Now Slash Cart Abandonments With GoKwik's One-click Checkout

Cart Abandonment Meaning:

Cart abandonment refers to a situation when a shopper adds products to their online shopping cart but does not complete the purchase for any unknown reason. Today, this has become a common and pervasive issue among Indian eCommerce brands, affecting their bottom line and impeding growth.

Many studies show that the average cart abandonment rate hovers around 70%, showcasing an urgency for eCommerce brands to find an approach that helps tackle this challenge head-on. GoKwik, a leading eCommerce enablement company has cracked this code by developing a seamless one-click checkout process. But, more on it later.

Cart Abandonment Rate:

Cart abandonment rate refers to a phenomenon to measure the percentage of online shoppers who started the online purchase process cart but did not convert into paying customers.

Cart Abandonment Rate Formula:

In an ideal scenario, cart abandonment rate is calculated by dividing the number of abandoned carts by the total number of initiated carts, and multiplying the result by 100.

Cart abandonment rate formula is as follows:

Cart Abandonment Rate = (Number of Carts Created / Number of Carts Abandoned) ×100

To break it down:1. Number of Carts Abandoned: This is the total number of shopping carts that users have abandoned before completing the purchase.

2. Number of Carts Created: This represents the total number of shopping carts initiated or created during a specific time period.

3. Calculation: Divide the number of abandoned carts by the total number of carts created, then multiply by 100 to express the result as a percentage.

This metric is crucial for eCommerce businesses to assess the effectiveness of their checkout process and identify areas for improvement. A lower cart abandonment rate generally indicates that a brand has an optimised and user-friendly checkout process making shopping experience an easy breeze for shoppers.

The problem of cart abandonment not only impacts the revenue of an eCommerce brand but also hinders the brand’s relations with its customers and its overall business performance. Here are some key reasons why shopping cart abandonment is a problem for eCommerce brands:

One of the most significant impacts of cart abandonment is the loss of potential revenue. When customers abandon their shopping carts, a brand is unable to realise its potential sales. To give you an example, if a customer adds products worth INR 1000/- to their cart but abandons it, the eCommerce brand loses the opportunity to make that INR 1000/- sale.

High cart abandonment rates directly impact the overall conversion rates of a business. A lower conversion rate indicates that a smaller percentage of online shoppers are completing their purchases and contributing to business conversion rate.

For instance, if an eCommerce brand’s website is visited by 100 visitors per day and only about 20 of them make a purchase, then the brand’s conversion rate sits at 10%. Meanwhile, if 50 of them abandon their carts, then the conversion rate will drop to only 5%.

This is quite an imperative problem to explain. An eCommerce brand invests time and money in acquiring a new customer. However, if this customer abandons the cart, the cost of acquiring the new customer goes into vain.

To give you an example, a brand spends INR 200/- on acquiring a new customer via its marketing efforts. However, this customer visits the site, adds items to the cart but abandons it after some time. Now the brand has to again make efforts to bring that customer back to the website in an anticipation to make them convert into a paying customer. This is what defines high customer acquisition cost.

In a competitive eCommerce landscape like India’s, customers have numerous alternatives at hand. They’re free to hop from one eCommerce brand to another and buy items of their choice. However, brands lose customers to competition and witness a high cart abandonment rate.

After doing much cart abandonment analysis, folks at GoKwik realised that a process like one-click checkout is one of the most effective ways to reduce high cart abandonment rate. One-click checkout not only helps minimise the risk of high and frequent cart abandonment, but improves conversion rate, and ultimately enhances the profitability of an online store.