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Personalization Glossary

A/B testing? Recommendation models? The personalization engine space uses several acronyms that may seem daunting, so we're here to help. You can find definitions to the most common e-commerce customer experience optimization terms here!

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Cart Abandonment Rate

Shopping Cart Abandonment, or simply Cart Abandonment, is what happens when a shopper adds items to their cart but leaves the site without checking out. This means that you were successful in bringing your shoppers down the funnel, but failed to convert them.

Cart Abandonment Rate refers to the percentage of your shoppers who add items to their shopping cart and then abandon the cart, ending their session. It is the rate of potential customers who leave without buying anything, compared to the total number of shopping carts created. 

It is measured by dividing the total number of completed transactions by the total number of carts created, subtracting that value from 1, and then multiplying it by 100:

Cart Abandonment Rate = {1 – (No of orders completed / No  of carts created)} x 100

Simply put, is the inverse of a retailer’s conversion rate. The typical shopping cart abandonment rate for online retailers varies between 60% and 80%. If the cart abandonment rate is high, it could mean that there is a problem with :

  • Shopping cart design/layout
  • Checkout process
  • The shopper journey
  • Shipping/delivery fees

By addressing the cart abandonment rate, retailers should be able to see significant improvement in their conversion rate and merit in getting shoppers down the funnel. However, it is important to remember that cart abandonment rate varies based on the device that shoppers are using, and the problems that come with the shopping/checkout experience in each device need to be tackled separately. Mobile cart abandonment rates are higher than desktop or tablet, so it would be wise to tackle that first. Using a funnel-based approach to track the actions that lead to cart abandonment is a good start.

Cart abandonment rate also depends on the industry, Travel having among the highest cart abandonment rates. It is a function of ticket value, and the time it takes for a shopper to go from consideration to purchase. So it is important to make sure that this gap is closed.

Some other metrics that should be tracked in relation to Cart Abandonment Rate are Items Left in Cart, Average Order Value, and Conversion Rate.

Navigate between the letters, to explore the glossary terms

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