Approaching the Cart Abandonment problem

Approaching the Cart Abandonment problem

If you’ve been running your eCommerce store long enough, you’ve probably heard this statistic: 69% of carts are abandoned by shoppers. In fact, you may be a bit tired of hearing that number, especially if you’re not sure if it even applies to your store, or what you can actually do about it.

Chances are your store has an abandonment rate around that average. At Jilt, we track abandonment rates for stores who are using our app to save these abandoned carts. Our average abandonment rate (among merchants with over $1,000 per month in revenue) is 65%, which is close to the reported average. This is a significant issue when you consider that the average order value for eCommerce shops is over $54.

In short, you’re losing out on a lot of potential revenue. Once you know have an abandoned cart problem — and trust me: you do — you can begin to take the steps necessary to mitigate it. In fact, we recommend approaching this problem from two different angles:

  • First, understand why abandonment happens, and work to reduce the abandonment rate in your store.
  • Second, understand that despite your best efforts, shoppers will still leave carts behind in your store. πŸ™‚ So while you can work to lose fewer carts, you can also work to recover the ones you have lost and convert them back into sales.

Top reasons for cart abandonment

You can address many of the top reasons for cart abandonment before the customer leaves the cart behind on your site. These checkout optimizations can yield large increases in conversion rate, according to the Baymard Institute:

If we focus only on checkout usability issues which we – during the past 7 years of large-scale checkout testing at Baymard Institute – have documented to be solvable, the average large-sized e-commerce site can gain a 35.26% increase in conversion rate though better checkout design.

With that said, if you don’t yet have at least 100 orders per month, you may not have enough data to run tests for conversion rate increases in a statistically significant way, nor are you likely to see as large of a gain in conversion rate as this without significant sales volume. However, even if you can’t accurately measure the impact of checkout optimizations with your own data, you can implement common-sense improvements based on the known top reasons for abandonment.

Cart abandonment rates can be improved by addressing certain elements of your website

The top five areas you should address on your site for abandonment are:

  • Unexpected costs, such as shipping, fees, or taxes
  • Issues with checkout or site performance
  • Requiring a site account
  • Trusting the site with payment data
  • Not feeling comfortable with policies, such a refund policy

Reducing abandonment

You don’t have to address every single one of these points all at once, but Baymard’s top reasons for abandonment offer a fantastic roadmap for site improvements over time.

Unexpected costs or fees

As a digital goods seller, the great news for you is that the top reason for cart abandonment may not apply to your store: 60% of customers note that extra fees, such as shipping, are too high, which is why they leave a cart behind.

However, digital goods stores can still suffer because of unexpected costs. For example, do customers know immediately if tax may be assessed on their purchase in your store? 24% of customers tell Baymard that they couldn’t calculate order total costs up front, from which we can infer that people want to know exactly what they’ll pay for an order as early as possible.

For example, if I were to sell ebooks as a Pennsylvania resident, I’d need to assess tax on sales for anyone with a PA billing address. As such, I can try to show this early in the shopping journey with a widget, or try to add a note next to prices that tax may be added based on shopper locale. Think about any time your store introduces a price other than what’s listed on the product page, then show this to customers as early as possible.

Technical problems with checkout

The second most common reason for abandonment is one I tend to view in the aggregate: having problems checking out. If you look at the Baymard statistics, you’ll see phrases like “too complicated,” “website crashed,” “took too long,” and “process timed out.” All of these reasons are related to having some issues or frustration with the checkout process on-site.

Cart abandonment can be caused by a frustrating checkout experience

Solve these very preventable issues by consistently testing your own checkout with a live order and ensuring that you’re monitoring uptime on your site. When was the last time you ran through your own checkout process for all types of items you sell? (For example, purchasing a regular product and a subscription product if you sell both.) If you haven’t done it within the past couple months, you should absolutely go through this process to see what your customers see when they shop with you.

You should also ensure you’re only showing checkout fields that are required for an order. If you only need the billing postcode for a customer to accurately assess tax (and for fraud prevention), then only show postcode instead of all address fields to cut down the steps needed to complete checkout on your site.

Guest checkout purchases

The third area to address is account creation: 37% of respondents told Baymard they left a site because the site wanted them to create an account. If accounts are not required for your products, then allowing guest checkout is a quick win to increase conversions, since it requires less trust to simply check out than to “register” for a site and allow it to “store” your information.

Of course, encouraging registration is still important. Registered customers are more likely to purchase more than once, more open to marketing communication, and more likely to complete purchases (which presents something of a paradox). To encourage registration as a way to combat future abandonment, I recommend using a post-checkout registration prompt instead, which you can enable with a single click in Jilt for Easy Digital Downloads v1.2 (even without connecting to Jilt!).

Building customer trust

19% of customers cite, “I didn’t trust the site with my credit card information” as a reason they didn’t complete purchase, so making sure customers feel as comfortable as possible is vital to completing purchases.

While trust badges (see below) on checkout are important, providing trust signals throughout your site, like testimonials, product ratings or reviews, and payment logos, helps you build trust throughout the entire shopping process, before the customer even reaches your checkout page.

Trust signals and seals throughout your site help reduce card abandonment

On the checkout itself, you can also add trust seals or certificates from your payment provider or SSL certificate provider to reiterate that your site and checkout are secure.

Clearly publishing policies

Finally, 11% of customers note that unclear return policies caused them to abandon the sale β€” Β this is one I’ve found myself doing as well, especially for shoes or apparel. So does this apply to your store if you’re not selling something that can be returned?

While you may not have a return policy, you may have a refund policy (especially for the plugin and theme sellers out there!). While offering a refund guarantee can help with trust or purchasing objections, it’s most important to set expectations. Even if you don’t offer refunds, be sure to state this on a terms and service page clearly, and show it to customers before they complete a purchase. It’s also helpful to link to these policies in order emails or abandonment recovery emails β€” which is what we get to next. πŸ™‚

Recovering abandoned carts

Now let’s try to tackle the abandonment issue by saving as many abandoned carts as possible. How much money can you recover? Here’s a quick exercise to get a good estimate:

  • Take your average number of orders each month — let’s say it’s 100 — and multiply it by 1.9, which will give you the approximate number of carts that were abandoned (assuming your abandonment rate is in-line with Jilt’s 65% average). This means you’d have 190 abandoned carts.
  • Multiply that number by your average order value. Let’s say that $50 per order. That’s $9,500 of lost revenue from abandonment, some of which we can recover.
  • If you can figure out a way to recover just 15% of those carts, that’s an extra $1,425 per month in revenue for our example merchant.

Let’s frame that a bit better as well: at 100 orders per month and $50 per order, this merchant makes $5,000 per month. An extra $1,425 per month means this merchant is increasing revenue almost 30%, simply by saving 15% of abandoned carts.

Is this realistic? Our average recovery rate for all merchants using Jilt is 12% of all abandoned carts. This average includes merchants who use our default email content without personalization, without adding any branding to their emails, or without addressing causes of abandonment within their emails in a detailed way. If you can be just a bit better than average by making some small tweaks to the default campaign content, reaching a 15% recovery rate is very realistic. For most merchants who do not currently send recovery emails, we see an increase in revenue of about 20% once they implement their first recovery emails.

To start using abandonment recovery emails, you’ll need to track abandoned carts on your store, and for any cart to be recoverable, you’ll need an email address for the customer. At Jilt, we track this in a few ways:

  1. If a customer is logged in when creating a cart, we know the cart is associated with this customer, and can send recovery emails if they don’t complete purchase.
  2. If a customer enters an email address at checkout, but doesn’t place the order, we stash that email address and associate it with this cart to send recovery emails.
  3. You can also try to capture email addresses sooner by asking the customer for an email when adding an item to the cart. We’re about to launch this in Jilt for Easy Digital Downloads v1.3. πŸ™‚Β (You can see what it looks like in action here.)

Regardless of whether you opt to use Jilt or not, you should consider these methods of tracking abandonment to ensure you have the maximum number of recoverable carts.

Next, be sure you’re aware of cart regeneration for your recovery emails. Your customer may start shopping on their desktop, and then come back later on different device to complete an order. Cart regeneration ensures the cart is accurately re-created, regardless of what device is used or how long it’s been since the cart was abandoned, which makes it as simple as possible for customers to complete an abandoned order.

Finally, to recover as many carts as possible, be mindful of the causes for abandonment we’ve outlined above. Your recovery emails should address these causes for abandonment in the email content. Our best practices for recovery emails outline this rough campaign:

  1. Since many customers cite checkout issues as a reason for abandonment, keep this email focused on problems: ask if the customer has questions you can help with before purchasing, or if they ran into issues you can solve.
  2. In email #2, reiterate your questions in number one, and start to overcome purchase objections. If you think customers are running into unexpected fees, you could address this with discounting (being aware of brand devaluation) or talking about your store policies. If you think customers are running into other objections, you can address this from a trust perspective: outline why purchasing from you is safe and secure.
  3. Earlier abandonment emails are more likely to be successful than later ones, so these are where you present “last offer” scenarios: if you plan to offer a discount, do it here. Employ scarcity if you can: note how long an offer will last, or let the customer know the cart is going to expire (even though, with Jilt, we’ll store it even after your site expires the cart so it can be regenerated).

If you see conversions through your last email, it’s also worth looking to move elements of that email to previous ones, especially non-discount elements, to try to increase conversions of earlier emails.

Overall, cart abandonment represents a huge amount of potential revenue for your store that’s often lost. You can influence this metric by optimizing your site to combat common causes of abandonment and reduce your overall abandonment rate.

While these changes can be effective, customers will still leave carts behind on your site if they’re not ready to purchase. As a result, no abandonment strategy is complete without also considering how you can save abandoned sales. Adding an abandonment recovery tool to your store is a proven, effective way to recover some of these carts.

By attacking this problem from both angles, you can drastically increase revenue for your store by encouraging more potential customers to complete a purchase, making the most out of traffic your store already receives.

Illustration by Jessica Johnston.

Comments

Hi Beka! Good article. I would be interested to know your thoughts on how you can implement automatic cart abandonment emails without violating the GDPR? I think it’s going to be difficult to implement current solutions for those trading to or within the EU from May onwards.

Reply

Heya Jack, my understanding is that compliance requires the merchant to (a) ensure opt-in by the customer is explicit (and off by default), and (b) that at the time of opt-in, all usages of the customer data (e.g., which type marketing messages will be sent) should be shown to the customer. With that in mind, I can’t speak for other abandonment solutions, but at Jilt, we think our add-to-cart popover takes the first step here, given we can now expand it to both adjust messaging (asking for consent by entering an email) and show the customer data usage details. We’ll also need to adjust how the email is captured at checkout to present an opt-in for customers for sites requiring GDPR compliance.

We’re not 100% sure of the shape all changes, given it’s a lot of legislation implemented in a short timeframe, so many developers like us are still learning about full requirements. I agree that compliance is going to be very difficult, and those of us with a small team are a bit overwhelmed with trying to sort out what we need to do πŸ™‚ In short, our biggest focus right now for Jilt and all of our plugins at SkyVerge is ensuring that merchants have the tools to get explicit consent for using customer data (if required — things like transactional messages are omitted), have a way to show how data is used, and have a way to delete customer data from our service upon request (which is something many platforms are working on for their merchants now).

Reply

Absolutely! Obviously very little thought was put into how difficult, time-consuming, and costly the changes would be to the small business owner and the software and services that they rely on when they were finalising the legislation. It’s good to know that Jilt and SkyVerge are working towards this though as I think a lot of companies have almost buried their head in the sand at the prospect of having to deal with compliancy within their offerings, whether this be a website, a WordPress plugin, a SaaS, etc. Solutions such as Jilt that aid in lowering cart abandonment must be amongst some of the most heavily affected with the GDPR, as the smoothness of the othering will undoubtedly have to change and become more intrusive, something that should be the opposite of what cart recovery / abandonment solutions should be. The best of luck to you!

Reply

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