How to Calculate Cart Abandonment Rate & Use It to Your Advantage
As much as we want everything to always go our way, e-commerce is a lawless place where people abandon their carts left and right, making it essential for business owners to learn to calculate the cart abandonment rate. Many companies choose to ignore this issue. However, you should always consider calculating and reducing cart abandonment, as it may severely cut into your bottom line.
Calculating the cart abandonment rate is a crucial step toward recovering lost profits. In this article, we will teach you how to do it correctly.
How to Calculate Cart Abandonment Rate
Cart abandonment is a critical metric for e-commerce businesses to understand how many potential sales are lost. There are two ways to measure this metric: manual and program-assisted. Below, you will find how to calculate the cart abandonment rate using both methods.
Manual
If you dismiss platforms that provide data analysis because of the high price, inconvenience, or simple disaffection, grab a pen and a piece of paper or open a program to execute mathematical operations (e.g., Microsoft Excel) and apply this shopping cart abandonment rate formula:
- Find out how many shopping carts were opened during the particular period.
- Define the number of them that transformed into orders.
- Divide the first variable by the second variable.
- Subtract this number from one.
- Multiply the result by 100%.
Let’s illustrate this cart abandonment rate calculation with an example for better understanding, visualization, and practice. For instance, your store’s statistics look like this:
- 61,000 users opened carts;
- 16,000 shoppers finished the checkout.
Use these figures to perform the following actions:
The digits show that your shoppers neglected 74% of their carts.
If you prefer to see success over failure (fair play; we can’t blame you for that), you can skip step 4 in the calculation to see your cart conversion rate.
In our example, you will get the following calculation:
These are functionally two sides of the same metric, but you may want to show different percentages to different people. For example, a 26% cart conversion rate will sound much better than a 74% cart abandonment rate at your board meeting. But your marketing team will probably be more comfortable working with the cart abandonment rate, seeing as that is the issue they are trying to fix.
Program-Assisted
You can also calculate your cart abandonment rate with special analytical software like Google Analytics. However, the basic version does not render reports with this metric, so you have to change it to Enhanced Ecommerce.
Open “Shopping Behavior Analysis & Checkout Behavior Analysis” reports. The first one will show the total number and percentage of abandoned carts, explicitly pointing out the portion that happened during the checkout process. To obtain a profound view of checkout abandonment, you should examine the second one.
To access these reports:
- Sign in to your account.
- Go to the Admin panel.
- Select the View section.
- Open Reports category.
- Proceed with Conversions and then Ecommerce.
Shopping Behavior Analysis Report. Retrieved from Google Analytics Enhanced Ecommerce manual.
Most popular e-commerce platforms, like Shopify, WooCommerce, and Magento, also feature this in their analytics, with similar steps to access them for each platform. If your analytical software does not automatically calculate the metric for you (or requires additional payment) but gives all the necessary data for it, you can always return to our cart abandonment rate formula above and calculate it manually.
What Grading Scale to Apply When Interpreting Your Ratio
The shopping cart abandonment rate can be informative when analyzing customers’ behavior or brainstorming viable strategies for amending your website’s performance. Still, without a coherent attitude to its interpretation, it provides no help with assessing the situation.
Knowing how to calculate the cart abandonment rate is only sufficient once you learn how to view this measurement in coherence with multiple factors and other major KPIs. Thus, let’s explore the most effective methods of turning a useless figure into a powerful tool.
Compare it to the Average Cart Abandonment Rate
Naturally, the best practice for evaluating your performance is to compare it against the results of your competitors. According to the latest research, the average cart abandonment rate in the e-commerce sector is 70.19%.
If your rating is better than the average value, you might have minor issues to address, but overall, your current policy on stimulating shoppers to buy from you is successful. When the metric outreaches the average level, it is a wake-up call for you to start developing a blueprint for its recovery.
However, it would be too simple if there were no other factors to consider. The average cart abandonment rate may fluctuate vastly between industries because acquiring expensive objects requires more thoughtful decision-making than shopping for essentials, such as food or housewares.
Shopping cart abandonment rate by industry in June 2022. Retrieved from Statista.
Therefore, let’s put this data into practice and get a more detailed look at two imaginary situations.
Situation 1
Your website offers services for searching and purchasing airline tickets and shows an 80% abandonment rate. Given that the airline industry average is 90%, your situation is not critical.
Situation 2
Your online marketplace sells groceries, and your abandonment rate is 60%. Meanwhile, the industry average is 50%. In this case, you have cause for concern.
You should never expect your shopping cart abandonment rate to reach zero. Dismiss this goal as unrealistic and replace it with a feasible one. For example, reduce this rate by 10%. According to statistics, this is achievable using exit-intent widgets.
Other Factors to Consider
While knowing how to calculate the cart abandonment rate is an important skill, it is not the end-all of e-commerce. If you pick a complex approach to interpreting your shopping cart abandonment rate, you can discover the roots of customers’ dropouts. Here are some of the most valuable indicators regarding cart abandonment rate calculation analysis other than conversion rate.
- Shopping behavior. Monitor shopping behavior parameters like the total number of visits, sessions with no shopping activity, add-to-cart and checkout actions, and add-to-cart or checkout abandonment. Determine which funnel’s stages are potentially problematic.
- Checkout behavior. Review the checkout process step-by-step to find out when the dropouts tend to occur.
- Average order value (AOV). Calculate the severity of the revenue loss situation using the average total price of products and services in the customer's cart.
- Site speed. Discover if your site is fast enough in such vital aspects as execution speed & page-load time. Explore the suggestions to improve these characteristics.
- Goal flow. Design funnels with shopping cart and checkout pages as goals to determine the pages that spark more enthusiasm among visitors. Review the pages that display a low level of people’s engagement to find the elements that need improvement.
- User explorer. Investigate a particular user’s shopping behavioral patterns to find inspiration for your remarketing campaign. See what the person browsed, viewed, bought, or added to the cart but didn’t purchase to remind them about the contents, offer complimentary items, and come up with personalized recommendations.
Here is an example of shopping behavior analysis from the e-commerce platform MAUDAU. They determined that many site visitors missed their time-limited deals because they were hidden in a separate "Promotions" section and deep on the page. Accordingly, shoppers were deprived of a profitable purchase, and the retailer was deprived of profits.
The solution was to use exit-intent widgets from Claspo. They appeared at the last second before leaving the site, informed visitors about the deal, and redirected them to the discounted product page. This not only kept shoppers on the site but also increased the number of additions to carts and transactions by 15% and 19%, respectively.
What lessons can be learned? First, analyze what prevents site visitors from purchasing and remove these obstacles. Second, arm yourself with exit-intent widgets from Claspo (this is obvious). They appear when the shopper abandons their cart and goes to leave the site, showing a last-second offer that could change their mind. The HUGE PLUS: our exit-intent widgets reach even those shoppers who are not on your mailing list and cannot receive your abandoned cart reminder emails (there are many of them, right?).
If last-second discounts are outside your strategy, use exit-intent widgets to conduct a survey and find out what's stopping shoppers from completing their purchases. After all, even the most detailed analysis of customer behavior on a website cannot replace first-hand data.
Calculate your cart abandonment rate now, add a free exit intent widget to your website, and watch it decrease over time!
