Way before the COVID-19 pandemic hit, ecommerce was already on the rise. However, issues such as shopping cart abandonment have become hot topics not just in the business community but also in academia. This is because it is viewed as a reason for the loss of possible revenue. Moreover, it is attributed to poor shopping cart experience most of the time. Hence, user experience (UX) design is always blamed.
Today, however, design standards and practices have improved and are now common on the internet. User interfaces have also improved, thanks to easy-to-use shopping cart software solutions for design. But, as you will see, shopping cart abandonment remains quite high. Obviously, there are many reasons why this is the case. In this article, we are going to outline the major ones and get to know why is shopping cart abandonment a problem, and how to reduce it.
Why Is Shopping Cart Abandonment a Problem, and How to Reduce It?
In 2018, there were 259 million people who purchased goods and services on the internet. Three years later, according to recent ecommerce statistics, the number reached 2.14 billion. Of course, the pandemic had a hand on this increase. However, the number of online purchases was on the rise even before it hit. The long-term trend tells the same story. In fact, since 2014, retail ecommerce sales revenue has been on the rise. From a little over $1.33 billion in 2014, it climbed to $3.35 in 2019.
Source: Statista, 2022
Advantages and Disadvantages of the Ecommerce Boom
This has been largely a boon to businesses. Moreover, thanks to technology lowering the barriers to entry, even solopreneurs can now enter the market. And, entrepreneurial spirit in the United States is white hot. In 2020, a record high of 4.4 million new businesses were created. This record was broken by almost a million—nearly 5.4 million—in 2021. But a good thing may introduce disadvantages. Specifically, growth may lead to stiffer competition not just with direct competitors but also with product substitutes.
Moreover, the shift of power to customers reworked not only the mass approach to communication but also the traditional 4Ps framework. To stand out, businesses have to compete in multiple areas. Today, they need to curate a customer’s journey, personalizing experiences at every juncture. This includes the final leg, which is the point of sale. In ecommerce, this is the shopping cart experience.
One little flaw could lead to high bounce rates. In fact, 54% of consumers—57% of them millennials—revealed that they would stop doing business with a brand after one negative experience. Fortunately, as mentioned, good shopping cart design tools and practices are readily available. With these, you can better lean the odds in your favor. Shopping cart abandonment, however, will not go away. This is because the issue is quite complex with many possible causes.
Examples of Shopping Cart Abandonment Software
NetSuite SuiteCommerce
NetSuite SuiteCommerce is an end-to-end software solution that ties together both online and offline channels to bring forth a unified shopping experience. It provides users with tools to stave off high abandonment rates such as abandoned cart email reminders and personalized email marketing. Its shopping cart module also supports multiple payment options and transactions in any currency.
Wix
Wix. A total digital presence platform, Wix provides users with powerful ecommerce solutions including an easy-to-use shopping cart module with cart abandonment minimization features. This includes a highly-customizable point-of-sale experience complete with coupons, promos, and cart recovery management capabilities with flexible payment processing.
Shopify Plus
Shopify Plus. This popular ecommerce platform provides users with tools to set up an intuitive multi-channel shopping cart operation that fits the omnichannel demand for availability of customers. It offers users great customization options for customers’ shopping cart experience complete with custom fulfillment options.
BigCommerce
BigCommerce. A go-to end-to-end online store processes solution, BigCommerce provides users with flexible and scalable enterprise-grade shopping cart design features complemented with highly-functional backend features. It is known for connecting professional looking storefronts with great order fulfillment capabilities.
X-Cart
X-Cart. Known for providing comprehensive shopping cart features, X-cart offers other important ecommerce solutions including SEO and seamless integrations with other third-party solutions. It is also prized for its powerful search capabilities and stunning customizable shopping cart design templates.
Shopping cart platforms like NetSuite SuiteCommerce offer users real-time dashboards with KPIs
What is shopping cart abandonment?
Shopping cart abandonment has been a subject of study since the mid-2000s. Many definitions have been proposed by researchers and practicing marketers alike. But, as pointed out in a study, there are two meanings ascribed to shopping cart abandonment: (1) products were chosen and placed in the shopping cart and (2) the financial transaction was not completed. The shopping cart abandonment rate is calculated by dividing the number of completed transactions by the number of initiated carts, subtracting the quotient from one, and multiplying it by 100.
So, if you have 105 completed transactions out of 833 initiated “add to cart” sessions, following the above directions you’ll get 87.39%. This is how ecommerce software solutions calculate abandonment rates. They, however, could not fully provide users with reasons as to why customers abandon their carts. So, strategies such as email recapture can be a hit or miss. This is because there are many complex reasons why customers fail to complete a purchase. Factors come from both ends—the business and shoppers. Hence, strategies and techniques can never really cover the whole gamut of issues. But, it is generally held that shopping cart abandonment is a problem. And, here are the main reasons why.
Why is shopping cart abandonment a problem?
Why is shopping cart abandonment a problem for businesses? Basically, this metric shows that a business is losing opportunities for sales right at the point of sale. And, the worst imaginable scenario is that shoppers with real intentions to purchase canceled the transaction because of their point-of-sale experience. This means that, for the shopper, the products are a lock and the price is right but it became a no-go at the very end. So, businesses surmise that the most likely issues are at the tail end of the sales process—shopping cart functionality or customer experience. Seen this way, it is ultimately a UX design issue that can be controlled, to a good degree, by businesses. So, the onus is on the company, especially when modeling this scenario with quantifiable data.
Quantifying the Worst Case Scenario
Viewed mainly through this one possible scenario, businesses are losing a lot of money. So far, in May of 2022, the average cart abandonment was estimated to have reached 68.70%. This means that only an average of 31.30% of initiated transactions get completed. This sounds worse when you look at the total US ecommerce sales value.
In 2021, US ecommerce sales reached $960.1 billion. Assuming this is the result of just 31.30% of all initiated shopping cart transactions, then the industry lost more than $2.1 trillion due to abandonment at a rate of 68.70%. Applying this to the Q1 of 2022 ecommerce sales revenue data, then the lost revenue due to abandoned carts reached $548.72 billion. While the quarter recorded a strong $250 billion—which is en route to making a new ecommerce revenue record—still pales in comparison to the $799 billion it could have made if there were no abandonment at all.
The loss of sales opportunities is quite staggering when presented this way, especially when we blame shopping cart abandonment on issues largely controllable by businesses—shopping cart functionality and end-user experience. However, as mentioned, there are complex interrelated reasons why carts get abandoned. Also, realistically, it can never be eliminated, only reduced. To better understand why this is the case, we need to take a look at common causes of cart abandonment.
Source: Census.gov
Top Reasons for Cart Abandonment
Issues leading to cart abandonment can come from both sides of the coin. Research on the area, however, largely focuses exclusively on either the business or the customer side. For simplicity’s sake, discussing them separately could help break issues down better and puts more focus on singular aspects. But, It is good to note that cart abandonment is best thought of as a result of some incompatibility between the business and a customer in terms of their goals and expectations at the point of sale.
As mentioned, cart abandonment is oftentimes blamed on UX design. This, of course, maybe the actual case for many. However, cart abandonment instances could also have more fundamental reasons such as basic business and marketing factors. Others have something to do with logistics. To give you a better idea, here are the top reasons for cart abandonment. And, we are going to break them down further.
Source: Statista, 2022
Basic Business Reasons for Cart Abandonment
Product Quality
Marketers can overlook that their product features may not be on par with the needs of their target customers. Moreover, they need to consider the possibility that competing products may just be better solutions. As product comparisons are easily made on the internet, shopping carts could be abandoned when shoppers find a better option.
Price
This is another fundamental thing that online business owners and professionals may miss. Customers may abandon their carts because they may find the price too high. Reasons, of course, can vary. It is possible that some shoppers simply couldn’t afford it yet. Also, it could be the case that a shopper may feel that a product is priced too high for its use, quality, or brand. In such cases, customers are more likely to abandon their carts than go forward with the purchase.
Branding
Depending on a product category, a company or product branding can affect a customer’s intent to purchase. If you are marketing a competing or substitute product, shoppers may abandon their carts to hold out for their preferred brand even though they may feel some urgency to make a purchase.
Logistics Reasons for Cart Abandonment
Shipping Options
We live in an on-demand culture and if customers can have their orders right away, they’d take it. There are also online shoppers that have a preference when it comes to shipping services. This is especially when such services earned their loyalty through providing great service and customer experience. So, there may be instances when customers abandon their purchases because their preferred shipping options are not present.
Shipping Cost
It is quite common that customers would abandon their carts right after the shipping fee is revealed. There are several possible reasons for this but it could be that they don’t find the shipping cost fair or they find it expensive. So, as mentioned, it is best to have multiple shipping options. And, maybe, have a free shipping option available. Deliveries, of course, may take longer but if there is no real urgency for customers to get their orders, a free shipping option would make sense to them.
Slow Delivery
So far in 2022, 22% of those that have abandoned shopping cart sessions have done so because of slow delivery. Again, in an on-demand economy, time, sometimes, could be of the essence. So, businesses need to be in business with tried and tested order fulfillment services to help alleviate this concern.
Returns Policy
Returns policies differ from product to product and from store to store. But, the basic idea behind a good policy is when you receive something defective, you’d be able to get it replaced or get your money back. Unfortunately, this is not the general policy. And, it leads to about 12% of card abandonment instances in 2022.
UX Design Reasons for Cart Abandonment
Clunky Interface
Shoppers want a smooth online purchasing experience. As such, they appreciate well-thought-out product catalogs and shopping cart designs that are easy to use and function as expected. Early in ecommerce, this was a common case. Fortunately, thanks to intuitive website builder software tools, providing a functional and intuitive interface is as easy as ever.
Account Creation
One good way to point customers elsewhere for their business is to require them to create an account with you to make a purchase. In a milieu where data security risks abound, many customers are reluctant to do so. This is pretty understandable as you can probably attest to.
Trustworthiness
UX design as it involves branding can also affect how customers trust businesses with their credit card information. Sometimes, an unprofessional-looking page or the absence of customer service numbers and whatnot can cause customers to doubt the level of security, responsibility, and, much worse, the legitimacy of the site.
Complicated Checkout
You want your shoppers to make a purchase as fast as they can. Having a checkout process that involves multiple pages, doesn’t help with the goal. Hence, it is better to have the checkout process accomplished in just one to two pages. Furthermore, if you should choose to have ads at the point of sale, then choose ones that are relevant in terms of providing more value to your customers (e.g. discount for the purchase); not hard upsells.
Extra Costs
Customers want businesses to be as transparent as possible, especially with fees and charges. So, they expect all other charges such as convenience fees to be clearly included and not in fine print. Thus, it is best to be as transparent with extra costs and other issues. Even then, customers may feel that the asking price is too high and may abandon their carts. In fact, 48% of cart abandonment is related to this concern.
Payment Options
Consumers, in general, have preferences in terms of where to pay for what. And, if they can’t find their preferred payment option in an online store, they might just abandon their cart altogether. So, it is also best to research which payment options and payment gateways are popular among your target customers.
Taking Customer Intentions into Account
Poor UX design or a bad marketing mix is not the only reason to blame for high abandonment rates. Customer intent, psychology, and attitudes are also determinants of car abandonment. Here are several scenarios involving customer intent in cart abandonment.
Losing Initial Purchase Intent
One, a customer first intends to purchase from an online storefront. However, after placing their orders on a cart, they abandon their purchase intent, thus abandoning their selected products in the virtual cart. In other words, customers lose their initial intent to purchase. And, this may characterize most of the instances that the worst-case scenario presented before applies. Of course, there could be other reasons such as a quick change in priority that has nothing to do with the functionality or customer experience. For instance, a customer abandoned her cart after the onset of shopping guilt.
Just Gathering Information
Two, customers may only use a website’s shopping cart tool to gather information without any purchase intent to begin with. They may be just looking at how much a set of products cost or the shipping fee. Also, closely related to this is that some customers may abandon their carts as they intend to purchase the products at a later date or via another channel.
Just Having Fun
Three, other customers may use the shopping cart for entertainment value alone. Yes, this happens and it seems to be an online analog of window shopping.
Given these three main scenarios of cart abandonment from the customer’s perspective, we can surmise that it is in mostly the first case that marketers have the most control. And, reasons two and three show shopping cart abandonment will never be eliminated. Not everyone starts a cart session with the intention to make a purchase. But, for those that do have some intent, as in the case of scenario one, there may be ways that can nudge such customers into completing their transactions. Also, with consideration of the breakdown in this section, let’s take a look at how to reduce shopping cart abandonment instances.
Ways to Reduce Shopping Cart Abandonment
We proceed to the solution part of the initial question about why is shopping cart abandonment a problem, and how to reduce it.
Firstly, as pointed out above, businesses should take into account basic business reasons that could contribute to shopping cart abandonment. And these, too, involve sales and digital marketing strategies such as SEO and lead generation. This, unfortunately, is out of the scope of this article.
The main thing to note, though, is that your marketing fundamentals need to be timely in terms of positioning your brand and offerings vis-a-vis your competition. This means that you have to actively seek out marketing trends and be up to date with your competitors’ marketing activities. In this way, you won’t lose sales to them because of promotions such as loyalty card programs and sales discounts. This is because information about such is readily available. In fact, customers can compare multiple supplier shopping carts at the same time. And, they are most likely to choose the ones that could get them a better deal—especially on the same product or a similar product line.
So, it’s prudent to keep watch on your competitors’ marketing campaigns and either match these promotions or simply offer something better. Now that we have dealt with fundamental business and marketing reasons, let’s move on to more concrete point-of-sale issues and some ways to reduce shopping cart abandonment.
Improving UX Design by Top Reasons for Abandonment
Since 2006, the average shopping cart abandonment rate is 69.99%. Being around this number—about 60% to 80%—is considered a good abandonment rate. And, successful companies keep their rates around the average by employing ways to make their shopping cart experience better. Do note, however, that UX design is not just limited to interface functions and layout. It also includes pricing strategy and dealing with visitors who are only gathering information. It encompasses everything. But, of course, a lot of it has something to do with the site experience.
Here are general tips on how to reduce shopping cart abandonment:
1. Set Up Efficient Logistics
Problem: Slow delivery, issues on returns
Share as a Reason for Abandonment: 82%
The efficiency, cost, and quality of handling transactions are highly important to online shoppers. In fact, around 82% of cart abandonment issues are related to logistics. These include concerns about returns policies (12%) and slow delivery (22%). Moreover, 48% of cart abandonment instances that have been reported are related to extra costs, including shipping fees, handling fees, and convenience fees. Hence, businesses, in general, must offer shipping options, prices, and return policies that are on par with their target customer’s needs, wants, and expectations—of course, provided it is still profitable. Fortunately, the best fulfillment options are quite accessible today. So, shopping for good deals among top choices will be easier.
2. Bundle Costs, Create Minimum Orders & Promote Transparency
Problem: Extra cost too high (shipping, tax, fees, etc.)
Share as a Reason for Abandonment: 48%
If you have set up your logistics services in a way that you could provide free shipping to your customers, then good. However, depending on your profit margins and other costs, you may not be able to eliminate this problem quite easily. As mentioned, this is the top reason for cart abandonment with 48% of customers agreeing. So, one way to avoid this is to bundle your extra costs with your products.
In this way, no extra fees will be displayed. If this could not work per item, then maybe find product mixes or a minimum order amount that will qualify for free shipping options while you remain profitable. If, unfortunately, you can’t totally get rid of extra costs this way, then make sure that you are very transparent about them from the get-go. You can start showing shipping fees right on the product page. Don’t surprise your customers with extra costs at the point of sale. This seems to be the greatest deal breaker.
3. Allow Guest Checkout, Have Membership Perks
Problem: Site wanted me to create an account
Share as a Reason for Abandonment: 24%
Since many customers find creating an account on every site inconvenient and even untrustworthy, requiring customers to do so is like putting up a high barrier to sales. So, the best way to eliminate this barrier is not to have it at all. But, if you really want to have a membership or subscription program going, then allow for guest checkouts. Just incentivize visitors to sign up by offering discounts and other loyalty perks for members.
4. Provide Social Proof, Trustworthiness Cues
Problem: I don’t trust the site with my credit card information
Share as a Reason for Abandonment: 18%
A two-prong way to avoid such issues is to provide cues for trustworthiness and provide social proof. This means that you should display security and safety certifications on your pages including your shopping cart. Also, you should also do your best to get real user reviews there as well. These basically influence your customers to associate your brand and online store with secure and real enjoyable transactions with real people.
5. Limit Jump Throughs
Problem: Too long/complicated checkout process
Share as a Reason for Abandonment: 17%
It is really inconvenient when you have to go through hoops just to have a simple transaction. Bombarding your customers with ads or simply having a roundabout checkout process will surely have them looking to do business elsewhere. So, it is best to limit your checkout process to one to two pages. It should be easy and quick.
6. Display Total Cost
Problem: I couldn’t see/calculate total order cost up-front
Share as a Reason for Abandonment: 16%
Transparency is key; convenience, too. Don’t let your customers calculate the total cost and fees by themselves. It’s too inconvenient. Also, you will not be upfront about other costs. So, the easy answer is to just simply display them. And, this is very easy to do using customizable shopping cart software solutions.
7. Do Regular Site UX Audits
Problem: Website had errors / crashed
Share as a Reason for Abandonment: 13%
Nowadays, because of highly-customizable websites and shopping cart builder software tools, this is quite easy to resolve. Moreover, SaaS products generally have an uptime of 99%. So, downtimes happen very seldom. But, for you to be able to know whether your site UX is clunky is to check it yourself from time to time. See how every process leads to another, especially during the checkout phase. Moreover, you can also set up focus group discussions to help you gather ideas on how to improve the visiting experience.
8. Offer Free Return But Mind Added Costs
Problem: Returns policy wasn’t satisfactory
Share as a Reason for Abandonment: 12%
The best way to deal with this is to have a free return policy. Using historical data, you can check whether the shouldered costs for returns can drastically affect your profitability. Ideally, returns shouldn’t be that much at all. So, this could work, especially for business-owned online storefronts. In fact, about 49% of retailers offer free return shipping. Thus, you should consider doing so to be competitive. Customers too, at 62.58%, expect retailers to allow returns up to 30 days. And, if you get the returns policies correctly, 92% of customers reveal that they will likely buy again. Marketplaces, however, could have a higher share of returns than company-owned storefronts. So, it is best for them to experiment with different mixes of return policies.
9. Have More Payment Methods; Bundle Fees with Products
Problem: There weren’t enough payment methods
Share as a Reason for Abandonment: 9%
Payment gateway services are competitive when it comes to their pricing. The top ones have their transaction fees hovering around 2.9%. So, it isn’t really much of a problem offering different payment methods. Of course, you can let your customers carry the transaction cost. So, it is best to include these in your pricing.
10. Offer Cart Recovery Programs
Problem: Customers are just gathering information or using shopping carts for entertainment
Share as a Reason for Abandonment: Unknown
As discussed, customers could abandon their carts because they don’t really have the intention to purchase the products during that session. They could just be gathering information about prices, shipping fees, and whatnot. And, some are just having a good entertaining time without any intent to purchase. One thing to turn this around in your favor is to offer cart recovery methods like allowing users to send their abandoned carts to their emails. Also, providing discounts to checkout abandoned carts may nudge customers to finally purchase.
Shopping Cart Abandonment Is Nuanced and More Complex
Yes, this sounds like a cliche but many times we oversimplify. This is something that we usually do when talking about shopping cart abandonment. Sure, we need to be able to understand it in the broadest terms and have a general idea of the general state of things. However, as discussed, reasons for cart abandonment are many and can be interrelated. Moreover, they too can differ from product line to product line and from one industry to another.
It was found that, in retail, products with higher price points tend to have higher abandonment rates than those with lower price points. Also, fit-specific industries such as fashion and apparel also tend to have higher rates than non-size-specific such as beauty and accessories. Fundamental market forces, too, can affect these rates from time to time. During the pandemic, cart abandonment rates in fashion and apparel increased by 12.2 percentage points. Intuitively, this is because workers are not using much of their wardrobe because of stay-at-home policies. On the other hand, cart abandonment from home goods was down 1.3 percentage points. Experts think that this is the result of people having more time to invest in home improvement and decoration.
After going through the complex details about why is shopping cart abandonment a problem, and how to reduce it, what we want you to get from this is that there is a possibility that market figures and general tips may not apply to your situation. So, it is best to exercise due diligence when diagnosing issues and fundamental forces that may have been contributing to cart abandonment instances. Of course, you can use the general solutions that we provided as a starting point to look for potential issues and set up potential solutions. Lastly, we also recommend that you regularly check ecommerce trends for new standards and best practices in order to stay competitive.
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