In this article we will discuss the cost of shopping cart abandonment, some reasons why this may happen, and suggest some remedies to reduce the amount of shopping cart abandonment on your ecommerce website.

What is shopping cart abandonment?

Shopping cart abandonment is a coined phrase used in internet retailing and refers to a case where a customer is shopping on your ecommerce website, finds an item(s) of interest and places it in the shopping cart, or clicks the “Add To Cart” button. Now, for a variety of reasons, the customer has decided not to complete the order and leaves the website with the items still in their shopping cart.

How much does shopping cart abandonment cost?

According to the U.S. Census Burea and the U.S. Department of Commerce, total ecommerce sales for the year of 2008 were estimated at $134.7 billion.

Internet retailers report shopping cart abandonment rates in excess of 50-60%. This number is calculated by taking the number of customers who completed an online purchase from an ecommerce website and dividing it by the number of customers who added an item to their shopping cart. Just imagine the revenue being missed from these online shopping websites.

To put this into perspective, let’s use a small online retailer as an example that has:

• 5000 monthly visitors
• an average order value of $30.00
• an engagement rate of 10% (percent of visitors who add an item(s) to the cart)
• a shopping cart abandonment rate of 50%

In this example, that would mean 500 people in a month’s time added items to the shopping cart. Only 250 of those completed the order. This gives the internet retailer gross revenues of $7500.

What if we were to reduce the shopping cart abandonment rate down to 30%?

Out of the 500 people who added items to the shopping cart, now 350 of those completed the order. The gross revenue realized is now $10,500. That’s an increase of 40% in revenue just by reducing the shopping cart abandonment rate by 20%.

Before you get excited about changing things on your ecommerce website, it is important to understand the reasons behind shopping cart abandonment.

What are the causes of shopping cart abandonment?

Reason: Comparison Shoppers – When people are shopping online and come across products of interest, they need a place to “hold” their items until they decide if they are going to make a purchase. So they add the items to their cart and continue browsing your website or another website. Only when they have found the product that fits their buying criteria do they complete the transaction. Maybe another website offered the items with special promotions, such as FREE Shipping to win the customer over.

Solution: Add To Compare List / Wishlist – Offer visitors to your website a comparison feature to allow them to see items that they are considering side-by-side. This shows your customers that you care enough to assist them in their shopping experience and make the decision process easier for them. A wishlist feature offers registered users of your ecommerce website a place to hold items for purchase at a later date.

Reason: Product May Not Be As Expected – When shopping online, it is not uncommon for a visitor to be reluctant placing an order for fear of the item they will receive will not be like what they were presented on your website.

Solution: Simulate In-store Selling - Online shopping may never simulate the full bricks-and-mortar shopping experience, so it is even more important when selling online to give clear and detailed product descriptions along with quality images of your products. Include pictures of your product in use. If you sell apparel, show the article of clothing on a model or mannequin instead of just lying on a table. If your product comes in a variety of colors, show examples of each option. Product zoom capabilities are becoming more standard in ecommerce selling and can be used to display fine details of your products. Be sure to display your “No-Hassle Return Policy” prominently. A live chat feature or toll-free number may also give the impression that help from your company is easily accessible.

Reason: Surprise Pricing or Other Charges – When shopping in a physical store, the price on the tag is typically the price the customer expects to pay for that item. Ecommerce shouldn’t be any different. If an item is added to the shopping cart, and upon proceeding to  finalize the order, shipping and handling charges, sales tax, and other miscellaneous charges are introduced, you can be sure to lose customers at this point.

Solution: Disclose All Pricing Information – Introduce tools before checkout, like real-time quotes from third-party carriers such as UPS, USPS, FedEx, or DHL. Display sales tax charges in the shopping cart along with shipping cost. Disclose any additional charges that may apply on relevant product pages. A perpetual shopping cart, or mini-cart, will display a running total of items currently added to the shopping cart amongst all pages on your website.

Reason: Forced Registration – After items have been added to the shopping cart, and your visitor is ready to begin the checkout process, they are sent to a page that asks them to either login or create an account with your company. Especially if your business is new to ecommerce, or hasn’t yet established it’s brand as a leader in your industry, this is a big turn-off to online shoppers. Why should they have to register? They don’t know what kind of service you follow through with. They don’t yet know the quality of your products. They may never return to your website again. They may have pre-conceived notions about what you might do with their registration information.

Solution: Check-out As A Guest – By allowing your visitors to checkout as a guest, you display that you care about their privacy. You then only need to collect information that is needed to complete the transaction and not store additional details about them.

Reason: Interruptions – Let’s face it. Most of our online shopping is done from the comforts of our home. You know the place where our lives take place, where kids demand our attention, where relatives call us, friends come over to visit. Any of these interruptions can interfere with the selling of goods on your website. We can’t stop this, but…

Solution: Hold That Cart – By saving a customer’s session, you allow them to pick up where they left off when they return. This saves them from having to browse for the products again and add them to the shopping cart. Also, you can send them a reminder email that simply states that, as a courtesy you are holding the items in their cart for when they return. If you want to really entice them to return and complete the sale, try offering a limited time special deal if they return to place their order.

Reason: Security Concerns – With the concerns of indentity theft, spam, and credit card fraud, consumers have become leary of any online retailer that they are unfamiliar with. If the right measures are taken by the online merchant, these ecommerce security concerns can be diminished substancially and put to rest.

Solution: Proper Security Measures – First and foremost, secure your ecommerce website with a reputable third-party encrypted SSL Certificate (Secure Socket Layer) and display it prominently in the header or footer section of your website. This ensures that any information that is passed from the customer’s computer to your website is encrypted in such a way that a malicious person could not decode it. Offer your customer’s alternative payment options such as, PayPal, Google Checkout, BillMeLater, or eBillMe. Display your privacy policy prominently in places where critical consumer shopping decisions are made, such as the shopping cart page and checkout page.

Conclusion to shopping cart abandonment:

While this isn’t a complete list of possible reasons for shopping cart abandonment or their solutions, it touches on the most typical causes that if remedied, could have a desirable increase in growing your online sales with ecommerce.

Best wishes to you and happy ecommerce selling, till next time…

If you have a really high shopping cart abandonment rate on your ecommerce website or don’t know how to tell what that rate is,  and would like to have your ecommerce website analyzed, feel free to get in contact or leave a comment below.

If you have employed any of these solutions in your ecommerce endeavors and would like to share your findings, please do so by commenting below.

Related posts:

1. How-to Articles to Help You Succeed in Internet Retail
2. Interactive Branding: Using Contests To Increase Web Sales
3. Internet Retail Conversion Rates: March 2009

I have been involved in the world of web design since 1997, and as of May 2008 I decided to launch my own web design business. The biggest motivation for this endeavor was seeing a lack of understanding from small business owners as to how they could or should be using the internet to promote their products or services.

As the internet continues to evolve at a rapid pace, more people turn to it to gather information, communicate, and shop. With the day-to-day functions of operating a small business, it is near impossible to stay in tune with what your customers may or may not be doing online, let alone do what is necessary to capitalize on it.

If you believe that your customers don’t buy from online retailers who sell the same  or similar products as you, consider these reports from the U.S. Census Bureau. In the fourth quarter of 2008, consumers spent $31.9 Billion online. Ecommerce sales are expected to be double by the year 2013, despite the current economic conditions. In fact, given the current standings of the American economy, more people are looking for ways to save money or get better value for the money they are already spending.

In conclusion, the company that offers the right product with the best value proposition is going to win the lion’s share of business. Make it easy for your customer’s to do business with your company and you will see it payoff in your bank account.

I hope that you will find value in future articles and look forward to writing helpful articles to guide you on your way to successful online selling.

If you have suggestions or comments about issues that you face with selling your products online, leave a comment below and I will be sure to follow-up to the best of my abilities.

Related posts:

1. 14 Ways to Reduce Shopping Cart Abandonment
2. Internet Retail Conversion Rates: March 2009
3. Interactive Branding: Using Contests To Increase Web Sales