Differences of Site Abandonment, Checkout Abandonment, and Cart Abandonment for Conversion Rates

Sure, Conversion Rate is Important. But... What is the Difference Between Site, Checkout, and Cart Abandonment?

Conversion Rate is the poster child of eCommerce metrics, the go-to figure for a quick assessment of analytics data. But in this respect, its reputation is a bit ungrounded: at times, Conversion Rates can be meaningless, unactionable, and, dare I say, even misleading.

Benchmarks for Conversion Rates will vary based on the market, location, average order value, device, etc. But just to put it in perspective, here are a couple recent result sets, first from Monetate

Global, US and UK conversion rates per quarter in 2016

… and another from Mobify...

 

Mobify eCommerce Conversion Rate Benchmarks 2016

The article Why Conversion Rate is a Horrible Metric to Focus On, if you overlook the aggressive title, presents a few key reasons why you shouldn’t take the overall Conversion Rate at face value:

  1. A high Conversion Rate doesn't always means more profits.


    This simple example illustrates what we mean:

    • Day 1: 4% Conversion Rate = 200 sales / 5000 visits
    • Day 2: 10% Conversion Rate = 100 sales / 1000 visits

    As you can see, Day 1 is more profitable than Day 2 despite the lower Conversion Rate.
     

  2. Only a minority of visitors come to a website to buy


    Visitors come to your site for a wide variety of reasons: shopping research, blog posts, press releases, brand information, potential careers, checking order status, checking return policies, customer service, instructions, how-tos… the list goes on and on. All told, very few visitors actually enter your site with an intent to buy.

    As Avinash Kaushik puts it, the real questions are, "If you solve for Conversion Rate, are you solving for all your traffic and are you improving the website experience for all your customers?"
     

  3. The overall non-segmented conversion rate does not provide meaningful or actionable intel


    In other words, Conversion Rates vary greatly between customer types, so lumping all your shoppers under one metric doesn't always reveal the best course of action. For instance, we know that out of our 1,000 visitors, 30 bought from us. What do we do now?
     

OK. Where to go from here?

While Conversion Rate is still worth measuring (especially if you use it contextually and take the time to properly segment visitors), there are other KPIs that are easier to understand and more actionable.

Let's touch on 3 checkout-related metrics that we love using with our clients:

  • Site Abandonment Rate
  • Cart Abandonment Rate
  • Checkout Abandonment Rate

Why do we prefer these over conversion rate?

  • They target visitors with the intent to buy.
  • They provide a direct correlation with revenue.
  • They are contained in the microcosm of the 2-3 page checkout process.

As you can see in the screenshot below, from one of our Shopify Plus client's dashboards, our three rates are still closely linked to conversion rate. Personally, I like this interface because it makes calculating these metrics really easy, as you’ll see below.

Let’s go into a little more detail about how each of these rates can boost your business.

Site Abandonment Rate

This is the ratio of people who have completed a purchase against those who have added something to their cart:

Site Abandonment Rate = (1 – Total Orders Placed / Total Add to Cart) * 100


Using the data from our Shopify dashboard above, here's how you would calculate it:

(1 - 2908 / 6734) * 100 = 56.8%

Why is it useful? It encompasses the entire buying process, from initial intent to completed purchase.

Cart Abandonment Rate

The Cart Abandonment Rate measures the people who have engaged in the transaction flow but stopped short of completing the order, divided by the people who have added an item to their cart:

Cart Abandonment Rate = (1 – Total Checkout Started / Total Add to Cart) * 100

Again, if we take the data from our example above, we get:

(1 - 3523 / 6734) * 100 = 47.7%

It might be challenging to reduce this rate simply because of how some shoppers use the Add to Cart button. For instance, shoppers often add items with no intent to buy, but rather a makeshift system of "bookmarking" for comparison shopping or saving a purchase for later.

Try investigating which items are left on these carts and if there's a specific pattern between them. Barriers on the way to the checkout process — such as forcing a shopper to create an account — will also affect these results.

Checkout Abandonment Rate

Our final metric is the ratio of people who’ve completed the checkout process against those who’ve merely started it:

Checkout Abandonment Rate = (1 – Total Orders Placed / Total Checkout Started) * 100

Using our data from above:

(1 - 2908 / 3523) * 100 = 17.5%

This number should be smaller than the Cart Abandonment Rate since visitors who have started the checkout process have a greater intent to buy. Luckily, this is something you do have control over and can be optimized.

Statista graphed some of the most common reasons for Checkout Abandonment:

Common Reasons for Checkout Abandonment

Don't abandon reading now!

I know, I know: that last part was a little heavy. As a reward for making it this far, here are solutions to improving these rates, from best practices to site-specific insights. These cover pre- and post-abandonment strategies such as:

  • Ensuring that shipping costs (and the free shipping threshold) are front and centre
  • Featuring a progress bar to indicate how far along a customer is in the checkout process
  • Having a clear and easily accessible return policy
  • Providing a checkout experience that matches the look and feel of the whole website
  • Offering multiple payment methods
  • Matching the payment with whichever currency the customer expects
  • Displaying security supporting logos
  • Leveraging ads retargeting
  • Connecting with potential customers using cart recovery emails

The cart/checkout, while tremendously important, is not the only place store managers can optimize. Read our 3-part series Understanding your Online Shoppers Using Data online now: