About 70% of online shopping carts are abandoned before the customer completes the purchase—that's over two-thirds of possible sales slipping through the cracks.
We've all seen it happen—cart abandonment is no stranger to online retailers. Of course, some cart abandonment is inevitable as shoppers browse digitally, get sidetracked, or find other reasons to step away from a purchase.
But here's the kicker: a significant portion of cart abandonment is down to how merchants set up their checkout and process their payments.
To tackle this head-on, businesses must grasp industry benchmarks for cart abandonment rates and adopt best practices to boost their key performance indicators (KPIs). Ignoring this could mean losing out on a sale while potential customers vanish.
In this article, we'll explore average cart abandonment rates, uncover causes and effects, and provide actionable strategies to reduce abandonment rates and transform them into successful conversions.
What is cart abandonment in ecommerce?
Cart abandonment happens when a user adds items to their online shopping cart but leaves the website without completing the purchase. This means lost sales and wasted marketing efforts for the merchant.
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The average shopping cart abandonment rate
The average rate of shopping cart abandonment sits at 70.1%. However, it's important to note that this statistic can vary significantly across different industries. So, let's dive into some recent data to examine how cart abandonment rates differ across various sectors.
Beauty & Personal Care: 82.87%
Home & Furniture: 79.10%
Luxury & Jewelry: 77.15%
Fashion, Accessories, and Apparel: 76.94%
Multi-Brand Retail: 67.33%
Pet Care & Veterinary Services: 60.22%
Food & Beverage: 38.16%
Consumer Goods: 33.59%
Various factors influence industry-specific cart abandonment rates, such as how urgently a purchase is needed, the available product choices, where the customer prefers to shop, and whether the customer is just browsing or intending to buy.
Customers might also encounter false declines—when a transaction that the customer initiates wrongly fails. This can occur for various reasons. For instance, a payment might be flagged as fraudulent, or there could be an issue in the payment processing flow. Regardless of the cause, consumers are unhappy with this experience, leading to merchants losing billions of dollars globally due to abandoned carts.
To reduce the occurrence of false declines, merchants have several measures they can implement. In this blog post, we will explore these measures, focusing on improving payment authorization rates.
Why do people abandon their online shopping carts?
Consumers abandon their shopping carts for various reasons, and while some of these reasons are well-known, our research has reinforced these factors and unveiled some new insights as well. Here are some findings from our UK-based ecommerce survey on why people abandon their carts:
- Extra costs are too high: Nearly half of the surveyed shoppers cite high delivery costs as the main reason for cart abandonment, espcially when combined with long delivery times.
- The checkout is too long and confusing: The checkout process was highlighted as the fifth most frustrating aspect for online shoppers.
- Payment security concerns: 51% of our respondents feel worried about how safe online transactions are. Our study also indicates that when shoppers feel their payment security worries are correctly handled, nearly 47% are more likely to return and finalize their transactions.
- Lack of desirable payment options: 69% of shoppers may abandon carts that don’t offer their preferred payment methods, and a slow payment process can push away 76% of potential buyers.
Learn more about why people abandon their carts in this blog.
The impact of cart abandonment on businesses
High cart abandonment rates are more than just a statistic; they're a complex issue that can seriously affect a business's growth and success. Here's why cart abandonment is terrible for business.
Lost revenue
When customers abandon their shopping carts, it directly leads to lost revenue.
Increased cost per conversion
Cart abandonment not only hurts earnings. It also makes every sale more expensive to achieve. Companies spend extra money on advertising to win back customers and get them to complete their purchases. This drains budgets, time, and resources, hurting business efficiency and taking attention away from critical areas.
Damaged customer relationships
While cart abandonment affects finances, it also impacts how customers view the business. If customers leave their carts due to payment problems or security concerns, it can cause frustration and erode trust. High cart abandonment rates signal checkout or shopping experience issues, discouraging customers from returning. Over time, this harms the brand's reputation and weakens customer loyalty.
Business insight challenges
Cart abandonment can inaccurately represent sales performance, revenue, and customer behavior. Business metrics such as conversion rate, average order value, and revenue per visitor may appear lower than they are, as abandoned carts are not factored into completed transactions. Misinterpreting these metrics might lead to ill-judged strategic decisions, such as ineffective marketing campaigns or misguided inventory management.
Best practices for reducing average cart abandonment rates
Let’s explore the best practices for lowering average cart abandonment rates and boosting conversions.
Streamline the checkout process.
Address the following key aspects to create a frictionless checkout process:
- Diversify payment options, accommodating various preferences such as digital wallets, local favorites, and buy-now-pay-later solutions.
- Implement a seamless one-click checkout feature that expedites the payment journey.
- Reduce transaction failures through rigorous testing and optimization of the payment gateway.
Be transparent about all costs
Customers appreciate honesty. When merchants provide transparent information about product prices, shipping fees, taxes, and any potential additional charges upfront, it builds trust and confidence in purchasing. This transparency leads to higher conversion rates and a more satisfying online shopping experience.
Embrace automation
Automation is a big trend, with 91% of retailers already investing or planning to invest in it. The benefits are clear: By using automation to guide customers, offer personalized recommendations, and streamline checkouts, you can significantly reduce cart abandonment rates. Remember, this isn't a one-time effort but an ongoing improvement journey in the ever-changing e-commerce landscape.
Automate smarter and faster with Primer.
Reward loyal customers
Loyalty matters. A substantial 36% of consumers now see loyalty programs as necessary. Recognize the value of retaining loyal customers through thoughtful engagement. Providing exclusive discounts, personalized offers, or early access to new products encourages them to complete purchases and strengthens their commitment to your brand.
The bottom line
Cart abandonment significantly impacts merchants' finances, advertising, customer relationships, and operational efficiency in online commerce. However, a positive outlook still exists.
By benchmarking against industry standards and average cart abandonment rates and embracing best practices, merchants can ensure they're not just keeping pace with their competitors but potentially moving ahead of them.
Turning the challenge of cart abandonment into an opportunity requires delving into its root causes and the subsequent chain reactions. Tactics like simplifying the payment process, offering diverse choices, and using re-engagement strategies can help businesses achieve higher conversion rates and ensure ongoing growth.
Discover how Universal Checkout empowers merchants to build a world-class checkout experience.
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