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How to Calculate Cart Abandonment Rate & Use It to Your Advantage

15 February ~ 23 min read 1192 views
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Claspo Blog How to Calculate Cart Abandonment Rate & Use It to Your Advantage

As much as vendors dream of shops crowded with people buying everything they see, clientele frequently tends to have zero commitment to the commodities they put in their shopping carts. Especially that is true in the e-commerce sphere. In online stores, users are left unsupervised, so every frustration, misunderstanding, or absence of essential information can lead to an exit move, even if they already had something in their baskets.

Many companies choose to ignore this behavior. Yet, if handled properly, cart abandonment can become a wellspring of inspiration for winning customers over. Learning to calculate cart abandonment rate and interpret it correctly, depending on your company’s specialization and other metrics, is a crucial step towards the recovery of your lost profits.

Contents

Defining Shopping Cart Abandonment Rate

Every day your website has visitors. Some of them browse it intentionally, some stumble upon it accidentally. Your primary target is to ensure that as many of them as possible leave with a new possession. However, despite consumerism being one of the major traits of modern society, people hesitate or have a change of heart while shopping.

That is why, when you investigate your statistical data, you see the figures divided into those who accessed the site, clicked on the products’ pages, added something to the cart, started the checkout process, and placed orders. Each of these categories has its value, still, the number of potential clients who intended to acquire something, but dropped out instead can be crucial to understanding your shortcomings and fixing them.

Despite the general scarcity of attention to this phenomenon, analysts study this subject. They invented the term to describe the situation when visitors browse the site and add things to the cart, but then click the exit button, saying farewells to all the objects in the basket.   

Shopping cart abandonment

The customer’s act of quitting after selecting products or services for the cart but eventually not putting in an order.

Of course, cart abandonment is a multidimensional concept that deserves to be explored on its own. So, you can read about it here, if you’re invested in this topic.

The index that reveals how many opened carts were never converted into the actual transactions deserved its own definition. 

Shopping cart abandonment rate

The percentage of the abandoned carts out of the total number of the initiated purchases.

If this ratio surpasses the average point, which, as stated by Baymard Institute, constitutes 69.82%, it’s an alert. Something troubles your visitors, and although they would like to obtain something from you, it prevents them from doing so. If the metric is lower, you deserve praise for doing a good job. However, a successful entrepreneur will not miss a chance to seize an opportunity for further development.

Overall, it’s an important measurement because it permits you to pass a realistic judgment on the situation and determine the correct ways to address it. It’s the first step towards creating an action plan to regain the lost revenue and motivate vendees to complete purchases more often. 

Abandoned cart recovery

A company’s strategy, containing a set of specific measures designed to prevent users from abandoning their online carts, or bring them back to complete the initiated purchase if they have already left the platform.

This route is a challenging journey towards improvement that incorporates several stages and a plethora of techniques. You can learn more about this complex process here

The shopping cart abandonment rate does not only signal that something is malfunctioning, it also designates the extent of your success in sorting out your issues. If the ratio moves up the scale, your tactics are prolific.  

Easy to Follow Calculation Manual

Cart abandonment rate calculation can be performed manually or with the assistance of special analytical software, such as Google Analytics.

If you dismiss platforms for data analysis because of the expensive price, inconvenience, or simple disaffection, grab a pen and a piece of paper/open a program to execute mathematical operations (e.g. Microsoft Excel), and follow this algorithm:

  1. Find out how many shopping carts were opened during the particular period.
  2. Define the number of them that transformed into orders.
  3. Divide the first variable by the second variable.
  4. Subtract this number from one.
  5. Multiply the result by a hundred.

Let’s illustrate this sequence with an example for better understanding, visualization, and practice. For instance, your store’s statistics look like this:

  1. 73 000 visitors;
  2. 61 000 users with opened baskets;
  3. 16 000 shoppers who finished the checkout.

Claspo.png

Use these figures to perform the following actions:

  1. 16 000/61 000=0.26
  2. 1-0.26=0.74
  3. 0.74*100=74.

The digits show that your shoppers neglected 74% of their baskets.
Example.png

If you long for a more detailed approach, have a busy schedule, or prefer when software does the job for you, you can turn to Google Analytics. However, the basic version of it 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, specifically pointing out the portion of them that happened during the checkout process. If you want to obtain a profound view of checkout abandonment, you should examine the second one.

To access these reports:

  1. Sign in to your account.
  2. Go to Admin panel.
  3. Select View section.
  4. Open Reports category.
  5. Proceed with Conversions and then Ecommerce. 

Shopping Behavior Analysis Report..png

Shopping Behavior Analysis Report. Retrieved from Google Analytics Enhanced Ecommerce manual.

If you do not have a desire to turn on Enhanced Ecommerce, you can create a calculated metric for it in Universal Analytics (Admin > View > Calculated metrics > New calculated metric). All you have to do is:

  1. Name the KPI.
  2. Select the formatting type (percentage).
  3. Enter the sequence of the operations.
  4. Fill the fields with variables and constants. 

Effortless Computations with a 3-steps Formula

Now that you’ve gained an understanding of how to calculate the cart abandonment rate, it’s time to deduce its formula. Basically, the sequence of operations you’ve executed can be narrowed to this definition:

Cart abandonment rate formula

The division of the total number of transactions by the number of opened carts, subtracted from one and multiplied by a hundred, gives you the percentage of purchases that were initiated but were not completed.

Cart Conversion Rate.png

This formula allows you to obtain the two major indicators that are indispensable to forming a comprehensive view of your website. When analyzed together, shopping cart abandonment and conversion rates permit you to realize the gravity of your state, grasp the motivation behind it, and forecast its possible implications. 

Cart Conversion Rate

It provides you with the percentage of deals that you’ve actually struck over a certain period. This metric is a proportion of the number of orders you received versus the number of established baskets.
Cart.png

This measurement is crucial because it shows how successful you are when it comes to inducing customers to get things from you. It also reflects your progress in terms of achieving your goals.

If you take the statistics of the imaginary shop we analyzed previously, you’ll see that its conversion rate equals 26% because:

  1. 16 000/61 000=0.26
  2. 0.26*100=26.   

Cart Abandonment Rate

So, you know the ratio of opened carts that received the “order” status. Logically, you can figure out the percentage of the purchases that remained unfinished.
Cart Abandonment Rate.png

Example:

  1. 1-0.26=0.74
  2. 0.74*100=74.

Hence, the shopping cart abandonment rate of our fictional online marketplace is 74%. 

What Grading Scale to Apply When Interpreting Your Ratio

Shopping cart abandonment rate can be an informative criterion when it comes to 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 the assessment of the situation. 

Turn Your Traffic Into Sales Today!

Obtaining a skill in abandonment rate calculation is not sufficient until 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 to evaluate your performance is to weigh it up against the results of your competitors. You already discovered that the average cart abandonment rate in the e-commerce sector is 69.82%, based on thorough research conducted by Baymard Institute that amalgamates 46 studies devoted to this subject. 

If your rating is below the average value, you might have minor issues to address, but on the whole, 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 your recovery. 
How to Interpret Cart.png

But it would be too simple if there were no other circumstances that you should take into consideration, right? So, you need to reckon that the average cart abandonment rate may fluctuate vastly between industries because the acquisition of expensive objects usually calls for a more thoughtful decision-making process than shopping for essentials, such as food or housewares. 

Therefore, let’s put the data, collected by Statista, into practice and get a more detailed look at our imaginary store’s statistics.


Shopping cart abandonment rate by industries in March 2021.png

Shopping cart abandonment rate by industries in March 2021. Retrieved from Statista.

Variant 1.

If: This shop helps to search and obtain plane tickets. The average abandonment rate of the airplane sector is approximately 80%.

Then: The verdict should be “good”. 

Variant 2.

If: The marketplace sells groceries. The average abandonment rate across this industry is around 60%.

Then:  The judicial statement is “bad”.   

If you want to know more about the ways cart abandonment can affect a particular industry, you can read our article on cart abandonment in retail.   

Important note:

People can be motivated or subtly swayed to get stuff from you, but they cannot be controlled or forced. That is why you should never expect your shopping cart abandonment rate to reach zero. Dismiss this goal as unrealistic and replace it with a feasible one.  

Bring Other Factors into the Equation

According to Econsultancy's report, published by Marketing Charts, only 26% of companies exert efforts to bring back users who fled their website, and that is a mistake. They could reach an 18%-53% recovery rate if they attempted to retarget this demographic. 

But what incentives can business owners use to lure customers back? It depends directly on the motivation behind the people’s abandonment. 
Post-abandonment shopping cart recovery rate.png

Post-abandonment shopping cart recovery rate. Retrieved from Marketing Charts.

Baymard Institute analyzed more than a dozen reasons for cart abandonment. They concluded that although vague motives, such as “I was just browsing/not ready to buy” are challenging to address, there are a plethora of causes that could be resolved without time-consuming or expensive measures, like unoptimized checkout flow, lack of shipping or payment options, software glitches, and inadequate design.    


The most common reasons for abandoning online shopping carts in 2021.png

The most common reasons for abandoning online shopping carts in 2021. Retrieved from Baymard Institute.

If you pick a complex approach to the interpretation of your shopping cart abandonment rate, you can discover the roots of customers’ dropouts. Here are some of the most valuable indicators when it comes to cart abandonment analysis, besides conversion rate. 

Shopping Behavior

The path to software:

Recipe to make it a helpful tool:

  • Monitor the parameters like the total number of visits, sessions with no shopping activity, add to cart & checkout actions, and add to cart/checkout abandonment.
  • Determine which funnel’s stages are potentially problematic. 

Checkout Behavior

The path to software:

Recipe to make it a helpful tool:

  • Review the checkout process step-by-step to find out when the dropouts tend to occur. 

Average Order Value (AOV)

The path to software:

Recipe to make it a helpful tool:

  • Use the average total price of products and services in the customer's cart to calculate how grave the situation is in terms of revenue loss.

Site Speed

The path to software:

Recipe to make it a helpful tool:

  • 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

The path to software:

Recipe to make it a helpful tool:

  • Design funnels that have 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 out the elements that need improvement.

User Explorer

The path to software:

Recipe to make it a helpful tool:

  • Investigate the shopping behavioral patterns of a particular user to find inspiration for your remarketing campaign. 
  • See what the person browsed, viewed, bought, or added to the cart, but didn’t end up purchasing to remind about the cart contents, offer complimentary items, and come up with personalized recommendations. 

Surely, the benefits of gathering and analyzing statistical data are hard to underestimate. Yet, sometimes it is better to ask the audience directly, and there is nothing more suitable for this purpose than pop-up messages. Use Claspo simple and functional pop-up builder to develop creative and friendly feedback forms that visitors can quickly fill in when they express an intent to close the site.


You can use a NOVASOL’s message as an illustration of a pop-up feedback form..png

You can use a NOVASOL’s message as an illustration of a pop-up feedback form.        

Conclusion

The ultimate way to assess the extent of cart abandonment’s negative impact on your platform’s performance is to calculate the cart abandonment rate. Although its formula doesn’t involve any complicated mathematical operations, the digits alone will not allow you to see the whole picture. 

Thus, it should be interpreted together with other influential factors, such as your industry’s average ratio, conversion rate, site speed, average order value, or users’ behavioral patterns. A systematic approach to the metric’s analysis will help you understand what prevents people from placing orders or grant you ideas and insights for your action plan.   

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