Last editedJan 20232 min read
Do you know your customer checkout abandonment rate? Shopping cart abandonment can trickle down to lost sales and revenue, so it’s important to keep an eye on this important metric. We’ll cover the checkout abandonment rate definition in this guide, along with how to calculate it most accurately.
What is checkout abandonment?
Checkout abandonment describes when a shopper adds a product to their virtual cart and then leaves the website at the checkout stage without making a purchase. The customer starts their user journey with interest in the purchase, but something goes wrong before completion. There’s a wide variety of reasons for cart abandonment. Here are a few of the most common:
The customer is faced with higher shipping costs than expected
The customer doesn’t see their preferred payment method listed
The checkout page is long and complicated
Your website requires the customer to create an account to complete the transaction
The website is slow to load each page and the customer loses patience
While these are common causes for a high checkout abandonment rate, it’s important to fully investigate your own reasons for abandonment.
Checkout abandonment rate definition
A business’s checkout abandonment rate expresses the number of customers abandoning their carts as a percentage.
To calculate this metric, you can use the following formula:
1 – (Total Completed Transactions / Total Shopping Carts Created) x 100
For example, imagine that customers put products into 300 virtual shopping carts. However, only 40 of these customers go on to complete the transaction.
1 – (40 / 300) x 100 = 87%
This means that 87% of your customers failed to complete the transaction, abandoning their shopping carts before making a purchase.
What is the average checkout abandonment rate?
The example given above might seem high, but this falls somewhat in line with the average checkout abandonment rates. According to research from the Baymard Institute, the average shopping cart abandonment rate is 69.99%. This is far from ideal, of course. A “good” checkout abandonment rate is anything less than 40%, though this varies widely by industry.
Ecommerce studies show that the finance, travel, and non-profit industries all have average abandonment rates over 80%, while the retail sector’s average is 72.8%. It’s helpful to use related benchmark figures when comparing your own averages to determine where your business stands next to competitors.
How to reduce checkout abandonment rate
If your abandonment rates are uncomfortably high, this indicates that something’s gone wrong with your checkout process. This might be due to a lagging website, security issue or required log-in for customers. Here are a few tips to optimize the process and reduce your abandoned checkout rate.
Enable guest checkout: Don’t force new customers to create an account to complete their purchase. This is a big deterrent for those short on time. You only need their email address to follow up on the purchase.
Employ the latest security features: Make sure your checkout page is trustworthy with all certificates and seals of approval clearly displayed. Use tools like end-to-end encryption and tokenization to build trust.
Keep checkout fields to a minimum: In addition to the customer email address, you’ll need their shipping address and payment details. Try to keep this to a single page for fast, easy checkout.
Offer free shipping: If you can afford to do so, eliminating shipping costs is one of the best ways to encourage customers to complete their purchase. You should also offer next-day delivery for buyers in a hurry.
Finally, don’t forget to offer a variety of secure payment methods. If customers click through to the checkout page and see that you only accept PayPal, this turns off those who don’t want to use this method. GoCardless can help increase conversions at checkout by enabling both one-off and recurring payments. We offer an out-of-the-box payment page with fully customizable checkout flow that you can embed directly onto your website.
We can help
GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.
