Cart Abandonment Rate

What is the Cart Abandonment Rate?

Cart Abandonment Rate describes the percentage of customers who add items to an online shopping cart, but then abandon it before purchasing anything.

Rates of Cart Abandonment are high, hovering around 70 percent, and appears to be a major blind spot for many companies. Some experts estimate that cart abandonment can cost up to $3 billion annually.

Cart Abandonment Rate is a key KPI for all e-commerce businesses and is especially important for UX, design and revenue teams.

Why is Cart Abandonment Rate an important measurement for e-commerce companies?

Cart Abandonment Rate is important for a couple of reasons.

First, this KPI is directly connected to your capacity to notify customers of unpurchased items. Does your algorithm detect cart abandonment, and notify customers accordingly? If not, the likelihood of customers not returning to follow through with their purchases increases greatly.

Second–and more broadly–Cart Abandonment Rate reveals how intuitive and customer-centric your checkout process is. Is your checkout process too lengthy and complex? If so, customers may abandon their carts, at least temporarily–but of course may not actually return to purchase the items they’ve selected. Customers will often be frustrated by being asked to input too much demographic information, by being prompted to create an account in order to check out, and by unclear information about pricing, shipping costs, and taxes.

With this in mind, Cart Abandonment serves as a bellwether of both customer satisfaction and revenue loss. If customers feel discouraged from purchasing not by your product or service itself, but by the purchasing process, and if your algorithm doesn’t notify your customers of their unpurchased items, you’ve struck out twice: missing both customer revenue and customer satisfaction.

How to calculate Cart Abandonment Rate

The formula to find Cart Abandonment Rate is a little complex:

• Divide the number of completed purchases in a period by the number of shopping carts created in the same period.
• Take this result (a decimal) and subtract it from 1.
• Multiply this answer by 100 to obtain a percentage.

How to decrease Cart Abandonment Rate

The best ways to decrease your Cart Abandonment Rate are by directly addressing the two issues described above:

• notifying customers of unpurchased items,
• improving the intuitiveness and efficiency of your checkout process.

An ideal way to optimize your notification system is by sending automated emails to your customers if your algorithm detects they’ve had items in their cart for some time, but haven’t yet made a purchase. This simple measure alone may allow your company to recover up to 11 percent of what would have been lost sales.

Make your checkout process more efficient by ensuring a wide variety of credit cards are accepted as payment methods, as well as other options such as PayPal, Klarna, and MobilePay. Display information about shipping costs, returns, and (if relevant) taxes and import dues. Ensure the user interface is aesthetically pleasing and flows well, and that technical glitches are eliminated. In short, designing the checkout process with the customer experience in mind is just one more part of a good customer retention strategy.

Other KPIs similar to Cart Abandonment Rate include:

• Customer Satisfaction (CSAT)
• Call Abandonment Rate
• Customer Effort Score (CES)