The term ‘Shopping Cart Abandonment Rate’ is best defined as the percentage rate that helps online retailers identify the number of people who intended to make a transaction but did not complete the purchase or were lost before purchase completion.
Many times, site visitors put items in their shopping carts but before they complete the purchase, they choose to drop out or exit the transaction process. In other words, they abandon their shopping carts.
Simply stated, any product that makes it to the shopping cart but is dropped by the customer before it goes through the transaction is categorized as ‘abandoned’ and used in calculating the shopping cart abandonment rate.
Why Do Online Retailers Use Shopping Cart Abandonment Rate?
The shopping cart abandonment rate is quite useful for online retailers as it serves as a crucial metric for measuring the success or failure of e-tail websites. A high or continuously increasing shopping cart abandonment rate can signal issues like a broken sales-funnel, poor user-experience, poor site navigation, high shipping cost, page load time, technical problems or lack of payment options.
By calculating the shopping cart abandonment rate, online retailers can gauge and keep track of site performance, and take effective measures to lower the abandonment rate in a timely manner.
How to Calculate the Shopping Cart Abandonment Rate and Measures to reduce it?
The shopping cart abandonment rate is basically calculated by dividing total transactions completed by transactions initiated. The calculation will give you the percentage rate of the site visitors who intended to make the purchase but didn’t complete the process.
If you have a high percentage rate of abandonment, then here are some steps that you can implement to reduce it:
- Create hypotheses on why site visitors are abandoning shopping carts
- Test each hypothesis on the site by using A/B testing
Take actions and make site changes according to the results to lower the shopping cart abandonment rate, increase online sales and grow the customer base.