ABANDONMENT RATE IN BUSINESS
Abandonment rate
In marketing, abandonment rate is a term associated with the use of virtual shopping carts.
Also known as "shopping cart abandonment". Although shoppers in brick and mortar stores
rarely abandon their carts, abandonment of virtual shopping carts is quite common. Marketers
can count how many of the shopping carts used in a specified period result in completed sales
versus how many are abandoned. The abandonment rate is the ratio of the number of
abandoned shopping carts to the number of initiated transactions or to the number of
completed transactions.
Around 10 sources of information are used before making a decision when buying online
(e.g. webshops, review websites, social networks, and the like). In this process the shopper
compares at least 5 different websites for the product, and spends up to 20 hours researching.
This means that shopping online is not as easy as some predicted 20 years ago.
From both business and scientific perspectives, researchers and practitioners have
investigated the problem of online shopping abandonment, trying to understand and address
the causes of such low conversion rates. They mostly agree that the biggest problems, for
online cart abandonment were: lack of transparency, unclear transaction and delivery costs,
lack of trust in the online seller, and poor website functioning or complicated processes.
Causes
There are various reasons behind a high cart abandonment rate. To understand them, one
must examine the cart page, undertake qualitative research, and build a theory as to why this
is occurring. In general, these reasons can be categorized as different risks that affect the
user's decision to ultimately complete the purchase, such as:
Complicated checkout process.
Hidden prices that come out at the time of checkout like taxes or high shipping charge.
Tough or lengthy registration process. No option to check out without signing up.
Limited payment options.
Decision to purchase from a land-based store (as opposed to online).
Entertainment value (e.g. placing items for fun or because of boredom).
Utilization as a research and organization tool.
Desire to wait for a lower/sale price.
Privacy/security concerns.
Non-delivery fear (e.g. product is lost in delivery).
Difference in product description versus actual product.
Poor cart page design.
High shipping cost.
Long delivery times.
Abandonment rate
In marketing, abandonment rate is a term associated with the use of virtual shopping carts.
Also known as "shopping cart abandonment". Although shoppers in brick and mortar stores
rarely abandon their carts, abandonment of virtual shopping carts is quite common. Marketers
can count how many of the shopping carts used in a specified period result in completed sales
versus how many are abandoned. The abandonment rate is the ratio of the number of
abandoned shopping carts to the number of initiated transactions or to the number of
completed transactions.
Around 10 sources of information are used before making a decision when buying online
(e.g. webshops, review websites, social networks, and the like). In this process the shopper
compares at least 5 different websites for the product, and spends up to 20 hours researching.
This means that shopping online is not as easy as some predicted 20 years ago.
From both business and scientific perspectives, researchers and practitioners have
investigated the problem of online shopping abandonment, trying to understand and address
the causes of such low conversion rates. They mostly agree that the biggest problems, for
online cart abandonment were: lack of transparency, unclear transaction and delivery costs,
lack of trust in the online seller, and poor website functioning or complicated processes.
Causes
There are various reasons behind a high cart abandonment rate. To understand them, one
must examine the cart page, undertake qualitative research, and build a theory as to why this
is occurring. In general, these reasons can be categorized as different risks that affect the
user's decision to ultimately complete the purchase, such as:
Complicated checkout process.
Hidden prices that come out at the time of checkout like taxes or high shipping charge.
Tough or lengthy registration process. No option to check out without signing up.
Limited payment options.
Decision to purchase from a land-based store (as opposed to online).
Entertainment value (e.g. placing items for fun or because of boredom).
Utilization as a research and organization tool.
Desire to wait for a lower/sale price.
Privacy/security concerns.
Non-delivery fear (e.g. product is lost in delivery).
Difference in product description versus actual product.
Poor cart page design.
High shipping cost.
Long delivery times.
