In e-commerce there is a metric called “abandonment rate” (either dropout rate), which refers to the Percentage of visits to an online store that begin with the checkout processAdding products to your shopping cart and leave the website at the time of completing the data for the payment and with that the shopkeeper loses a customer.
That rightaareas why the customer can cancel the purchase process are varied, but some of them may be related to the prices of our products.
In the graph below we see the percentage of the “abandonment rate” depending on the order amount. In order to make the examples that we mention later understandable for each country in Latin America, we prefer to illustrate the prices in US dollars. Below we share those Main conclusions explaining the graph:
- Potential buyers tend to abandon the cart (where they enter the data to complete the transaction) if the value of the purchase is relatively small in relation to the value of the shipping costs, because the latter is too expensive for them to buy. For example, if a lady wants to buy a bracelet for $15 and the shipping cost is $10, she is likely to abandon the purchase as she sees no value in paying almost the same price for the product for shipping. This explains the downward curve in the first part of the chart.
- As the order quantity increases, the abandonment rate decreases. as customers justify paying the shipping cost for a higher value purchase. This happens until the order price approaches $100. A appears here psychological barrier in which customers already think twice about making the purchase or not because it is a more significant amount.
- When this barrier is crossed, the percentage of abandonments decreases as the value of the order increases. This happens up to higher levels, starting at around $250, where the purchase decision becomes significantly more critical and thought through before it is finalized and because of this the abandonment rate increases again.
Although we give examples in dollars here, the psychological factor on prices occurs for each country. It’s just a matter of adjusting the value of the psychological barrier for each country and currency, depending on what the common man considers expensive or cheap.
Based on these conclusions, we would like to share a few with you Measures you can take in your online shop to reduce the “abandonment rate” and thus increase your sales.
- Offer a discount on shipping costs for small quantity purchases.
- Set a minimum order value of $99 (the approximate equivalent for each local currency, it is important to recognize the psychological barrier) offer free shipping.
- Consider a special promotion for individual products with a high abandonment rate.
If you consider these conclusions and apply some of the mentioned measures, you can increase sales and reduce the number of people who abandon the cart on your online store.
What pricing strategy are you planning to improve your business?