In the rapidly changing world of e-commerce, the phenomenon of "abandoned carts" represents a significant concern for businesses seeking to maximize their online sales. Imagine you spend money on marketing, you convince the customer to come to your site, and you even manage to get them to add products to the cart. But they just leave! Why does it happen? What can you do about it? To find out the answer to those questions - keep reading.
Abandoned carts refer to instances where a potential customer initiates a transaction by adding items to their shopping cart but then unexpectedly leaves the site without completing the purchase. There are many studies in this area, and some of them suggest that even up to 75% of carts get abandoned. This issue represents a critical point of leakage in the sales funnel, where interested customers slip away just steps away from converting their interest into a transaction. After all the effort, money, and creativity you’ve put into getting customers on your website, you can't just let them go. As such, understanding the reasons behind cart abandonment and devising effective strategies to counteract this trend is essential for e-commerce businesses.
Understanding the magnitude of abandoned carts is a critical first step toward addressing the issue. The process involves quantifying how frequently users leave their carts without making a purchase. The importance of measuring this metric cannot be overstated. By keeping track of abandoned carts, businesses can get a clear picture of potential lost revenue and uncover specific areas in their purchasing process that may need improvement.
To measure the abandoned cart rate, businesses often utilize analytics tools integrated with their e-commerce platforms. These tools track the user's journey on the website, from the moment they land on the page, add products to their cart, and up to the point where they either make a purchase or exit the site. The abandoned cart rate is typically calculated by dividing the total number of completed purchases by the total number of carts created, subtracting the result from one, and then multiplying by 100 to get a percentage.
Measuring the abandoned cart rate is a key performance indicator (KPI) for any e-commerce business. It serves as an essential signal for identifying issues within the checkout process that might be causing customers to leave without completing their purchase. Additionally, tracking this metric over time can provide insight into whether changes to the website or checkout process have a positive or negative effect on cart abandonment. It's a valuable metric that, when combined with other data points and customer feedback, can guide effective strategies for improving conversion rates and overall sales.
If your solution does not provide any tooling to measure that, we can help you figure it out.
According to SalesCycle research, approximately one-third of users are not looking to buy but are simply browsing. 23% are unwilling to pay shipping costs. You should take this into account when deciding which areas of the user journey you want to optimize and your desired objectives.
What is particularly intriguing is that according to their research, a third of users abandon checkouts because they are required to create an account.
These values may differ for your domain but feel free to use them as the first starting point.
It seems that if a business can afford to offer free shipping and allow orders without registration, it has an advantage right from the start.
Cart abandonment usually occurs in a context, which is why it's worthwhile to measure more user behaviors than just the act of abandoning the cart. Insight into user behavior is vital in mitigating the issue of abandoned carts. There are several critical actions on your website that can provide valuable information about potential barriers in your purchase process. These include:
Whether these statistics come in the form of visual charts or text reports, understanding these metrics will give you a clearer understanding of the scale of abandoned carts on your platform. It’s about more than just the numbers—it's about the story they tell. A thorough analysis of these metrics will help identify problem areas and guide strategies for improvement, potentially unlocking substantial gains for your e-commerce business. Remember, every step of the customer journey matters, and data analysis can provide the insights needed to make that journey as seamless as possible.
If we are already measuring the number of abandoned carts, we can consider adding an additional alert. This will look different for B2B and B2C customers, with one scenario which applies to both.
If you notice a sudden increase in abandoned carts, it is most likely that there is an error in your checkout process or an unforeseen change has occurred. In either case, immediate action is necessary to investigate and address the issue.
Dedicated monitoring for B2B customers should consider the nature of B2B transactions. While the number of these transactions is often lower, they have a higher volume and often occur with our business partners with whom we have a closer relationship than typical B2C customers.
Here, we can consider setting up an alert every time a B2B customer abandons their cart. Since we often have direct contact with B2B customers, we can send them an SMS or email, and for high-value transactions, we can even make a phone call. When making a phone call, many possibilities open up, from inquiring about the issue to offering a discount, some freebie, or any other benefit. However, in the case of a consultant call, it may also be advice and help in resolving doubts about the product or showing the advantage over the competition's products.
A less intrusive (but less effective method) would be to remember the basket in the system and remind the customer on their next visit that they left the basket last time with an invitation to reconsider the order (maybe this time with a promotion?).
Important note: it will be good to limit the number of our ‘gifts’ so as not to teach the user to abuse our system. Also, we should set up transaction amount thresholds so our consultants do only a profitable job.
It will also be good to take into account the behavior of specific customers. In one of the B2B sales systems, we manage that one customer has a specific workflow. Many users from company X had access to the store, but they used shared login data. Employees did the order using a shared basket and then placed one shared order at the end of the month. This means that they abandoned the cart so that another employee could return to it and add more products. We do not want to disturb or annoy such a customer with unnecessary correspondence.
In this type of sale, if we have access to the customer's phone or email (and permission to send content), we can proceed similarly to a B2B customer. The problem arises when the customer is one of many anonymous customers visiting our store.
Here, the most common practice is to recognize when users have returned to our website and initiate communication with them.
In the past, it was enough to leave a cookie, but in the case of EU requirements, such a cookie will not be treated as necessary, and the user must give their consent. Most people accept such agreements, but extensions that automatically select the minimum level of cookies are becoming increasingly popular. Then we have to recognize the anonymous user through a set of individual characteristics such as screen resolution, browser version, and operating system. How to do this we will discuss in one of the next articles.
However, there is no cause for concern for now. Most of the time, you will still be able to create a cookie and recognize that person. The level of your involvement in recognizing the customer will depend on what you are selling. Recognizing that the user has returned to the page will have a different degree of sophistication for a store selling clothes than for a store offering sports cars.
For registered users, solutions usually use notifications and mailing. For anonymous users, you can prepare a smart block on your page to recognize users and display your persuasive message.
Customer behaviors in B2C should also be included in our rules of response. Depending on the industry, you should consider people who add products to the cart but wait for their paycheck to buy. According to research, the least amount of cart abandonment coincides with payday (23rd-7th). Isn’t that a perfect time to send out a reminder about products left in a cart?
Out-of-the-box solutions usually offer a limited configurability for individual business needs. If you plan to perform only basic actions, chances are that your system already supports them. In dedicated solutions, you can spread our wings, so feel free to contact us to explore tailored possibilities that suit your needs.
We already know what to do when a customer abandons their shopping cart. But what if we could predict if a user will abandon our shopping cart within the next 15 minutes? Recent years have seen many new solutions that rely on artificial intelligence, and even now, AI is helping to solve similar problems. Mobile network providers or banks track their users' steps, and AI systems assess how likely it is that the customer will want to leave soon. People with a high-risk coefficient may receive a pre-emptive offer as it turns out that convincing a customer who is yet unaware that they have made a decision to leave is easier than a customer who has already realized it.
No matter which method of reaction you decide to take and how complicated your business rules will be, automating the process of recovering lost baskets will pay off, and thanks to the process of data acquisition, you will learn more about your customers. If you are interested in such functionality, contact us, and we will help you check how much you can gain from it and find the solution that is most suitable for your business if the numbers confirm the sense of such an investment.
In the realm of e-commerce, abandoned carts represent significant lost opportunities, yet they are not the final step in the sales process. Understanding the reasons behind such behavior and crafting effective strategies can help recover these potential sales. Measuring the frequency of cart abandonment using analytics tools and tracking key user behaviors provide invaluable insights into the customer journey. Such understanding is vital to pinpoint potential problems and opportunities for improvement. By adjusting business strategies accordingly, companies can turn the challenge of abandoned carts into a chance for growth, optimize their sales process, and enhance their overall performance.
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