases and initiated purchases, that is, the portion of customers who start out along your purchasing path but get “lost” somewhere along the way.
For example, if a store has 45 completed transactions out of 200 carts, the formula gives us an abandonment rate of 77.5%.
The scale of the problem of abandoned carts
The numbers involved in any analysis of abandoned carts makes the nature of the challenge clear. According to BI Intelligence estimates, about $4.6 trillionworth of merchandise will be left unpurchased in online shopping carts this year.
The reasons vary from the “just looking” attitude to the amount of extra costs arising in the checkout process (you can read more about it in our other post in this series).
On the other hand, it is estimated that more than 60% of abandoned items are recoverable. What every e-commerce entrepreneur must understand is that they won’t avoid cart abandonment, but recovering those carts left behind is possible. The key is to understand the nature of the customer and their behaviors.
How shopping motivations affect the abandonment rate
Online shopping carts serve a purpose beyond a simple virtual storage place for products customers intend to purchase. They are also used for purposes only partially related to shopping, which explains—to some degree—why customers leave their carts behind.
I’m going to discuss the motivations behind adding products to carts and their effect on the abandonment rate.
Rational motivations
Rational motivations are typical of customers that use online carts when they actually intend to buy a particular product.
This is, obviously, the intended original use of the cart, as a place to add selections while continuing to browse for other products. The frequency of online shopping for this kind of customer depends on their needs.
Financial motivations
This kind of motivation applies to customers who are looking for deals and discounts. They add products to carts to check and possibly take advantage of special offers, like a discount of a certain amount, or other promotions like free shipping.
Customers simply want to see the bottom line price of a particular product. The higher the discount, the bigger the thrill.
Hedonistic motivations
Customers driven by hedonistic motivations treat shopping as a pleasure and enjoy adding products to their carts. It’s a way of coping with boredom, entertaining themselves and evoking positive emotions often associated with the online store brand. It’s a pleasurable substitute for actual shopping when the customer isn’t able to afford the product at a particular time.
Placing a product in a cart isn’t about obtaining it but feels better than passively browsing the site. Customers who like to add products to carts for fun abandon them more often than other kinds of customers.
Organizational motivations
Shopping carts can also be used in the context of making a “wish list” of products that customers would like to purchase at some point in the future. It’s a way of making it easy to find the product when they return to the site again.
Although many sites like BestBuy.com supply separate tools for making such a list, most online stores don’t. The argument for not having them is based on the idea that it requires additional effort from shoppers to move a product to their carts and the less you demand from them, the better.
Ultimately, these stores see separate lists as an unnecessary problem since the cart can serve the same purpose.
It’s not just about the cart
While the subject of abandoned carts is typically associated with the retail sector, it’s important to remember that it’s not just the online world where customers leave products behind. Things like abandoned reservations are a good example, something that affects the travel industry: hotels, car rentals and airlines.
Shopping cart abandonment doesn’t refer only to… carts. There are other types of abandonment in e-commerce, such as form and browser abandonment.
The first one happens frequently when, for example, estimates for car insurance require the submission of information in a long form that some customers are not willing to complete after starting.
The other type occurs when a visitor is engaging with the online store offer, browsing category and product pages, but leaves the site without adding any product to their cart.
Wrapping up
Cart abandonment rate should be an important position in your sales performance reports. It indicates the quality of customer experience and the checkout process.
Without understanding the way visitors feel in your store and why they behave in a certain way, it’s impossible to take effective measures to save abandoned carts.