In the fast-paced world of e-commerce, the abandoned orders in app metric has emerged as a critical key performance Indicator (KPI) for businesses, especially within apps.
Specifically, this metric refers to instances where users add products to their online shopping cart, but fail to complete the purchase process. By taking a deep dive into the Abandoned Orders in App metric, businesses can identify potential obstacles in their checkout process, refine the user experience, and recapture potential lost revenue.
Key Takeaways
- Definition: Abandoned Orders in App refers to instances when users add products to their shopping cart within an ecommerce app, but do not complete the purchase.
- Calculation: Abandoned Orders in App is calculated by counting the number of orders initiated but not completed within the app.
- Strategic Importance: Tracking Abandoned Orders in App allows businesses to identify potential obstacles in the checkout process, refine the user experience, tailor retargeting strategies, optimize pricing, and forecast inventory needs.
- Optimization Strategies: Reducing abandoned orders in app can be achieved through strategies such as streamlining the checkout process, offering multiple payment options, ensuring transparent pricing and shipping, sending cart reminder notifications, and running retargeting campaigns.
- Limitations: While useful, Abandoned Orders in App may not reflect full customer intent, can be influenced by technical errors, does not differentiate between browsers and shoppers, lacks product-specific insights, is subject to external factors, does not indicate customer loyalty, and lacks context without additional metrics.
- Complementary Metrics: Abandoned orders in app should be evaluated alongside metrics such as conversion rate, customer lifetime value (CLV), and bounce rate for a comprehensive view of ecommerce performance.
Why does Abandoned Orders in App matter for your business?
The significance of tracking Abandoned Orders in your app extends beyond mere numbers:
- Potential Revenue: Every abandoned order represents potential revenue that was almost realized but slipped away at the last moment. By understanding and addressing the reasons for abandonment, businesses can reclaim a significant portion of this lost revenue.
- User Experience Insight: A high rate of abandoned orders could indicate issues in the checkout process or user experience that might deter potential customers.
- Marketing Strategy: It allows businesses to tailor retargeting strategies, such as sending personalized reminders or offering limited-time discounts to lure customers back.
- Price Optimization: Abandoned carts can also provide insights into product pricing, enabling businesses to adjust their pricing strategies accordingly.
- Inventory Forecasting: Monitoring which products are frequently added to carts but not purchased can help businesses forecast inventory needs and identify less popular products.
How to calculate Abandoned Orders in App ?
Explanation of the parts of the formula:
- Abandoned Orders in App refers to the number of orders initiated in the app but not completed. These are orders where customers have added items to their cart or started the checkout process but didn’t finalize the purchase for any reason.
For instance, a customer may have decided not to purchase the item, found a better deal elsewhere, encountered a technical issue, or simply left the app before completing the transaction. This could happen due to various factors such as complicated checkout process, unexpected costs, required account creation, or long delivery times.
Example Scenario
Suppose that on a particular day:
- Your app received a total of 500 orders.
- Out of these 500 orders, 100 were not finalized and hence considered as abandoned.
By simply counting these orders, you can determine the number of abandoned orders in the app:
- Abandoned Orders in App = 100
This indicates that 100 orders were abandoned on your app during this particular day.
Tips and recommendations for reducing Abandoned Orders in App
Streamline the checkout process
To reduce order abandonment, it’s important to streamline and simplify the checkout process. This includes minimizing the number of steps a customer must take before completing an order. For example, allowing customers to check out as a guest can eliminate the need to create an account – a step that often discourages potential buyers. In addition, providing clear instructions at each stage of the checkout process can help prevent confusion and reduce shopping cart abandonment.
Offer multiple payment options
A key factor that can contribute to shopping cart abandonment is a lack of preferred payment options. By offering a variety of payment methods, you can cater to a broader range of customers with different payment preferences. This could include credit/debit card payments, digital wallets such as Apple Pay or Google Wallet, and even cash on delivery, if applicable. Offering multiple payment options reassures customers and may encourage them to complete their purchase.
Transparent pricing and shipping
Transparency in pricing and shipping costs is another critical factor in reducing shopping cart abandonment. Unexpected shipping charges or additional costs added at the last step of the checkout process can turn customers off and cause them to abandon their carts. To prevent this, make sure all costs, including taxes and shipping fees, are clearly displayed upfront. This can help build trust and set appropriate cost expectations for the customer.
Send cart reminder emails or notifications
Personalized shopping cart reminder emails or notifications are a powerful tool to combat shopping cart abandonment. These reminders can encourage customers to return to their unfinished purchases. They can be tailored to the specific items left in the cart, perhaps even offering a limited-time discount or incentive to encourage immediate completion.
Offering a wish list feature
A wishlist feature is a helpful tool for customers who want to save items for later consideration without making an immediate purchase commitment. If customers often use their shopping carts as “wish lists,” a separate wishlist feature can help distinguish between simple browsing and real purchase intent. It also provides an opportunity for future engagement, as customers can be reminded of items saved to their wishlist.
Retargeting campaigns
Retargeting campaigns show ads to users based on their past activity in your app. For example, if a user showed interest in a particular product but didn’t complete the purchase, retargeting ads can remind them of that product later when they browse online. Effective retargeting campaigns can drive users back to your app and potentially convert their initial interest into a completed purchase.
Examples of use
Cart Reminder Strategies
- Scenario: An e-commerce app specializing in handmade crafts notices a rise in cart abandonment.
- Use Case Application: The business implements a strategy sending personalized email reminders to users 24 hours after they abandon their cart. The email includes images of the products left behind and a limited-time discount to incentivize completion. As a result, the app sees a 15% reduction in cart abandonment.
User Experience Feedback
- Scenario: A DTC fashion app identifies a spike in abandoned carts at the payment stage.
- Use Case Application: By collecting user feedback, the brand discovers that many users find their payment gateway confusing. The brand then revises the payment process, leading to a decrease in cart abandonment.
Wishlist Conversion
- Scenario: A tech e-commerce app observes that users often add items to carts but don’t purchase immediately.
- Use Case Application: Introducing a wishlist feature allows users to save products for later, reducing the pressure to buy immediately. The business then sends targeted promotions based on wishlist data, encouraging users to finalize their purchase.
Push Notification Engagement
- Scenario: A travel booking app notices that users often abandon their carts when booking flights or hotels.
- Use Case Application: The app introduces push notifications reminding users of their abandoned bookings. Notifications are timed based on user activity patterns and include details of the abandoned booking and a prompt to complete the purchase. This results in a decrease in cart abandonment rates.
Exit-Intent Popups
- Scenario: An online book store detects that many users leave the website without completing their purchases.
- Use Case Application: The website starts using exit-intent popups, which appear when the system predicts a user is about to leave the site. The popups offer a one-time discount or exclusive deal if the user completes the purchase right away, leading to increased conversion rates.
Abandoned Orders in App SMART goal example
Specific – Reduce abandoned orders in the application by 30% (currently at 5000 orders per month).
Measurable – The number of abandoned orders will be compared before and after the implementation of new strategies such as application UX improvements, customer incentives, and faster checkout processes.
Achievable – Yes, by analyzing the reasons for order abandonment, improving the user interface, incentivizing customers to complete purchases, and streamlining the checkout process.
Relevant – Yes. This goal aligns with the broader business goal of increasing sales and improving customer satisfaction.
Timed – Within four months of implementing the new strategies.
Limitations of using Abandoned Orders in App
While Abandoned Orders data can provide valuable insights into customer behavior in an ecommerce landscape, there are certain limitations when used in business analysis:
- Doesn’t Reflect the Full Customer Intent: Abandoned orders only account for the shoppers who didn’t complete their purchase. It doesn’t capture the intent or reasons behind why the customer abandoned the order, which could range from simple distractions to high shipping costs.
- Can Be Influenced by Technical Errors: Sometimes, customers may abandon an order due to technical glitches or difficulties in the checkout process. These issues might not reflect a lack of interest in the product but rather a poor user experience that needs to be addressed.
- Doesn’t Differentiate Between Browsers and Buyers: Some shoppers might use the cart function as a wishlist or for price comparisons, with no intention of buying. The metric doesn’t differentiate between these shoppers and those who intended to purchase.
- No Insight into Product-Specific Abandonment: Unless segmented further, abandoned orders data may not provide insights into which products or product categories have higher abandonment rates. This information could be crucial for inventory management and marketing strategies.
- Subject to External Factors: Abandoned orders can increase due to external factors like competitor promotions or macroeconomic changes. Therefore, it’s essential to consider the wider context when analyzing this metric.
- Not Indicative of Customer Loyalty: A customer abandoning an order doesn’t necessarily signify a loss of loyalty. They might still be frequent visitors to your website and potential future buyers.
- Overemphasis Can Lead to Neglecting Other Metrics: While trying to decrease abandoned orders, businesses might overlook other essential metrics like conversion rate, customer acquisition cost, or retention rates. Balance is key.
- Lacks Context Without Additional Metrics: Abandoned orders data in isolation doesn’t provide a full picture. For example, a high abandonment rate might be concerning, but if the business has a high traffic volume and strong retention, it might not be a significant issue.
In summary, while abandoned orders in app is a valuable metric in e-commerce analysis, it should be used in conjunction with other metrics to gain a comprehensive understanding of a company’s performance. It shouldn’t be the only metric used to make strategic decisions.
KPIs and metrics relevant to Abandoned Orders in App
- Conversion Rate: This measures how many users move from adding items to their cart to completing a purchase. A low conversion rate alongside a high Abandoned Orders in App metric could indicate friction in the checkout process.
- Customer Lifetime Value (CLV): It’s essential to see if users who abandon carts once tend to do so regularly or if they have higher purchase values in the long run.
- Bounce Rate: If users are leaving the app immediately after abandoning a cart, there might be technical or user experience issues to address.
By understanding abandoned orders in app alongside these metrics, your company can implement comprehensive strategies to improve user experience and revenue.
Final thoughts
Abandoned Orders in App are more than just a missed sale; they’re an opportunity to understand user behavior, refine the shopping experience, and unlock potential revenue. By addressing the reasons for cart abandonment, ecommerce businesses can optimize their app’s user journey and ensure that more users complete their purchases.
Abandoned Orders in App FAQ
What is Abandoned Orders in App?
It refers to instances when users add products to their cart within an e-commerce app but don’t proceed to finalize the purchase.
Why should I be concerned about high cart abandonment?
High cart abandonment can indicate potential issues in user experience, pricing, or product offerings and represents missed revenue opportunities.
How can I reduce cart abandonment?
Strategies include optimizing the checkout process, sending cart reminders, providing transparent pricing, and offering multiple payment options.
Are there related KPIs I should monitor?
Yes, monitoring Conversion Rate, Customer Lifetime Value, and Bounce Rate alongside Abandoned Orders in App can provide a comprehensive view of your e-commerce performance.
Is cart abandonment always a bad sign?
Not always. Sometimes users use carts as wishlists. However, a consistently high abandonment rate without eventual purchases may indicate underlying issues that need addressing.