Understanding your shopping cart abandonment rate is one of the best ways to know your number of unconverted potential customers. By definition, the shopping cart abandonment rate is the percentage of shopping carts that are abandoned prior to the completion of the purchase (thanks, Wikipedia!). More specifically, we like to look at it as a way for marketers to analyze consumer behavior and the effectiveness of the checkout process. While the metric seems simple on the surface, it gives valuable insights into areas of future growth and improvement. We'll take you through how to calculate this metric, how to understand it in the context of your industry, and how to apply it to the platforms you're using now.
You can calculate the shopping cart abandonment rate by dividing the total number of completed purchases over the total number of carts initiated. Shopping cart abandonment rate can be assessed for various time-periods (i.e. day, week, month, year) and, if your carts initiated are tied to certain products or campaigns, you can assign a specific shopping cart abandonment rate for each.
If you’re confused about how to define completed purchase and cart initiated, we’ve included some nifty definitions and examples below:
When choosing what to include in your calculations, remember: consistency is key! That means, if you decide to include XYZ in your shopping cart abandonment rate for the month, you should include it in the next month’s shopping cart abandonment rate as well. Having consistent metrics will allow you to better identify the causes of good or bad performance. For instance, if you changed the checkout process on your online shop (i.e. added an extra step) and the abandonment rate becomes higher than last month, it means that you need to improve or re-adjust the process.
Again, as you begin (consistently) monitoring the shopping cart abandonment rate, you’ll be able to find insights specific to your strategy. Of course, it’s also important to understand your shopping cart abandonment rate in relation to your broader industry. To help you know what to expect, we’ve included a list of average shopping cart abandonment rate per industry:
Computing the shopping cart abandonment rate is easy once you have all components of the metric. However, Shopify is one of the platforms that easily gives you the shopping cart abandonment rate of your business without hassle. Rather than having to manually compute the number of completed purchases from the total number of carts made, Shopify provides a feature that automatically computes the number of abandoned carts for its users. Click here for more information on how to access this data.
While shopping cart abandonment rate is easy to calculate, it’s important to keep in mind that shopping cart abandonment rate is one of many valuable metrics to track your performance. If you don’t want to spend hours at the end of the month juggling numbers from your website and Shopify accounts, consider trying Lido. Lido can help you build a dashboard to monitor your data and give a look into how your key metrics (such as shopping cart abandonment rate) change over time.
Sign up for free and get started today.
