How and why you need to measure your abandonment rates
Write me a tragedy in three words…
…Abandoned shopping carts
Is there anything worse than knowing that a customer got all the way to your checkout and then changed their mind and left the website? Abandoned carts are the greatest tragedy for any eCommerce business. And yet our recent insight report found that a massive 42% of retailers aren’t even measuring this metric. Knowing the extent of the issue is the first step to improving on it and winning back those sales!
A third of the surveyed participants that weren’t measuring cart abandonments said it was because they don’t know how. This blog is for you!
At Fetchify we talk a lot about helping businesses to improve checkout conversion rates (reducing abandonment rates) but today we’re going to take a step back and look at measuring those rates so you have your starting point to improve from.
What are conversion rates and abandonment rates?
So the first thing to understand about these metrics is that they are two sides of the same coin – conversions are the customers that started the checkout process and completed the transaction, abandonments are the people that started the checkout process but then left without making a purchase.
We don’t just want to celebrate conversions, we want to tackle the abandonment rate – the money that is walking away from your checkout. Everything about your online shop is carefully designed to entice the visitor, to persuade them to buy your products. How many potential customers are being won over by your website and your products, adding items to their basket, but then being put off by something in the checkout journey and leaving?
How do you measure your abandonment rate?
Depending on your eCommerce platform, your metrics and reports will take different forms, but have a look at your specific reporting and find these two important numbers.
- The number of initiated transactions – that is the number of visitors who place items in their basket
- The number of completed transactions
Then you need this simple equation to work out your abandonment rate
Once you have that figure, you have a black and white incentive in front of you to streamline your checkout UX and win back those customers before they leave. A clear indicator of the ROI to be gained through conversion rate optimisation.
How does your store measure up?
The industry average across eCommerce is an abandonment rate of 68%. That’s 68 out of every 100 customers that start the checkout journey and then leave without finishing the transaction. How does your store measure up?
If your abandonment rate is lower than this average congratulations! But that doesn’t mean there isn’t still room for improvement. Every tweak that makes your checkout more user-friendly, will convince more potential customers to stick with you and cross the finish line of the transaction.
A high abandonment rate can indicate issues with your checkout process that are turning customers away. Perhaps your shipping costs are too high, your payment options don’t meet expectations, or your forms are too long and challenging. But now you know what your starting point is, you will be able to tell if any adjustments you make are improving the experience for your customers. They will tell you with their wallets.
The good news is, we can help
57% of the businesses we surveyed in our Checkout Insight Report claimed a higher than average conversion rate/lower than average abandonment rate. Of the adjustments they had made to improve their checkout, the three ranked most highly by our participants were
- Address Lookup to speed customers through form-filling
- abandoned cart discounts to entice customers back
- alternative payment options such as digital wallets to make payments easier and suit any preference.
If you are already a Fetchify customer, you are already ahead of the curve. Our Address Auto-Complete API, when added to your checkout means your customers can add their shipping and billing addresses with fewer keystrokes. That means less dwell time and less time to reconsider a purchase. Getting customers through your checkout quickly and efficiently is the key to great conversion and our Address Auto-Complete can reduce keystrokes by as much as 80%.
Sound good? You’re just a few simple steps from a better optimised checkout and even better conversion rates.
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We are a pioneer in SaaS address lookup and data validation solutions. We process millions of data transactions each day for thousands of clients ranging from small e-commerce startups to large household brands such as Heinz and RBS. Our flagship products Address Auto Complete and Postcode Lookup reduce friction on checkouts, leading to increases in conversion rate of up to 40%, and helps reduce failed deliveries by as much as 75%. Since launching in 2008, we have differentiated by our ease of integration and exceptional support. We provide a full suite of data validation solutions including Phone Validation, Email Validation, UK Bank Validation, and Data Cleansing.