Checkout Abandonment: Are you Tracking the Right Metric?
It takes a lot of resources to make an eCommerce business successful. Potential customers suddenly abandoning during the checkout process is not only disappointing, but costly in both time and money.
Following several studies, Baymard Institute found that the average cart abandonment rate is 69.57% regardless of industry.
Cart abandonment may be a more familiar term, although it’s critical to understand the difference and track both cart and checkout abandonment metrics.
Let’s look at the difference
Cart and checkout abandonment both involve customers leaving the shopping process after adding products to their cart.
There is a clear and important distinction between them, the stage at which they are in the ecommerce conversion funnel. Identifying when they drop off is a key factor. An abandoned checkout occurs when a shopper initiates the checkout process but does not complete it, as opposed to cart abandonment when items are added to the cart whilst browsing the site.
Understanding and appreciating this distinction impacts the strategies and actions needed to tackle any issues.
How To Calculate Checkout Abandonment Rate
To calculate your website checkout abandonment rate, divide your total number of completed transactions by your checkout initiations within a set timeframe. Then subtract that result from one and multiply the answer by 100.
Last month 2000 initiations and 750 successful transactions would be a checkout abandonment rate of 62.5%
(1-(750/2000)) x 100
Simplify the Checkout Process
There are a variety of ways to reduce checkout abandonment from abandonment trigger emails to discounts and offers, yet simplifying the checkout process is crucial in converting sales and providing great UX.
Reducing keystrokes is a priority, websites that predict address data based on the minimum possible keystrokes are less likely to be plagued by high abandonment rates. With address validation, you ensure that the information captured is accurate, reducing errors, mistypes, and costs associated with incorrect customer information.
Based on usability issues alone the Baymard Institute found that an average ecommerce website can increase conversion by 35.26% with simplified checkout design. Considering ecommerce sales total $378 billion across the US and Europe, that translates to an incredible increase of $260 billion additional sales from better checkout design alone.