The Effects of Shopping Cart Abandonment (Plus 7 Tips)

By Indeed Editorial Team

Published September 15, 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

E-commerce offers several advantages to both retailers and shoppers, but it also presents a challenge in the form of cart abandonment. Because they're shopping in the privacy of their own homes, online shoppers often leave their orders incomplete. If you operate or are involved in an e-commerce business, it can be helpful to understand why shoppers abandon their carts and what you can do to prevent it.

In this article, we define the concept of shopping cart abandonment, analyze some reasons why it occurs, discuss its effects and provide seven tips for improving the rate of abandonment.

What is shopping cart abandonment?

In e-commerce, shopping cart abandonment is an instance of a shopper adding items to their online shopping cart but leaving the site before completing the order. The shopper doesn't initiate checkout and pay for the items in their online shopping cart, effectively "abandoning" them. Every instance of shopping cart abandonment is a loss of a sale, affecting your revenue and profits.

You can measure how many people are abandoning their carts by calculating your cart abandonment rate:

  1. Collect data on the total number of completed orders and the total number of created carts.

  2. Divide the number of completed orders by the number of created carts.

  3. Subtract the above quotient from 1.

  4. Convert the above difference to a percentage.

For example, if there are 200 completed orders out of 600 created carts, you'd divide 200 by 600 for a quotient of 0.33. You'd then subtract 0.33 from 1 for a difference of 0.66. Convert 0.66 to a percentage for a cart abandonment rate of 66%.

Related: What Is E-Commerce? Definition, Types and Importance

What factors lead to shopping cart abandonment?

Various factors lead to the abandonment of online shopping carts, such as:

No intent to buy

Many online shoppers are only browsing. They might want to buy certain products at a later date, and adding them to their shopping cart is an easy way to "save" the items. Often, these shoppers don't return to the site. If they do, many don't complete their orders. Alternatively, many shoppers change their mind about buying an item, as they're not sure about its quality or utility. They might place the item in their cart with the intent to reconsider in the future, only to decide not to purchase or to forget about the item.

Related: Why Is Shopping Cart Abandonment a Problem? (And How To Prevent It)

Additional costs

When shoppers examine their cart before checkout, they might see that additional costs, such as taxes and shipping, have increased the total price of the order by a considerable amount. For example, if a shopper has $30 worth of items in their cart, they might have about $2 in taxes and $8 in shipping. Before examining the cart, the shopper doesn't see these costs, so the price appears more reasonable to them. While examining, they may be reluctant to pay an additional 33% of the subtotal.

Related: How To Calculate Sales Tax: Formula To Use With an Example

Required registration

Often, online merchants require shoppers to create an account and register as a member before they can complete their order. Many first-time shoppers would prefer a streamlined process, in which they input only the data they feel is necessary, such as shipping address and billing addresses. Some shoppers leave the site when they see they need to complete additional steps.

Long checkout process

Even sites that don't require registration can turn away shoppers by having a checkout process that's too long or complicated. Online shoppers often value speed, simplicity and convenience in their shopping experience. Some checkout processes ask the shopper to complete a large number of form fields, each of which is an additional step. Shoppers are more likely to prefer fewer fields and faster checkout times.

Slow delivery

Online retailers commonly offer estimated delivery dates for their products. If a shopper sees they can expect their order to arrive within a week, they're more likely to complete their order. If the standard shipping option takes longer, the prospect of a longer waiting period before receiving their purchase may motivate abandonment.

Related: Understanding Perfect Order Fulfillment: Definition and Benefits

Website performance

On some occasions, the website of an online retailer interferes with a shopper's ability or intent to complete their order. If the site is operating slowly or crashes, this can add a large amount of time to the shopping experience or affect the shopper's faith in the retailer. As a result, many shoppers choose to find the same items elsewhere.

Limited payment options

There are numerous ways to pay for an online order, including credit card, debit card, payment services, cryptocurrency and direct bank transfer. Many shoppers have a preference or are unable to pay by certain methods. If a retailer doesn't offer a payment option that matches their needs or wants, they may choose to drop out of the checkout process.

Related: Checkout vs. Cart Abandonment: Definitions and Differences

What are the effects of shopping cart abandonment?

When a shopper abandons their cart, it can initiate a series of events that has a growing effect on business performance. Depending on the e-commerce platform you use, placing an item in a shopping cart temporarily removes the item from the inventory, reserving it for the shopper. If this shopper doesn't complete their order, it could lead to site dropout for another user if their desired item is in an abandoned cart.

The above scenario results in multiple lost opportunities for revenue, which increases in proportion with the number of carts abandoned. The higher the number of abandoned carts, the more likely that genuine users can't complete their orders through your site, and the greater the impact on your revenue. Some other effects that result from higher abandonment rates can include:

  • Loss in customer lifetime value

  • Boost in customer acquisition expenses

  • Escalation of inventory and product availability issues

  • Increase of skewed website traffic data

  • Decrease of ad click-through rates

  • Reduction of website speeds

  • Expansion of retargeting expenses

What Is the Retail Customer Journey? (With Phases and Tips)

7 tips for improving your shopping cart abandonment rate

Consider these seven tips for improving the shopping cart abandonment rate of your e-commerce business:

1. Optimize website performance

The first thing you can do is try to ensure that the users have good experiences using your website. In particular, focus on improving the speed and reliability of the site. Quicker page loads help to satisfy shoppers' requirements for convenience and fast processes while preventing crashes and other errors prevents potential frustrations and obstacles.

Related: Why Page Speed Is Important to SEO

2. Provide multiple checkout options

Many online retailers offer multiple checkout options, such as:

  • Members checkout: This option is for shoppers who already have accounts with the retailer. They usually have their addresses, payment information and order histories stored in the retailer's database.

  • Registered checkout: Registered checkout gives new shoppers the choice to create a membership account with the retailer. Often, there are long-term advantages to becoming a member.

  • Guest/fast checkout: This option is for new shoppers who aren't interested in becoming members and want to complete their purchase with as little data input as possible.

Including each of these options on your website allows you to cater to the needs of all potential shoppers. With the members and new registrants, you can use collected data to tailor your services and retain customers. This enables the company to create guest checkout options that can appeal to one-time or periodic shoppers.

Related: 15 Ways To Fight Shopping Cart Abandonment in Your Online Store

3. Present multiple payment options

Having multiple options for payment removes another of the major obstacles related to order completion. If possible, offer your shoppers the choice between all popular methods. This ensures that every shopper's preferred option is available, helping to persuade them to go forward with the purchase.

4. Offer free shipping

Because shipping costs are another common cause of cart abandonment, offering the choice of free shipment is another method that can foster order completion. Many retailers provide this service for orders that meet a minimum cost threshold, usually $50 or $75, while orders below the threshold are subject to regular shipping costs. A potential added benefit of a free shipping option is that it can encourage shoppers to purchase larger orders so they meet the minimum threshold.

Related: 12 Common Types of Sales Promotions (With Examples)

5. Highlight your return and refund policies

You can feature information about your business's return and refund policy throughout your website, including on your splash page, product listing pages and individual item pages. The idea is that shoppers often abandon carts because they aren't sure whether they want an item. If they can easily return items, they may feel more secure about purchasing the goods.

6. Show a progress indicator during checkout

A progress indicator is a header displayed during checkout that shows how many stages are involved in the process and which stage the shopper is on. Usually, it’s important to number the progress indicator, which can consist of at least the following:

  • Shipping: At this stage, the shopper inputs their shipping address and chooses a shipping option.

  • Payment: The payment stage is when the shopper chooses a payment option and inputs their payment information. If applicable, they may also input codes for coupons, gift cards and other discounts.

  • Review and completion: Here, the shopper can look over the information they've inputted and confirm their order.

You can divide the above stages into as many smaller steps as necessary, but it's advisable to keep the number of steps to a minimum. A progress indicator can effectively remove shoppers' anxiety about long checkout processes by managing their expectations. Before they start, it shows them exactly what they should do, and it assures them that they're almost done as they complete each step.

Related: Top E-commerce Metrics for Tracking Performance

7. Send reminder emails

Sometimes, customers sign into their account or provide their email when adding items to their cart. This provides the opportunity to send the potential consumer an email if they decide to abandon their shopping cart. Reminding them of the items in the cart and offering a discount or other incentive for completing the transaction can increase the likelihood of a consumer returning to their cart and completing the transaction.

Explore more articles