Shopping cart abandonment — when shoppers put items in their online shopping carts, but then leave before completing the purchase — is the bane of the online retail industry.
But it’s also a huge opportunity: Approximately $US4 trillion worth of merchandise will be abandoned in online shopping carts this year, and about 63% of that is potentially recoverable by savvy online retailers, according to BI Intelligence estimates.
In a new report, BI Intelligence explains what leads a shopper to abandon an online purchase and how retailers can begin to combat rising shopping cart abandonment rates. We collected and analysed data from top e-commerce companies, and spoke with industry experts whose job it is to reduce abandonment rates and boost conversions, to come up with a number of solutions that can help retailers recover lost sales.
Here are some key points from the report:
- Approximately $US4 trillion worth of merchandise will be abandoned in online shopping carts this year, and about 63% of that is potentially recoverable by savvy online retailers, according to BI Intelligence estimates.
- Shopping cart abandonment is increasing, and it will continue to do so as more consumers shift to online and mobile shopping. In 2013, as many as 74% of online shopping carts were abandoned by shoppers, according to data shared with BI Intelligence by e-commerce data company, Barilliance. That abandonment rate is up from 72% in 2012, and 69% in 2011.
- An abandoned shopping cart does not automatically translate to a “lost sale,” because three-fourths of shoppers who have abandoned shopping carts say they plan to return to the retailer’s website or store to make a purchase, according to data from SeeWhy. Online-only retailers are at a disadvantage to “omnichannel” retailers in this respect because they have fewer channels through which to recover lost sales.
- Retailers can reduce the rate of abandonment and increase conversions by streamlining the checkout process and also by retargeting shoppers with emails after they have left a website. Initial emails, sent three hours after a consumer abandons a cart, average a 40% open rate and a 20% click-through rate, according to Listrak.
- More broadly, an abandoned shopping cart should be seen as part of the increasingly complex series of steps a consumer might take before finally making a purchase and a strong indicator of consumer interest in a product or a brand. Technology that helps retailers collect and leverage online shopping cart data is likely to be a worthwhile investment.
In full, the report:
- Explains the complex relationship between consumers and retailers and outlines reasons why shoppers abandon a purchase.
- Includes interviews with executives from top retailers and marketing agencies who talk about what they are doing to reduce shopping cart abandonment.
- Proposes a list of solutions that are proven to reduce shopping cart abandonment for online retailers.
- Forecasts where this trend is going and how shopping cart abandonment will affect retailers — bricks-and-mortars and e-commerce companies alike — in the future.
Disclosure: Jeff Bezos is an investor in Business Insider through his personal investment company Bezos Expeditions.