Nothing frustrates an e-commerce owner more than an cart abandonment.It seems like as a store owner you have everything perfect to attract the customer, but there is something that went amiss and you just missed a potential customer.
A lot of customers read reviews, choose a product and add it to the cart, finally abandon the cart. As per Baymard Institute, 69% of shoppers abandon their carts. This leads to about $260 billion loss in revenue.
However, Sales force data shows that about 60% of shoppers return to complete their purchase after receiving a personalized cart abandonment email. At the same time, about 75% of users planned to come back and shop at a later point in time. On an average,it’s about 1 in 4 customers that complete their purchase.
What exactly is Cart Abandonment?
Cart abandonment occurs when customers add items into their virtual shopping cart and then, for whatever reason, leave the website without completing their purchase. It’s part of a wider range of “abandonment” terms used in e-commerce, which include-
- Booking Abandonment:When a customer starts booking accommodation or a flight and then backs out at the last minute.
- Browse Abandonment: This is similar to cart abandonment, except in this case the potential customer doesn’t add any items to their virtual cart. They simply browse the site and then leave.
- Form Abandonment: When a prospective customer fails to finalize a quote, subscription, or product purchase because they’re required to complete a long form.
Each of the above types of abandonment contributes to revenue loss. This is one of the reasons it is important to identify this and correct it. Otherwise, the company is at a risk of losing out on revenue opportunities.
Why does cart abandonment matter?
If your store has a high cart abandonment rate, it means your customers started their purchasing journey but had second thoughts somewhere along the way.
There could be multiple factors affecting a customer’s choice. It’s possible that the customer’s decision to abandon their purchase was influenced by factors outside your control.
Perhaps they were conducting price research or decided they wanted to buy the product in-person instead—or your cart abandonment rates could be equally influenced by your store policies.
Cart abandonment percentage varies based on product, market trends, discounts,and various other factors influence customer behavior.
As per Ralph Dangelmaier, CEO of BlueSnap 59% of shoppers will abandon their shopping carts if they do not see a checkout page with their local currency, payment type,and language.
The relation between Cart Abandonment, Industry,and other factors
Cart abandonment rates vary based on the industry. So, the trend of cart abandonment is different for finance, travel or fashion industry. Within the same industry, cart abandonment varies based on the sub-industry type.
So, the cart abandonment to a greater extent can be reduced by locating the contributing factors and correcting them. A minor reduction in cart abandonment can provide a substantial increase in profits.
For instance, in the first quarter of 2018, the average cart abandonment rate was 75.6%, while the travel and finance industries experienced abandonment rates above the global average.
While there are various contributing factors that influence cart abandonment rates, some of these industry-specific abandonment rates and depend on the nature of the purchasing journey in that industry. Fashion has below-average abandonment rates largely because buying clothes is a quick and straightforward process. On the other hand, finance purchases are often accompanied by lengthy applications that customers may find more tedious or frustrating.
Sometimes, reviews, research and price comparisons can be also a contributing factor to cart abandonment. This is the case with the travel industry.
Few Stats about Cart Abandonment
Research indicates that cart abandonment is on the rise. As per a study conducted by Barilliance, the average global abandonment increased from 77.24% to 78.65 in 2017. On an average with almost 75% of online shoppers abandoning the online purchase, you can imagine the amount of impact on the company’s earnings.
Statistic revealed that global cart abandonment grew by nearly 16% over the last 11 years.
Interestingly, cart abandonment rates are also influenced by the type of device online shoppers use. Brilliance provided some stats on the average cart abandonment based on device type. This is as shown below.
As per a study by Loqate, most mobile users abandoned their carts when their shopping experience is inconvenient.
- 39% of mobile users abandoned their carts after they had issues entering their personal information
- 35% abandoned their cart because their screen felt cramped or too small
- 27% abandoned their cart due to problems entering their order correctly
The above findings reveal that unresponsive website design significantly impact the cart abandonment in the case of mobile users. Making a website mobile responsive is simple and improves your SEO ranking.
Moreover, the checkout process should be seamless and short. The inconvenience of lengthy forms and heavy checkouts can be tiresome for most mobile users and this could be the biggest contributing factor for cart abandonment through mobile devices.
Top Reasons for Cart Abandonment
Before we try to rectify cart abandonment, it is important to understand the reasons due to which cart abandonment can happen. Understanding these reasons and rectifying it can take your business a long way.
While we can reduce cart abandonment, there is no way we can completely eliminate it. This means to a greater extent this is unavoidable. There are many reasons why a potential customer decides to abandon a purchase that has nothing to do with your product, services, or website design.
There are versatile reasons provided by shoppers who abandon the purchase process. Few of the top reasons are-
- Unexpected Shipping cost – 25%
- Required to create a new account to finalize an order – 22%
- Customers doing a research and review with no intention of buying – 17%
Survey over the past few years proves that most people abandon their carts owing to two main reasons-
- They never had the intention to buy the product
- They eventually became frustrated with the customer service and the buying process
Baymard Institute conducted a study about cart checkout and this is how the funnel looks like.
This study is helpful to understand the bifurcation of different issues faced by customers. This data tells us that customers value a convenient and efficient shopping experience.
While money remains the main motivator for cart abandonment, things like multiple payment options, speedy delivery times, up-front costs, and a hassle-free purchasing process are all elements that customers look for while shopping online.
Step by Step Guide to Create Cart Abandonment Campaigns
A lot of e-commerce marketers try to retain lost customers through retargeting ads. These shoppers are in most cases retargeted through social media platform such as Facebook Ads. In most cases, marketers lack a proper marketing strategy to target potential customers.
Though retargeting is an effective way to bring back your customers, the most important tactic to target cart abandonment is through email marketing. Cart abandonment emails provide high conversion and have a high click rate as compared to promotional emails.
Also, stats over a period of time prove that email marketing has a higher ROI as compared to social media marketing, content marketing,and SEO.
To understand how effective are abandonment emails, let us consider the following stats-
- Abandonment emails on an average have a success rate of 30%
- On an average, the first email in a multi-email sequence has an open rate of 54% and a click-through rate of 28%
- Few fashion companies, in the past, have benefited from a 300% increase in cart recovery sales by incorporating cart abandonment email campaigns
How to build an effective email strategy?
Timing is very important while sending out cart abandonment emails. In case you contact your potential customer too soon, then you would seem pushy. At the same time if you take too long to contact a potential customer then chances of conversion would diminish.
Most experts usually recommend sending your first email an hour after the cart has been abandoned, followed a follow-up email 24 hours later and a final email delivered three days after your first email.
The reason why the need to wait for an hour before sending an email is because this is when you have the best chances of hitting a conversion. This can be seen through the below data representation.
It’s best to tackle abandonment emails in three stages-
- The first email should focus on engaging with the customer. Start a conversation and remind them that they have left the cart midway.
- The second email should encourage the customer to make the purchase. This should be in a helpful tone. Tell the customers that you have observed the cart being left halfway through the purchase process and check if there are any problems. Provide assistance wherever required.
- The last email should contain relevant perks or discounts to encourage the user to complete their purchase process. Send them the coupon code and let them know that they are entitled to
It’s important that you do not give the discount at the very beginning. Otherwise, you would eliminate the chances of earning from a potential customer using first and second email.
The email which is sent should be eye-catching. Unless it grabs the attention of your customer, it’s very unlikely that you would be able to get a conversion. Keep the tone as helpful and supportive.
The subject line is the key and it should be impactful. One such example of a subject line is- “Oops – Was there a problem checking out?”
For the subsequent email, add the discount in the subject line. This will encourage the recipient of the email to complete the purchase.
Leverage the Power of Social Proof
Research shows that almost 75% of customers intend to complete their purchase later.However, out of this only 10% cart abandoners complete the buying process. This leaves a large portion of customers who can be retargeted and engaged through cart abandonment campaigns.
To start with, social proof is one of the most powerful tools available that you have at your disposal. By including simple strategies such as reviews, comments, customer testimonials you can effectively persuade the customer to purchase a product. This is also commonly referred to as the “BandWagon” effect.
Incorporating elements of social proof into your abandonment emails is a great way to attract customers. This increases the likelihood of potential customers coming back and completing their abandoned shopping.
Here’s how you can incorporate social proof-
- Choose the Right Product: Review the list of products in the customer’s abandoned cart and choose the one product they’re most likely to purchase. This will be the product you include in your abandonment email.
- Sell It: Talk about the benefits of owning the product, as well as what your customers are missing out on by not purchasing it.
- Bring in the Social Proof: Including a simple rating or product review in your email can go a long way towards maximizing your abandoned cart recovery. Not only do these elements draw more attention to the product, but it also tells the reader how the product has helped similar customers.
Most of the times, customers who abandoned their carts still plan on buying the products, just not at this moment. Social proof in the form of testimonials and ratings are great for reminding those customers why they initially wanted the product, while also incorporating other shoppers’ experiences to illustrate the value that the product brings.
As an example, on how effective can social proof be, a fashion company Roasted Fox benefited from a massive 33% increase in abandoned cart recoveries.
Provide Incentives through Loyalty Programs and Rewards
The next step in reducing cart abandonment rates is to create a customer incentive campaign. Loyalty and rewards programs work well at reducing abandonment issues, as they give customers an additional reason to shop with you. Providing discounts or free merchandise is a great way to provide incentives.
Recent studies by Smile.io show that customers who belong to a rewards or loyalty program spend 55% more money on average than non-members. In a study conducted by Virtual Incentives, 56% of consumers admitted personalized incentives positively impact their purchasing decisions. Moreover, only 40% of customers surveyed have actually received personalized incentives. This means there’s a huge demand for personalized incentivization in marketing.
Using platforms such as Smile.io, you can add a reward program into your abandonment recovery campaign.
Segment Cart Abandonment Emails
Consider creating emails for your most loyal customers that include a tailored remarketing sequence. Incorporate systems to monitor and automate based on spending threshold.
Within the remarketing emails, highlight the customer’s balance points or proximity to a reward. Remind the customer that the product purchased from the abandoned cart will be applied towards the reward.
Some experiments have shown that this approach can increase 6 to 12 times recovered revenue per email.
What we can take away from this is – More than just a recovery strategy, a well-executed incentivization campaign is instrumental in establishing a long-lasting relationship with your customers.
Remarketing to bring back shoppers
Remarketing is an excellent, cost-effective way to increase brand awareness and remind potential customers about your products. Basically, when a customer visits your e-commerce site and fails to make a purchase, they’ll see your advertisements when they visit websites that show advertisements from elsewhere on Google.
This is ideal for reaching out to customers who were seriously considering making a purchase. Remarketing works to keep your products at the forefront of your customer’s minds as they browse other sites.
You can even leverage the power of remarketing on popular social media platforms like Facebook, which is especially useful for targeting a mobile audience. Digital marketing tools such as Shoelace make it quick and easy to automate a retargeting campaign using Facebook or Instagram.
Similar to email marketing, the Facebook messenger can also be effectively used to connect with your target audience. Marketing platform such as Recart, allow you to use Messenger as part of your abandonment cart recovery campaign.
Recart sends automated messages to potential customers, reminding them of the items left in their shopping cart while placing them one click away from finalizing their purchase.
Combining social media along with an effective email marketing can open multiple channels of communication between you and your customers. This is especially helpful when engaging with prospective buyers who abandoned orders for reasons unrelated to your product.
Remarketing efforts can help you recover as much as 11% of your abandoned carts in a month.
Reduce the complexity of Checkouts
Accessibility and ease of usage play a key role in determining whether the average customer will finalize their purchase or abandon their cart. Websites that are clunky or have unnecessarily complicated checkout procedures are far more likely to have a higher cart abandonment rate than sleek, optimized virtual websites.
Removing unnecessary friction in your existing buying process can increase conversion rates. A good place to start is your forms. Research conducted by the Baymard Institute reveals that 61% of the top e-commerce sites in the US require customers to disclose “seemingly unnecessary” information during the checkout procedure.
Do not capture unnecessary information that you may never use. Optimizing the checkout process is fast and easy. This is a straightforward process. Remove all the unnecessary forms and ensure the customer needs to add only relevant details. A lot of times adding a guest checkout option helps. This is useful for customers who do not wish to sign-up at that moment while buying a product.
The next element that could be causing unnecessary friction is poor customer support. Whether the buyer has a question about your product description or they’re experiencing an issue with your payment gateway, they expect assistance as soon as possible.
The best way to address this issue is by adding a live chat option. Research by Forrester proves that 44% of online shoppers believe that the ability to chat with a customer support representative in the middle of their purchase is one of the important services that every e-commerce website should provide.
Build trust during the checkout process
Online shopping is all about building trust. The customers provide the credit card details with a trust that you would not use these details for any other purpose. With the kind of malicious activities in the existing system, several shoppers are reluctant to shop online.
This is true for smaller companies which are scaling up. It’s important that the customer feels their personal data is safe. It’s easy to build trust by adding trust logos on your website.
Research reveals that 61% of online shoppers abandon carts when they don’t see trust logos. Also, 75% of the customers don’t make a purchase because they don’t recognize a specific trust logo on the website.
A study by CXL Institute says that PayPal and Google logos received the most attention and are eye-catching. The others included are Norton, McAfee. Also, ensure you provide sufficient information to highlight you offer SSL Secure connection which makes customer’s data secure and encrypted. Protecting it from third-party snooping.
Additionally, ensure you are PCI compliant and highlight the same on your website.
Provide alternate payment options
A lot of online shoppers are skeptical about online payment irrespective of the trust logos you add. Certain products can be given an additional Cash on Delivery option.
Over your email campaign, specify the payment options available for completing the buying process. Also, ensure to highlight if Cash on Delivery is an available option.
Leverage elements of Scarcity
In online shopping, scarcity is an effective way to arouse interest in buying a product. Provide customer a limited period offers to take advantage. Create a sense of urgency and motivate the customer to take immediate action.
There is a reason why scarcity drives uninspired customers to spend money on a product.
- Scarcity gives a feeling of exclusiveness. The customer feels special since they received an exclusive offer.
- A lot of times, people assume scarce products are more popular.
- More value is assigned to scarce items.
A lot of customers do not wish to miss a good opportunity. The feeling of loss is twice as powerful as the pleasure of gaining something. Which means most customers will put in more efforts to avoid losing as compared to gaining something. This theory makes complete sense as to why countdown timers are so effective in e-commerce.
Other ways include-
- Limit the quantity of a product being sold
- Sell an item for a limited amount of time
- Offer special deals like free shipping or 15% off for customers who buy within a specific time frame
Finally, a recap of this. Cart abandonment can be due to various reasons. A significant portion of cart abandonment can be reduced by effectively incorporating the above techniques.
Making the business seamless, quicker and safer is one of the key strategies along with email marketing to retarget potential customers.
Remarketing, social media engagement, discounts, personalized loyalty programs can be used successfully to boost your conversion. Cart abandonment is not something negative. On the other hand, this lets you give a personal touch and get connected to your audience.