The True Cost of an Abandoned Shopping Cart...And Why You Can't Afford It

An abandoned shopping cart is when a potential customer starts the checkout process but then drops out of the process before the order is completed. As a business owner/operator, awareness of the cart abandonment rate for your company is both insightful and critical. In 2020, the worldwide cart abandonment rate was 88.05%, meaning that ~88% of online shopping carts that had items in them never checked out. Obviously, it is impossible to have a cart abandonment rate that is 0%, but 88% is unacceptable--you simply can’t afford it.  

88% becomes even more startling when coupled with the average eCommerce order value made on a mobile device which is about $90.82 in the United States. And it doesn’t stop there.  

Say that a customer adds a shampoo/conditioner bundle that costs $84 to their cart. If they like the product, they would be purchasing the bundle roughly four times per year, or whenever they need to re-stock. Over a lifetime, this $84 quarterly purchase would compound into thousands of dollars. If they are a brand-loyal customer, they could also begin to purchase other products from you or your line.  

However, the customer gets to the checkout page and sees that shipping tacks on $9 to the order total. Now they are thinking twice and begin to shop around on other sites. Not only did you lose out on that initial $84 purchase, but you may have also missed out on the entire lifetime value of that customer because now they know that your site has unattractive shipping rates. 

So what do they do? They never visit your site again and they get a similar product from Amazon where they know they will find free and fast shipping. You have just lost out on thousands of dollars over the lifetime of just ONE customer. Now multiply that by thousands of site visitors, and over the lifetime of those customers, your brand has lost out on millions in revenue.  

According to Statista, “for digital shoppers in the United States, the primary reason for abandoning an online shopping order is too high shipping costs, followed by discount codes that do not work.”

If your internal response to that ^ was to just to create a discount code for free shipping that always works, think again. The impulse to lower costs for the customer, or eat away at your margin by absorbing these costs is easy, and flawed thinking. As a business, you need more options and you also need the tools to think and act strategically, especially in a rapidly evolving eCommerce landscape.  

So what CAN you do? Here are some key things you can do to lower the abandoned shopping cart rate for your business: 

1. Be clear about your shipping rates upfront. Some online stores allow shoppers to input their zip code and then an estimated shipping cost is displayed with the item price. Transparency for customers is key, and by doing this, there are no surprises at checkout. A shopper who is prepared is less likely to back out at the last second.  

2. Offer free shipping, but roll the shipping cost into the price of the item. This tip is no surprise, and can work. However, when doing this it is important to be aware of what your competitors are doing. You want to find the sweet spot of remaining competitive on price while maintaining a healthy margin. 

3. Get better shipping rates. And before you even think it, we know--you think you already have the best rates. Chances are that you do indeed have pretty good rates, but it is a long shot to say that you have the absolute best rates available to you and your customers. So how exactly do you secure the best rates? This is where a shipping consultant becomes critical. The best shipping consultants have actually worked at the major carriers themselves, so they know their way around a shipping contract. They have the network and the know-how to analyze your current shipping profile, goals, and customer base, and then strategically implement a new shipping plan for you. Depending on the size of your business, the carriers you use, and how many packages you ship, this process can take some time. However, a contract revamp is something that needs to be done right the first time. Taking the time to follow through with this process often saves shippers tens of thousands of dollars.  

Action items moving forward:

1. Find out your website’s abandoned shopping cart rate, and don’t freak out.  

1. Think about and solidify your goals for customer experience, shipping rate offering, and delivery experience for your products.  

1. Get in touch with a credible supply chain consult. A good consultant can help you empirically plan your subsidized shipping strategy and align a delivery solution consistent with the desired buying experience. Now’s the time to act if you’d like to be prepared for the 2021 holiday season. Visit idrivelogistics.com or the iDrive Linkedin; or email sales@idrivelogistics.com for more information and help to get started.