For online retailers, cart abandonment equals lost revenue. With the average online cart abandonment rate at almost 70%, these missed opportunities add up quickly. But, enterprises can improve abandoned cart recovery rates by revamping the processes and messages customers encounter during the online customer journey.
A few subtle design or language changes to your website or app could produce significant returns. The Baymard Institute finds the average large e-commerce site can produce a 35% increase in conversion rates through better checkout design.
Marketing messaging that motivates action produces significantly more e-commerce engagement. How can your company benefit? Let’s look at proven strategies to improve abandoned cart recovery starting with clarity about what cart abandonment is and why it happens.
What Is Cart Abandonment?
Calculate your site’s abandoned cart rate by dividing the total number of completed transactions by the number of initiated sales. Subtract the product from one and then multiply that by 100 to determine your abandonment rate (as a percentage).
For example: if an e-commerce store posted 5,000 sales in the last month and had 25,000 initiated shopping carts that did not result in a purchase, the result would be a 20% completion rate and an 80% cart abandonment rate.
What Sectors Suffer the Most?
Abandoned carts aren’t just a retail pain point. A study by Moosend in 2021 shows finance companies (which include insurance) endure the highest cart abandonment rate of 84%, followed by travel (82%), retail (77%), and fashion (68%). Conversely, the lowest rates occur when customers shop for groceries, consumer electronics, and pharmaceuticals.
Top Reasons for Cart Abandonment
Understanding why consumers leave items in their carts can help brands improve the methods they use to recover abandoned sales.
A main reason why shoppers abandon carts is that they weren’t there to purchase in the first place. E-commerce resonates with shoppers because of how convenient it is to browse and research products—anytime and anywhere. Consequently, a large portion of cart abandonment reflect the natural consequence of consumer window shopping. These browsers exit 56% of the time. Many others casually skim e-commerce sites and apps, saving items for later and exploring options. Most leave before they initiate the checkout flow.
Other top reasons for cart abandonment, according to the 2022 Baymard Institute Study include:
- High non-product costs (shipping, taxes, fees) (49%)
- A long and complex check out process (35%)
- Lack of trust giving credit card info (17%)
- Final costs weren’t displayed (17%)
- Return policy wasn’t satisfactory (12%)
Strategies to Improve Your Abandoned Cart Recovery Rate
Given these reasons why consumers abandon purchases, how do brands adapt the path-to-purchase to more frequently close an e-commerce sale? Many strategies involve adjustments to the broader customer experience.
For example, can you simplify the checkout process to include fewer steps? Can you offer clearer communication about extra costs such as taxes and shipping earlier in the journey. Another big one is to offer a guest checkout option so that shoppers wary of creating an account don’t have to—and to prevent distraction for those who are fine to create one but want to finish the transaction first. For window shoppers, you can also include an option for account holders to like, save, or favorite different items. That way they don’t rely on the cart to save items they may be interested in purchasing.
These actions can produce results. But, don’t overlook that the most effective way to improve your cart abandonment rates may be with a simple, automatic email.
Cart reminder emails
Many brands send emails to customers who’ve added items to a cart and left before completing the purchase. Research from Klaviyo indicates an open rate of 63% for these emails, and an average revenue gain of $10.75. You can do even better than that.
Persado customers that use our enterprise Generative AI to optimize subject lines and email messaging see a 41% average performance increase above what our customers would have achieved with their creative team’s pre-optimized messages.
For example, one luxury retailer worked with Persado to optimize the language in its cart abandonment email campaign. The winning message had subtle changes to the language in the subject line and the body of the email to leverage slightly more intense language oriented around the emotion of ATTENTION and to instill a stronger sense of URGENCY. Together, the changes led to 38% higher opens and ultimately 30% more completed orders, resulting in a 19% increase in revenue above what the retailer would have achieve if it had used its original message.
Timing also matters for the success of abandoned cart recovery emails. Sometimes shoppers get distracted. Sending a quick reminder between two and four hours after abandonment can be a great email marketing strategy to remind them to finish up. If customers don’t engage with the first email, send another one 24 hours later.
Still no transaction? Try sweetening the offer with free shipping. This can recover more than 20% of abandoned carts.
Other tactics to improve the impact of abandoned cart recovery emails include:
- Feature the abandoned item in the body of the email to remind shoppers what they were browsing
- Include social proof with customer testimonials and reviews
- Offer discount codes
Generative AI to Personalize Cart Recovery Emails
Segmenting customers into groups through metrics such as purchase history, cart size, and product preferences allows marketers to target them with personalized emails that further boost abandoned cart recovery. With those identified segments, then leverage Generative AI to develop different messaging and subject lines that motivate action based on the factors that appeal to each group.
While checkout is a vital time in the customer journey, brands can increase customer loyalty, engagement, and of course conversions by personalizing every stage of the omnichannel customer experience. Many of the world’s largest retail brands use the Persado Motivation AI Platform to create personalized language that engages customers, no matter where they are in their buyer journey. Our customer see:
- Improved abandoned cart recovery rates
- Increased revenue
- Massive uplift in conversions
- Increased upsells and cross-selling
Using the Persado Motivation AI Platform, brands across sectors are able to uncover the right language to reach customers in any digital channel and motivate them to complete their purchases.
In the financial services sector, for example, customers often leave online applications unfinished. But, when financial companies and insurers leverage the Persado enterprise Generative AI, they can discover the words that engage customers and motivate them to cross the finish line.
For example, Persado worked with a mortgage lender to generate the messages for a landing page ad to increase home equity line of credit applications. This strategy resulted in a 75% increase in loan applications. Abandoned carts will always be part of online shopping behavior. Brands have ways to minimize the problem.
Learn more about how the Persado Motivation AI helps retailers to improve customer engagement across the entire omnichannel customer experience in our 2023 Customer Motivation Report.
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