Why is cart abandonment unfavorable?
Shopping cart abandonment describes the phenomenon where customers add items to their shopping carts but then leave the site without making a purchase. It is a widespread issue in e-commerce, with an average rate of 68.63% in 2016 (see chart below).
Online shopping cart abandonment rate worldwide from 2006 to 2017, Statista.
E-tailers use large amounts of resources to motivate the shopper to browse the site and entice the shopper to add items to the cart. The moment the shopper leaves the site, the e-tailer must repeat this process and spend those resources again.
Furthermore, those abandoned items are potential sales and revenue that the e-tailer has lost. Ultimately, CPC Strategy found that cart abandonment contributes to approximately $18 billion lost revenue per year.
Why should you measure it?
Not only desirable metrics (e.g. conversion rate) should be measured, tracked and monitored, but also (if not more so) undesirable metrics – such as the cart abandonment rate.
Measure and monitor the rate so you can be knowledgeable of the company’s state at all times. This allows you to react accordingly if any changes occur or if there are any persisting trends. If the rate rises, use tools (explained later on) to be knowledgeable of where your customers abandon. This way you can find the issue and combat it quickly.
In particular, measure and monitor the rate when you make changes to your site. Anything from small changes, such as the site’s colors, to big changes that directly affect the rate, such as changes on the ultimate prevention checklist and these solutions.
It is important to monitor the rate especially during big campaigns of which the goal is to affect the rate – the multi-stage emails campaign. Monitoring the rate allows you to test the campaign’s overall effectiveness, test variations of small changes within the campaign (such as timing, visuals, copy) and to track progress. This way you can find the optimal strategy for your specific customers for maximal conversions.
How do you measure it?
1. Calculate the rate
The cart abandonment rate is calculated with the formula: added to cart/(added to cart+made conversions). It represents the percentage of customers who abandoned cart items out of all the customers who added items to their carts.
For example, if 100 people added items to their carts but only 25 of them converted, the cart abandonment rate is: 100/(100+25)=0.8=80%. Therefore, 80% of customers who added items to their carts have abandoned them.
2. Use Google Analytics
You can also use Google Analytics, which uses the same formula. You will need to define your goal (conversions), success and Funnel URLs (Funnel being the process for conversion). Once this is done, you can view the figures on your Funnel Visualization page.
This page shows you the overall conversion rate (of which the cart abandonment rate is complementary to). It also shows you the breakdown of proceeding customers per page, which reveals at what stage most customers abandon. This can help you discover the abandonment location and cause to be able to combat it.
3. Use heat mapping
Heat mapping visually represents shoppers’ activity and interaction with pages, which reveals how they behave and where they abandon. The discovery of users’ activity can help you solve issues and improve usability, process and conversions.
Most companies use mouse-tracking as it is found to be very accurate. It is on average 90 pixels of difference between the shoppers’ eye gaze and mouse location.
You can use heat maps on the cart and checkout pages to discover customers’ eye gaze, clicks and scrolling habits. This will uncover issues such as:
– Pages’ clarity in regards to finding information, help and how to proceed to the next step (CTA discovery).
– Disengagement of customers (scrolling down the page is often stopped halfway).
– Distraction by irrelevant information (hovering over irrelevant information to the conversion).
4. Other measurements for discovering abandonment location
Usability tools test how easy to use your site is. For these tests, real users will go through a shopping process while being recorded or observed. This can help you find the exact points and reasons customers abandon a site (issues or confusion) and combat them.
Simply ask the person why they are leaving. You can ask it when they are just about the leave (i.e. use exit intent pop up, live chat) or after they have left (use cart abandonment email).