Online cart abandonment is a primary pain point for any e-commerce brand.
NB: This is an article from Persado
With cart abandonment rates around 70% on average on desktop and 80% on mobile, no retailer can escape the many negative effects of shopping cart abandonment on their business.
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What is cart abandonment?
Cart abandonment occurs when a customer adds item(s) to their online shopping cart, but doesn’t complete their purchase. It is different from abandoned checkout which is when a customer abandons their purchase further into the checkout process. Cart abandonment is obviously a lost sale and a missed opportunity to connect with customers. But, the effects of shopping cart abandonment go far beyond the missed revenue opportunity that occurs in the moment. There is a ripple effect that impacts other aspects of e-commerce operations, some of which seem far afield from the e-commerce site. For more insights into the causes of online cart abandonment, read our ultimate guide to cart abandonment.
5 effects of shopping cart abandonment that may surprise you
The many negative effects of shopping cart abandonment are often hidden. Abandoned carts aren’t usually associated with reduced website speeds, lower margins, or issues with inventory management, but these are, in fact, all side effects of online cart abandonment.
Let’s dive in to find out why.
1. Reduced ROI on marketing spend
One reason why customers put items into the online cart is because they were enticed by a marketing campaign. This could be content marketing, paid media, social media, influencer marketing, email marketing, etc. If the customer then abandons the cart, that marketing spend did not achieve a positive ROI. Too many abandoned carts can lead to a huge spike in customer acquisition costs and negative ROI on marketing spend. While some marketing campaigns produce a lot of clicks and traffic to the e-commerce site, they may not ultimately drive conversions.
As customer acquisition becomes more expensive and competitive, brands can drastically reduce customer acquisition costs by recovering more abandoned carts. Brands should pay close attention to which marketing campaigns are driving conversions (i.e. sales) and put the majority of their marketing resources behind these campaigns.
Note: E-commerce marketing campaigns that produce a ton of clicks, but few conversions should be examined more closely. Either they may not be reaching the right audience or there is something off about the website experience that is causing them not to convert.
2. Loss in customer lifetime value
Customer lifetime value or LTV is one of the most significant metrics for retailers.
Successful brands foster repeat customers in order to drive higher lifetime value. However, when a loyal customer abandons their cart, it potentially decreases the lifetime value of that customer. E-commerce brands can increase customer lifetime value by reducing cart abandonment before it happens and recovering more abandoned carts.