Reduce your Cart Abandonment Rate in 10 Steps

First, let’s define the two types of abandoned carts:

Two Types of Abandoned Carts

Identifiable

This is where a customer has added checkout details including contact info. Cart abandonment emails can remind and incentivise customers.

Anonymous

This is where a customer has added items to the cart before checking out. Typical cart abandonment reminders cannot be sent since an online store would not have the customer’s contact details.

With the above two definitions, let’s run through how you can deploy a step-by-step strategy to reduce your Cart Abandonment rates.

The Steps

1. Choose an Optimised Checkout Provider

This first step has more relevance if you’re in the process of choosing a checkout provider or an e-commerce platform.

E-commerce platforms typically invest a lot in optimising the technology that powers the checkout process.

Shopify’s study with a Big Three management consulting firm shows that Shopify’s checkout is the highest converting.

This is where the highest-performing checkout in the study demonstrated 15% higher conversions on average.

Incorporating a well optimised, out-of-the-box, checkout technology solution means you can focus on other aspects for reducing abandoned carts, knowing that a big of part of the technology is taken care of.

2. Calculate Cart Abandonment Rate

Abandoned Cart Rate = (number of visitors who added item to cart - number of successful sales) / number of visitors who added item to the cart.

Typically 70%-75% of online shopping carts end in an abandoned state.

Check out the following article for more information on calculating your Cart Abandonment Rate on Shopify.

3. Calculate what a Change Would Offer

Because online Cart Abandonment rates are typically high, an optimised cart and checkout process has the potential to significantly reduce the rate.

Reduction of a Cart Abandonment rate from 75% to 65% has significant impact on overall conversion.

This offers increase in revenue without the need to invest in acquisition.

As an example if the following is the conversion funnel for a Shopify store:

All (1000 sessions) -> Product page (750 sessions) -> Add to cart (40 sessions) -> Checkout (20 sessions) -> Transaction (10 sessions),

and these are the conversion rates for each step of this funnel:

All sessions -> Product page: 75%

Product page sessions -> Add to cart: ~5.3%

Add to cart -> Checkout: 50%

Checkout -> Transaction: 50%

With this funnel, the Cart Abandonment rate = (40 - 10) / 40 = 75%.

By implementing strategies to reduce the Cart Abandonment rate to 65%, this would mean that there would now be approximately 14 sessions with transactions instead of 10, i.e. an overall conversion rate of 1.4% (up from 1%).

This change from optimising Cart Abandonment would mean a 40% increase in revenue (given the same Average Order Value and other related factors).

Reducing Cart Abandonment rates offers a significant impact on revenues.

4. Convert Identifiable Carts

The standard approach to converting identified open carts is to trigger reminder emails for abandoned carts.

Typically an email service provider can receive updates on the status of a checkout and trigger reminder emails accordingly.

There are various strategies for what to include as part of the content of cart abandonment emails; typically a combination of reminders and incentives.

More recently, marketers have been deploying SMS and other messaging channels in addition to email, as part of an omnichannel approach (as detailed in number 5).

5. Convert Anonymous Carts

Anonymous carts are trickier to convert, since at that point, the customer has not provided checkout contact details.

Anonymous carts account for a significant number of abandoned carts, so it’s worth adding automations in place to help convert them.

On-site messaging provides a way to identify a customer who has items in their cart. Asking a customer to opt-in is typically done with a value-exchange, e.g. asking a customer to opt-in to receive a coupon code.

They also serve the purpose to incentivising customers to complete their purchase during the session, before leaving the site. This also can be done through a coupon code or a value-add like free-shipping.

Gather’s on-site messaging can read Shopify cart items and can incentivise customers to complete their purchase and convert an abandoned cart.

6. Consider an Omnichannel Approach

Email is a great channel for converting abandoned carts and it is relatively cheap compared to many alternative channels.

Whilst SMS marketing is usually more expensive than email, SMS offers much higher open rates (98% according to Digital Marketing Magazine in a 2014 article).

Cheaper options with similar performance benchmarks include direct messaging channels like WhatsApp and Messenger.

Each channel can offer a different type of interaction with a customer.

7. Deploy a Channel Based Strategy

Cart Abandonment rates can vary between acquisition channels.

For example, Cart Abandonment rates from Facebook-sourced customers are different to Google-acquired customers. Also, first-time customers can have a different rate to returning customers.

Consider personalising cart recovery messaging based on acquisition channels or consider rebalancing the resources allocated to each channel to improve abandonment rates (i.e. investing more in channels with lower cart abandonment rates, if they offer a good ROI in general).

Investing in reward programs typically offers better conversions overall. For example with customer referral programs, referred customers have been shown to demonstrate more loyalty and generate higher profits.

Referral programs offer a low CPA way to acquire new customers.

8. Deploy a Predictive Abandonment Strategy

Whilst the standard approach to converting abandoned carts has been to recover them with reminder messaging and incentives, recently marketers have been exploring ways to assess the likelihood a customer would abandon cart.

This is using AI and real-time data. The new Google Analytics offering (GA4) includes a number of Predictive Analytics implementations. Marketers may be able to leverage GA4 to create audiences that are historically likely to abandon carts and personalise messages to similar audiences.

To find out more about the potential of Predictive Abandonment, please feel free to contact us.

9. Deploy an Experimental CRO Process

There is a number of 'low hanging fruit' efforts you can deploy to reduce Cart Abandonment rates (as detailed above).

With these in place, consider extending your strategy with an experimental approach to reducing abandonment using a Conversion Rate Optimisation (CRO) process, e.g. split testing variants in messaging using optimisation tools.

For a primer on the experimental CRO approach, refer to: 10 Quick Win Conversion Rate Optimization Strategies for your Shopify Store.

10. Double Down on Promising Strategies

By implementing a number of strategies to reduce Cart Abandonment rates, you can reiterate through the process, identifying the efforts that have demonstrated high ROI and doubling down on them.

This is while reducing efforts on strategies that have not demonstrated an attractive cost-benefit.

Conclusion

There are a number of simple ways to reduce Cart Abandonment rates, for both identifiable and anonymous carts.

More recently, marketers have been implementing Predictive Abandonment models as part of the mix.

This infographic summarises the above 10-step strategy:

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