It is frustrating to see customers move through your sales funnel, and suddenly lose them at the point of purchase. However, if you keep blaming the buyers for a bad mood at checkout, you will never improve the abandonment rate. Instead, be positive and think that there is still room for improvement, so we will increase revenue once it gets fixed. Ready to find out? Below, we will take a deeper look at:
- What is the checkout abandonment rate?
- Why customers leave their carts?
- Hacks to reduce the checkout abandonment rate.
What is The Checkout Abandonment Rate?
Before we go through best practices, let’s see what the checkout abandonment rate means to know whether you understand it correctly.
Checkout abandonment is when a shopper adds an item to the cart, starts down the checkout process, but then abandons purchase before submitting their order and payment.
Merchants and even marketers usually use cart abandonment and checkout abandonment interchangeably. However, they are different phases in a customer journey. (Source: Bolt)
As people often confuse the sorts of abandonment, the table below shows you the comparison between the most important ones.
|Browse Abandonment||Cart Abandonment||Checkout Abandonment|
|Definition||When a shopper views a product but never adds it to their cart.||One step further than browse abandonment. It is when a customer adds an item to their cart but does not go any further.||When a shopper adds an item to the cart, starts down the checkout path, but does not submit their payment/order.|
|Industry Benchmark||89.09%||68.81%||25% - 40%|
So the question is, what is an acceptable checkout abandonment rate? As mentioned above, the average checkout abandonment rate in e-Commerce is 25%, meaning if you have a rate of 20% or lower, you are still doing well. Yet, each industry is unique, so there is no one-fits-all number. Instead, consider the rate in your industry and make appropriate adjustments to achieve the greatest impact.
The average checkout abandonment rate by industry (Source: OptinMonster)
Looking at the statistics, clothes, tech, and home products are more likely to be abandoned. So now you can see how you have performed in your product area. Regardless of what your current rate is, always try to reduce it - that will boost conversions.
Primary Reasons Why Digital Shoppers Abandon Purchases?
Although the root causes for abandonments during checkout differ between online stores, Baymard has illustrated the primary reasons why customers do not submit their orders. Interestingly, it is not too challenging for e-merchants to solve most of these issues.
The main reason why online customers leave without order submission. (Source: Baymard Institute)
As you can see, additional charges like shipping costs, tax, and other fees are the biggest obstacles in converting a potential customer into a paying one at the final stage. In fact, they would like to know the total price they have to pay before making a purchase. Hence, adding fees at this stage gets them upset, and they will quit in frustration.
Apart from that, a large portion of abandonments is simply a natural consequence of how customers browse checkout flows, in other words, checkout usability. To be more specific, this refers to account creation, payment methods, credit card forms, order review, and so on.
Last but not least, security and privacy are emerging issues. eCommerce sites are the obvious target of cybercriminals. If you fail to protect customers from potential threats, it will result in the loss of trust, profits, and reputation. Plus, legislation like GDPR requires store owners to explain why you need customers’ personal information, and how you use them.
Besides the primary reasons, store owners can use session recording tools, Hotjar, for instance, to find out the pain points during the checkout process. So after you understand why customers are leaving, it's time to address them with realistic solutions.
Hacks to Reduce Checkout Abandonment Rate and Boost Conversions
It might be a bit overwhelming for you to develop approaches to these problems. Thus, we have come up with some tactics that help you minimize the abandonment rate and even deal with abandoners to recover sales.
Improve Your Shipping Strategy
Have you ever thought about offering free shipping to reduce the barrier of entry for customers? A recent survey has shown that free delivery is the #1 reason people shop online. According to Invesp, 57% of shoppers delay making payment at checkout to only estimate the shipping costs, and 30% leave their orders to wait for free shipping. Therefore, having no shipping cost gives you a competitive edge over other retailers who charge high prices or have an expensive membership program that requires monthly fees.
NuFACE, an anti-aging skincare company, found the reason that made their customers shy about purchasing - free shipping. Thanks to adding a free delivery threshold, the brand saw a significant increase in orders by 90%. (Source: Red Door)
In terms of online shipping, 21% of US buyers would not forgive brands for late shipping while 67% of consumers expect same-day, next-day, or two-day delivery. The demands are growing, and this also one of the changes of the eCommerce retail post-pandemic. Thus, to meet customers' expectations, you can consider offering curbside pickup for faster shipping and low cost.
To turn fulfillment into a competitive advantage without sacrificing profits, please check out this article.
Fix Checkout Usability Issues
Another aspect that e-merchants should care about is checkout UX. Did you know that the average large-sized e-commerce site can gain a 35.26% increase in conversion rate through better checkout design? Now, let’s see what are the best practices for checkout usability.
Stop Forcing Shoppers to Create Accounts
Some sites completely ruin their opportunity at increasing conversions by requiring buyers to create a membership account, otherwise, they cannot process their orders. According to eConsultancy, 1 in 4 customers abandons an online purchase due to forced registration. Instead, store owners should accept guest checkout without the hassle of user account creation. Did you know that conversion rates can increase by 45% if you offer a guest checkout?
As many Apple customers already have an Apple ID, it makes sense for Apple to give the “Checkout with your Apple ID” option the more prominent, left-most position over the Guest Checkout. (Source: Apple)
Employ Various Payment Methods
Having as many payment options as possible is the best way to combat the abandonment issue. However, since payment methods are costly to provide, you should focus on providing the most popular ones. This will solve the problem for most people, while only losing out on some conversions.
Most popular payment methods of online shoppers worldwide by regions (Source: Statista)
According to Statista, 82% of online shoppers in the Americas cited debit or credit cards as their preferred payment method when making online purchases. On the contrary, 80% of European respondents claimed payment providers including PayPal or Alipay as their favorite online payment means.
According to Klarna, Buy Now Pay Later increases conversions by 44% and helps build a more long-lasting relationship with the customer. (Source: Farmacy Beauty)
Simplify The Checkout Process
Did you know that 1 out of every 5 consumers will abandon their orders and leave your store because of a complicated/too-long checkout process?
If you want to build a checkout flow that converts, try to optimize it. What you need to do here is to streamline the checkout and payment process, and remove any unneeded steps or clicks. A study revealed that the average checkout flow is 5.1 steps in length. Interestingly, there is a correlation between the number of form elements shown by default and the overall checkout user experience.
The benchmark reveals that the average checkout flow comprises 23.48 form elements and 14.88 form fields (when purchasing as a new non-account customer). (Source: Baymard Institute)
Hence, you should make the flow as simple as possible for the consumers to get from seeing the product they want to ordering it.
An entire Crutchfield’s checkout flow can be as short as 6-8 form fields. This is only 54% of the number of fields in an average checkout, which has 14.88 fields. (Source: Baymard Institute)
Consider removing additional steps here and provide them with the information earlier in the process, during user onboarding, or earlier in a conversion funnel. Here are some handy tips that help you optimize your checkout process:
- Try the KISS approach (Keep it simple and stupid). Ideally, the checkout page should only consist of delivery details, payment details, and confirmation.
- Create a smooth shopping experience by allowing customers to remove or add products from the cart easily. You can consider using Ajax to update the checkout page without refreshing it.
- Reduce the number of form fields. For example, you can use a single ‘Full Name’ field instead of splitting it into ‘First Name’ and ‘Last Name’. Also, set the “Billing Address = Shipping Address” by default so you can avoid a high number of fields shown on the page.
Give Buyers A Clear Order Summary
After customers initiate the cart or checkout process, you must show them a full picture of the total items, price, discounts, after-tax pricing, shipping information, and any other extra costs. Hence, they will have one last chance to make sure that they ordered and entered everything correctly.
Microsoft allows buyers to check all details about selected items, shipping costs, tax fees, payment methods before placing an order. (Source: Baymard Institute)
Besides, don't forget to clearly state your contact, return policies, or warranty options here as merchants tend not to include them in the checkout phase. Pushing shoppers towards purchases is a good strategy, they may decide not to proceed due to the lack of complete information.
Avoid Data and Payment Security Concerns
Obviously, you are unlikely to purchase from an eCommerce process you do not think is secure enough, right?
Customers are wary of inputting personal information online, particularly financial and address details. Unfortunately, cybercriminals can apply various techniques to access your database to take consumers’ valuable information or cause website crashes. Hence, providing airtight security is a must as customers will have trust in your service as a whole. You should:
- Provide a secure checkout process from beginning to end for buyers to follow through on a purchase. For instance, you can run a security audit for your website to know whether your online shop is PCI-DSS compliant, you are encrypting communication between your customers and you, and customer accounts are safe or not. Moreover, remember to gather only information that is necessary to process the order. A company name should not be included, right?
- Display any security badges associated with the payment checkout you are operating such as credit card and technical security badges.
- Keep all software and plugins updated because hackers will find their way in if they detect vulnerabilities in those apps.
- Train your staff so that they are fully aware of how important it is to protect customers’ information and never leak them for any purpose.
Recover Incomplete Payments
It is not the end of the world to see shoppers drop off without making a payment as you still have chances to bring them back and close the sale. The most common and successful strategy is to send emails to individuals who abandoned their cart during the checkout process. According to Barilliance, the average conversion rate of abandonment emails is 18.54%. So let’s see what can you do to maximize profits with this email campaign. Basically, there are 3 types of emails you can use:
- Reminder - Follow up with these customers with a soft, and gentle email. You should politely remind them to pick up their cart and return to where they left off. If you are afraid of being too pushy, you can ask them for feedback about why they abandoned their purchase. A kind reminder will work best within 4 hours since the abandonment.
- Discount offer - After 2 days with no action from abandoners, you should incentivize consumers to encourage them to complete payment. Offering a promo or an exclusive discount is a great tactic.
- Final Reminder - In case that purchase is still incomplete, it is time for you to send out a final reminder. This should be within 1 week of the checkout drop.
Sephora calls out with 3 reasons to shop, star rating, link to reviews, and product image. Customers trust others' opinions and are always looking for that nudge to push them over the edge. (Source: Sephora)
To win them back, invest time into writing an interesting subject line to increase the open rate. Plus, consider adding a list of added items, a sense of urgency, and a clear call to action that links them back to the checkout process. Meanwhile, make sure that all links you insert into emails are trackable by using UTM codes, for example.
Don’t give up if these above-mentioned do not convert those people into paying ones at the moment. Instead, think about how you could take advantage of the insights and use them to prepare re-marketing campaigns in the near future. Some shoppers need multiple touch points before they are ready to make a purchase. Considering their insights to retarget them with relevant ads is a great idea as the goal is to remind them of selected products and keep them top of mind.
Checkout abandonment is a real issue in the eCommerce game that e-merchants like you need to care about if you want to increase sales. If your current is lower than the average for your industry, you are doing great! If not, look at the reasons behind it and take action right now to boost conversion rates. Keep in mind that this is an ongoing challenge so you cannot expect to get it right within a few days. Try to test things out, evaluate, and let us know which of our strategies work best for your online store.