The amount of time and energy that goes into making your ecommerce business successful is multifold. You’re allocating resources to pinpoint which marketing channels help you connect with your audience best. You’re constantly working on sales messaging to convert seemingly interested prospects into advocating customers. You’re always sourcing feedback from customers to ensure they’re satisfied with your products and services. It honestly never ends.
So when a potential customer is about to make a purchase and suddenly abandons the checkout process, it hurts. And if it’s happening regularly, this directly impacts the time, effort, and money you’re spending on your business. So, if you run an ecommerce business, checkout abandonment is something you can’t afford. Continue reading to learn more about:
What is Checkout Abandonment and Why is it Happening?
The Top Reasons your Customers are Abandoning the Checkout Process
Simplifying the Checkout Process
Ways to Reduce Checkout Abandonment and Increase Conversions
What is Checkout Abandonment and Why is it Happening?
Checkout abandonment occurs when an online shopper begins the purchase process but never actually completes the purchase. Items are often left in their virtual shopping carts and considered abandoned.
If you’re a frequent online shopper at one point or another, you’ve been guilty of checkout abandonment. Maybe you were interrupted by a phone call from a family member, forgot about dinner in the oven, or just had a change of heart right before clicking “complete purchase” Whatever the reason – you didn’t end up buying what you intended to.
For consumers, it’s just something that happens sometimes. For ecommerce businesses, it’s a challenge that requires constant attention and strategic testing that aims to get shoppers to complete their online purchases fully.
Checkout Abandonment vs. Cart Abandonment – What’s the Difference?
In this article, we’re talking about checkout abandonment. That’s not to be confused with your cart abandonment. Many people mistake the two. While it’s true that they’re both terms used to describe an interruption to the checkout process, there are some differences between them.
The main difference between checkout abandonment and cart abandonment is the actual stage in which the abandonment occurs. By stage, we mean the period in the sales process when the customer navigates away.
Cart abandonment occurs when a customer leaves a website after placing items in their online shopping cart. They have set those items aside with the intent to purchase but haven’t initiated the checkout process yet.
Checkout abandonment happens when a customer leaves the site after clicking on the checkout option and going to the checkout screen. Once there, they’re prompted to enter payment information, confirm everything regarding the order, and complete the sale. Obviously, checkout abandonment shows more initial purchase intent than cart abandonment. It’s far easier for customers to place items in their carts to remember for later. This often happens, even if they’re not planning on making a purchase immediately.
However, with checkout abandonment, the customer has made a conscious decision to start the checkout process, and something stops them from completing the purchase.
Customers’ reasons for dropping off need to be identified and examined so that objections can be overcome. That’s what we’re covering here.
How To Calculate Checkout Abandonment Rate?
Before focusing on why your customers are abandoning your eCommerce site at checkout, you first need to understand how many customers are abandoning your checkout screen.
The percentage of customers who commit checkout abandonment in a set period is your checkout abandonment rate, which you can calculate with a simple formula.
First, decide the period you’re measuring. This could be a month, a quarter, six months, a year, or whatever helps you get a sense of growth over time.
Divide your total number of completed transactions for that period by your checkout initiations. You’ll then subtract that result from one and multiply the answer by 100.
So, if you have 6,000 checkout initiations over six months and 4,500 successful purchases, this is what the formula would look like:
(1 – (4,500/6,000)) x 100
4,500 divided by 6,000 is 0.75. One minus 0.75 is 0.25. Finally, 0.25 times 100 gives us 25.
Our checkout abandonment rate for these six months is 25%.
Checkout Abandonment Benchmarks
You should be able to tell whether your checkout abandonment rate is good or not by comparing it to various benchmarks. This will differ by industry, so it’s best to compare yourself with competitors.
The overall average checkout abandonment rate, regardless of industry, is 69.8%.
When we break things down by industry, we see a lot of interesting benchmarks. For example, the retail industry has a high average checkout abandonment rate of 72.8%.
However, in the B2B-heavy tech industry, the average checkout abandonment rate is only 18%. So, while our 25% example above would be outstanding for a retail ecommerce company, it would be abnormally high for a tech company.
The Top Reasons Your customers are Abandoning the Checkout Process
There’s no way to know exactly why someone abandons the checkout process every time, but let’s take a look at some data that can help better understand why this could be happening at your business.
Let’s examine a few of these reasons noted above:
1. “I Didn’t Trust the Site With My Credit Card Information”
Data security is a high priority for online shoppers and can make people skeptical when any little thing seems off on a shopping site. Nobody wants to be a scam victim. It’s crucial that your checkout process is simple and makes your shoppers feel secure. They’re sharing extremely sensitive information and need to feel like they’re in good hands.
Implementing data security checkpoints and showing that your online business is compliant will ensure that all data security regulations in your region can help shoppers feel better about sharing their data to with you.
2. “Website Had Errors/Crashed”
Ever been shopping online, and as you’re adding items to your cart or right before you get ready to check out, the site crashes? It’s a massive turn-off for shoppers and can discourage them from purchasing anything from your business in the future. In an era where even a slow loading page will deter a site visitor, ensuring your site is always functioning at top capacity is imperative.
Invest in the best tools to guarantee a fully functioning site. If you’re planning to make significant changes that could alter how customers interact with your site, devise a rollout plan to help you implement changes incrementally to minimize site errors or crashes.
3. “Too Long/Complicated Checkout Process”
Shoppers often feel like the checkout process is too long or complicated. People enjoy shopping online because of the convenience it provides. However, if a lengthy or complex checkout process disrupts that convenience, they’re missing out on one of the essential benefits of online shopping. Simplicity is key.
4. “There Were Unexpected Fees at Checkout”
No one likes to see excess fees calculated right at the finish line. It can be a turnoff for your customers if you’re tossing in convenience fees, service fees, and extra shipping costs right before checkout is completed.
That’s why you need to be very upfront with your customers about what they’ll be charged. Don’t try to hide extra costs and hope they won’t see them. Remember, your customers have to be able to trust your brand with their personal information. You don’t want them thinking you’re sneaky or dishonest.
5. “There Were No Payment Options I Trusted”
Many customers are wary about who they provide with their banking information. After all, cybercrime is a serious threat, and breaches do happen. That’s why many customers look for payment options they trust.
While some eCommerce retailers have taken to using well-known services like PayPal for checkout, these platforms tend to take a large chunk of your profits. Instead of turning to a big-name company and handing them your money, you can instill trust in your customers by letting them know how you’ll protect their information.
Have high-level security, including using a CVV/CVC pin for all credit card transactions. You could also accept cryptocurrency, which is highly encrypted. Adhere to all PCI guidelines and ensure that customers know the steps you’ve taken to keep them safe.
6. “My Credit Card Was Declined”
This is a fairly common reason for checkout abandonment. If the customer doesn’t have enough money on their card and it’s declined, there’s nothing you can do about that. But, cards can also be declined if the customer makes an error during checkout.
You can avoid user error by making your checkout page very straightforward and user-friendly. It’s jarring to go from a simple product page to a highly busy checkout page. Working with a checkout provider that uses a dynamic rules fraud system is also important. This will prevent your sales from declining because a bank mistakenly believes the transaction is fraudulent.
7. “I Didn’t Trust the Shipping Provider”
If you want to work with smaller and cheaper shipping providers, that’s great. However, some customers might be less comfortable entrusting a shipping company they’ve never heard of before and more comfortable eating high shipping costs for security.
That’s why, even if you’re offering cheaper, lesser-known alternatives, you should still have trusted shipping providers like UPS and Fed-Ex listed on your site.
8. “They Wanted Too Much Personal Information”
Data is power in the modern business world. Every business owner knows this. However, your customers also know this, and they’re becoming increasingly wary about how much information they provide.
You can stop this from impacting your checkout abandonment rate by sticking to the minimum amount of information you need to complete a sale. If you allow customers to make accounts for your online store, consider also offering guest checkout if they’re uncomfortable giving you a ton of data.
Checkout Abandonment Metrics To Track and Monitor
You can use several metrics to determine the impact checkout abandonment has on your business. Here are some of the most common metrics that you can track.
1. Value of Abandoned Orders
How much money are you losing because of checkout abandonment? By adding up the values of orders that were never completed, you can see exactly how much you’re missing out on and the impact this has on your business.
For example, if you’re getting a lot of customers abandoning before purchasing lower-priced items, your bottom line isn’t taking too much of a hit. On the other hand, a small number of customers abandoning purchases of expensive items will have more of an effect.
2. Customer Journey Impact
How long is it taking for someone to make a purchase? How many times are they coming to your site before ultimately buying from you? If you find that customers are abandoning your site multiple times, you need to figure out why that is. What are they waiting for? What information don’t they have? How can you give them that information sooner to close sales faster?
3. Load Times on Checkout Pages
If you’re noticing a lot of checkout abandonment, look at your website performance. Is the checkout page loading too slowly? If that’s happening, take steps to speed the page up. Compress your images, minify your coding, and take whatever other measures are needed to let people check out faster.
4. Abandonment Rate Over a Long Period
While it’s important to understand your checkout abandonment rate in the short term, it also helps to look at the big picture over a more extended period. For example, you might have an abandonment rate of 25% in the last quarter. But when you look at the entire year, you could have an abandonment rate of over 70%.
This also lets you know how you’ve progressed. If you noticed a huge checkout abandonment spike at a certain period, you know that something specific happened during that time to push people away.
5. Type of Devices
What devices are your customers using when checking out? Suppose you notice a considerable abandonment rate among customers who check out via mobile devices vs. those who check out on desktop. In that case, you’ll know that there’s some process issue with your mobile checkout that someone needs to address.
4 Ways To Reduce Checkout Abandonment and Increase Conversions
Checkout abandonment might be eating into your conversions, but there are steps you can take to lower abandonment numbers and improve your bottom line.
Here are four actionable abandonment solutions that you can take to reduce your checkout abandonment rate and improve your conversion rate.
1. Checkout Flow Optimization
How efficient is your checkout flow? Is your checkout experience optimized for maximum conversions? If not, you likely have a larger than average checkout abandonment rate. But you can improve those numbers by providing customers with an easy-to-understand user experience that speeds the checkout process and maximizes efficiency.
There are many ways to optimize the checkout flow. Some of these include:
- Guiding the user by giving them detailed instructions.
- Improving the speed of your checkout page
- Being upfront about charges that your customer will see on the final checkout page
- Implementing advanced security options and letting customers know about them
- Collecting only the data you need
- Shortening the purchase funnel to make the shopping experience streamlined
- Providing a variety of payment and shipping options to ensure customer comfort and convenience
2. Notifications and Triggers To Bring Users Back to the Checkout Page
By studying the behaviors of your customers, you can accurately predict when their actions are starting to show signs of checkout abandonment. For example, if they navigate toward the search bar in their browser or try to x-out the tab, you can stop them with a notification or reminder that will keep them on the checkout page.
You could hit them with a pop-up that reminds them of their impending purchase or asks them why they’re navigating away. You could also save their cart automatically so they can come right back and pick it up from the point of abandonment.
You could even include information about customer support options or a link to connect with an agent via live chat if a process issue prevents the customer from completing their purchase.
3. Checkout Abandonment Emails
As long as you have customer email addresses, you’ll be able to follow up with those who abandon your website at checkout. In the email, remind them of their purchase and provide a means to return to the checkout page as if nothing happened.
You can also provide a small survey in the email to ask them why their checkout process was interrupted. This could help you identify issues driving customers away.
4. Checkout Abandonment Discounts
Never underestimate the power and importance of good discount incentives. If you’ve sent a reminder already and nothing seems to be bringing your customer back to the checkout page, try offering them a discount.
Is it a financial hit? Yes, but even a small discount goes a long way. Also, it shows your potential customer that you’re a company that cares, and it could earn you a few loyalty points along the way. Make sure that if you’re using an automation platform to send these offers out, it’s only going to each user once. You don’t want a group of customers purposely abandoning your checkout page to get a discount.
Checkout Abandonment Remarketing, Mailer Templates, and Examples
When bringing customers back to your checkout page, it helps to try a remarketing campaign that involves emailing and messaging.
An email remarketing plan will automatically contact customers who reached your checkout page and left without making a purchase. Email marketing can be one of the best ways to reach them.
Let’s first focus on how to structure these messages.
First, you want a strong subject line that pulls the reader in. When you first reach out, the email should be a simple reminder, alerting them that they did not complete their sale. If that doesn’t work, try offering them a coupon. If that still doesn’t work, send them one final reminder regarding both the abandoned checkout and the discount you’re offering.
The reminder email should go out within a few hours of the initial abandonment. If you still haven’t heard from the customer after two days, it’s time to offer up the coupon deal. Then, if the abandonment reaches one week, go for broke with your final reminder email.
Cart Abandonment Recovery Email Messaging Examples
We’ve gathered three excellent examples of checkout abandonment remarketing emails to show you how to be most effective when running a remarketing email campaign. Just make sure that the email system you’re using allows you to track the success or failure of these emails to gauge whether you need to stay the course or change up your approach.
Example 1: Amazon Reminder
In this gentle reminder email, Amazon reaches out to the customer, addressing them by name and letting them know they still have items in their cart. The world’s number one eCommerce store keeps the messaging short and sweet with several calls to action and visual aids that could remind the customer why they were excited to make this purchase in the first place.
Example 2: Business & Pleasure Discount Email
In the above image, Business & Pleasure attempts to lure the customer back with a 15% off discount, providing them with a coupon code to enter at checkout. There are also three different links (including a large blue CTA button) that will take the customer back to the checkout page.
Example 3: Ugmonk Personalized Message
In this final example, Ugmonk takes a different approach, creating a personalized message from the company’s owner that seems to be written specifically for the customer. It’s addressed to him in a conversational tone, shows the owner’s passion for the industry and excitement to fulfill the order, and features two distinct calls to action.
5 Tips to Simplify your Checkout Process
Let’s say your business is steadily gaining more online visitors over a period of time. And with that growth, you also see a spike in new customers. But there’s still something that seems off because the revenue isn’t exactly matching the visitor volume. You dig a little deeper and realize that there’s a specific point where people are dropping off – the checkout point. Your business is attracting traffic, but your checkout process keeps all of that traffic from converting to customers.
Simplifying the checkout process is crucial to improving revenues and giving customers a better experience on your website. Through testing and optimizing some aspects of the checkout process, you can increase site conversion without incurring extra marketing expenses. But how do you simplify a checkout process, exactly?
You have to start with monitoring your revenue and repeat buys to determine how you are fairing. You want to watch the conversion rate, growth, and trend over time to ensure you get optimum returns from your users on revenue matters. In particular, you want to test and optimize the checkout process to ensure you are getting maximum revenues.
1. KISS – Keep It Simple and Secure
If you want a checkout flow that makes users scream, “take my money,” you need to Keep It Simple and Secure. Often, checkout pages are packed with unwanted information that only distracts the customer from the ultimate purpose – conversion. Some examples of obvious friction to a new user while checking out:
- Long checkout process with too many fields
- Security issues (e.g., excessive checks, no signs of assurance, etc.)
- Forced sign up or account creation
The checkout experience determines whether the user will complete the transaction or give up midway. Nobody wants to fill out 50 odd fields before subscribing to regular supplies of pet food. That’s a sure-shot way to an abandoned cart. 🙁
2. Easy UX
Excellent UX (user experience) is essential for online shopping businesses. Remember that for the user, it’s all about convenience. They should feel like their experience is better than actually visiting a brick-and-mortar retailer.
Making sure that it’s easy for them to navigate the site, browse without linear navigation, add or remove products from the shopping cart, apply discount or gift card codes is all part of ensuring they have a smooth online shopping experience.
Tools like Ajax dynamically update the page without the customer having to refresh. You can also study how people navigate your site to understand their behavior better. These insights will help you stay in tune with your audience so you can keep giving them exactly what they want.
Include a Visual Process Indicator
Show the customer what to expect along the checkout process. Customers should know what information will be required in the next stage and review their orders during the process. Using a visual progress indicator with a description of each step can be beneficial for certain businesses.
Reduce the number of steps in your checkout process. Too many steps can crush your conversion rate. While Amazon and the like may have eight steps and still emerge among the top companies, customers trust the brands and are loyal to them. So for your startup, stick to 3 to 4 checkout steps.
Design Experiences, Not Forms
Less is more. Every additional field in your checkout is a hurdle your would-be customer has to cross. Do you need a user’s phone, email, and address right away? Now ask yourself if it’s worth the possibility of losing a sale — or thousands of deals — just because you want to fill a database. Only ask what’s relevant to getting the customer’s order completed.
The Exception to Forms
Ecommerce businesses have to have order forms for customers to place purchases. But we know that people don’t like spending time filling out too many form fields. Here are a few tips to optimize forms for conversions:
- Pre-populate as many fields as you can
- Communicate errors clearly via error messages
- Automatically provide real-time validation as a user types. The easier you make it to complete forms, the fewer errors people will make. It’s a win-win.
- Ensure that autofill works consistently across platforms and browsers so that your customers can check out faster.
- Craft mobile-friendly forms for those mobile users who already represent a hurried, less-tolerant segment of users.
- Coupon code fields can help and harm. While they are an effective way to win customers at checkout, ensure it does not impact the purchase flow. Test and iterate to see what works for you.
Customizations and Clicks – When Less is More
Ensure the customizations applied to your checkout page are consistent and familiar. Beware: A slightly different background color, new fields, buttons with different colors, varied font types, or sizes can break the experience.
Limit the number of clicks and make navigation smooth. There are pros and cons to the idea of going with a single or multi-page checkout. The critical question is, how do you pick the one that’s right for you? Learning about your audience and constantly running tests.
3. Emphasize Security and Privacy
Customers need constant reassurance on security and privacy. Checkout pages collect sensitive payment information and personal information as well. You need to show customers that you are serious about security and take every possible precaution to handle their payment data and personal information safely.
These are few essential security goals you need to achieve to win your customer’s confidence:
- Have a Secure Sockets Layer (SSL) certificate for your website to provide a secure connection and encrypt credit card information.
- Comply to PCI Security Standards Council (PCI SSC) to protect card data
- Adhere to ISO, SOC 1 & SOC 2, and MFA standards to ensure Internal Data security.
- Follow network, application, and operational level security policies.
- Display your security credentials with SSL and PCI badges, just as Chargebee does in the screenshot below.
Pro tip: Subscription management platforms like Chargebee take on all your security and compliance heavy-lifting so you can offer a secure checkout experience without building all the capabilities yourself. Learn more about security and compliance with Chargebee here.
“Unless you have expertise in the space and are aware of security risks & infrastructure needs, do not set out to build your own billing. It’s not an efficient use of your time.”
– Fred Stutzman, CEO, Freedom
4. Shoppers Need Choices, Convenience, and Control
Purchases aren’t driven by impulse. Experiences drive them. Markets today are driven by choice, and your customers have multiple good alternatives to choose from. To survive, your business needs to differentiate. So does your checkout. A compelling experience offers users more choices to pay, more control over payments, and more convenience over the checkout process.
Spoil Customers with Multiple Payment Options
Offering users the choice of multiple payment methods is more than a mandate to curb drop-offs at the checkout. According to a report by WorldPay, 55% of users would cancel their purchase if their preferred payment method was not available. Note the word “preferred.” Payment methods and choices vary from country to region, and buyer persona and individual preferences. Some cultures are comfortable handing out their card details, while others are still averse to credit card risk and may prefer direct debit.
The End-to-end Localized Checkout Experience
Localized checkout experiences convert better. You make it easier for users to understand what they are paying for, and you can accept payments in modes that THEY prefer.
- No more currency converters: Support for multiple currencies
As your ecommerce business grows, your checkout must be ready for cross-border sales. When your checkout allows users to check out in their local currency, you also save them money – restricted currency options, mean that users end up paying extra in conversion costs. And no one likes additional charges. Did you know! Chargebee supports payments in more than 100 currencies.
- Your Checkout should speak more than Just English.
Put yourself in your customer’s shoes and go through the entire checkout process in a foreign language —FRICTION. Don’t let language barriers or miscommunications create a terrible checkout experience for your subscribers. Below is an example of a checkout that talks to customers in their native language.
Your Checkout should speak more than Just English.
Put yourself in your customer’s shoes and go through the entire checkout process in a foreign language —FRICTION. Don’t let language barriers or miscommunications create an awful checkout experience for your subscribers. Below is an example of a checkout that talks to customers in their native language.
5. Create a Checkout that Does More than Expected
At each point in growth, an ecommerce business particularly one that deals with subscriptions will encounter different workflows and objectives. We need to think of the checkout solution as a one-stop shop that can accommodate all the requirements your business might have now and the ones you might need down the line.
Ecommerce businesses encounter use cases like this every day:
- Handling international taxes
A possible buzzkill to globalization is international taxes —tracking the customers’ locations, calculating the country’s local tax rates, complying with international tax laws. Businesses need sophisticated checkout that can dynamically calculate and apply accurate taxes in real-time. Your customers should be able to access local pricing in any area that your product and services are available.
- Mastering the art of up-selling, upgrades and add-ons
Up-selling not only accelerates profitability but is also critical for customer retention. Up-sell opportunities include —add-ons, plan upgrades, etc. Whether a user bills a recurring or a non-recurring add-on, a flat fee or a tiered add-on, or makes quantity changes to add-ons —a checkout should be efficient to handle all scenarios elegantly. A transparent and clear breakdown of the user’s payment adds value to the checkout experience.
- Track the drop-offs to convert the “Maybes” to MRR
Cart abandonment data is King. The number of visitors that leave your checkout without completing a purchase serves as a source for tracking lost revenue and dropped checkouts. And you can improve anything you can measure.
Test, Test, and Test Again
We need to think of the checkout solution as a one-stop shop that can accommodate all the requirements that your business might have now and the ones you might need down the line.
These must-haves and essentials are ideal points for optimizing your checkout pages to achieve the ultimate goal of a frictionless payment experience that will combat lost sales. Yet, there is no one-solution-fits-all approach.
Using a subscription billing platform like Chargebee, you can build smart checkouts that offer a frictionless payment experience that will fit your workflow like a glove.
At Chargebee, we are committed to helping you make checkout frictionless. Want to learn more about how Chargebee can empower your checkout experience? Sign up for a free trial, give it a spin and let us know what you think.
Checkout Abandonment FAQs
What Is Checkout Abandonment?
Checkout abandonment is when a customer starts the website cart checkout process and then navigates away without completing the purchase.
What Is the Difference Between Cart Abandonment and Checkout Abandonment?
Cart abandonment is when someone places items in an eCommerce shopping cart and then leaves the site without checking out. Checkout abandonment is when a customer leaves after clicking the checkout button but before they’ve completed the sale.
How Do You Fix Abandoned Checkouts?
You can attempt to win back abandoned checkouts through remarketing campaigns specifically targeted at people who started the checkout process but didn’t complete their purchase. Offer them a gentle touch email the first time, followed by a discount offer if they don’t respond.
What Do You Do With an Abandoned Checkout?
When you have an abandoned checkout, you should try your best to reach back out to the customer to try and coerce them back. You should also attempt to understand why the customer abandoned their purchase and work to ensure that other customers don’t have that same experience.
What is the Average Checkout Abandonment Rate?
The average checkout abandonment rate is 69.8%, but it can vary based on your industry.
Why Are There So Many Abandoned Checkouts?
Customers abandon checkout pages for many reasons, including:
- Not trusting the site with their credit card information
- An error-filled website that crashes
- A long and complicated checkout process
- Unexpected fees at checkout
- A lack of trusted payment options
- Declined credit card
- Lack of trustworthy shipping partners
- Having to enter too much personal information/make an account
What Is a Good Checkout Conversion Rate?
The top 20% of stores have a checkout conversion rate of over 63.6%. The top 10% of stores in the world have a checkout conversion rate of over 70%.