Cart Abandonment Rate

Step 1: Understand Key Metrics

• Visitors Adding to Cart (Avg. per Month): The average number of visitors who add items to their shopping cart each month.
• Completed Orders/Purchases (Avg. per Month): The average number of completed orders or successful purchases each month.
• Average Order Value (In USD): The average dollar amount of a completed purchase.

Based on the example provided:

• Visitors Adding to Cart (Avg. per Month): 50
• Completed Orders/Purchases (Avg. per Month): 30
• Average Order Value (In USD): $100

Step 2: Calculate Cart Abandonment Rate

The formula to calculate the cart abandonment rate is:

Cart Abandonment Rate = [(Visitors Adding to Cart – Completed Orders) / Visitors Adding to Cart] * 100
Plugging in the numbers:

Cart Abandonment Rate = [(50 – 30) / 50] * 100 = 40%

Step 3: Calculate Annual Revenue Lost to Cart Abandonment

To estimate the annual revenue lost due to cart abandonment, you need to understand how much revenue is potentially being missed each month and then multiply that by 12 for the annual figure. The formula is:

Annual Revenue Lost = (Visitors Adding to Cart – Completed Orders) * Average Order Value * 12
Using our example:

Annual Revenue Lost = (50 – 30) * $100 * 12 = $24,000

A 40% cart abandonment rate means 40 out of every 100 visitors adding items to the cart do not complete their purchase. An estimated $24,000 in annual revenue is lost due to potential customers abandoning their carts.

What is Cart Abandonment Rate?

Cart abandonment rate refers to the percentage of online shopping carts that are not carried through to purchase. It’s a critical metric for e-commerce businesses, indicating the number of potential customers who begin the checkout process but do not complete it. This rate is calculated by dividing the total number of completed purchases by the total number of shopping carts created, subtracting this result from one, and then multiplying by 100 to get the percentage.

How is Cart Abandonment Rate Calculated?

The formula for calculating cart abandonment rate involves several steps:

1. Divide the total number of completed transactions by the total number of shopping carts created.
2. Subtract this result from one.
3. Multiply by 100 to convert the figure into a percentage.

What Qualifies as an Abandoned Cart?

An abandoned cart occurs when a potential customer initiates the checkout process for an online order but exits before completing the purchase. This can happen at any stage of the checkout process, from adding items to the cart to entering payment information.

What is Considered a Good Cart Abandonment Rate?

While nearly 70% of online shopping carts are abandoned on average, a good cart abandonment recovery rate ranges between 5% to 10%. The average recovery rate sits between 3% and 5%, but leading e-commerce sites manage to recover between 10% and 14% of abandoned carts.

Why Do Shoppers Abandon Carts?

Several key factors contribute to high cart abandonment rates, including:

• Unexpected costs such as taxes and shipping fees.
• A complicated or lengthy checkout process.
• Mandatory account creation for making a purchase.
• Lack of trust in the website or payment security concerns.
• Limited payment options.
• Ambiguous return policies or out-of-stock items.