In order to report and comment on all the very useful, moderately useful, and completely useless e-commerce tools in the marketplace, I have to interview many companies and many marketing executives. Almost without exception, they tell me the grim news about shopping cart abandonment rates, and how that is a compelling argument for enlisting their assistance. I''ve probably mentioned that I love white papers and research reports. I''m one of those really boring people who even reads the footnotes. eMarketer, an excellent Web site and research firm, was kind enough to send me their B2C report - 213 pages of dry statistics - what fun! Finally, on page 89 of this fascinating report, I uncovered the truth behind the abandonment rate hype.
Whom to Believe?
You''ve probably read that shopping cart abandonment rates hover around 75%, with BizRate cited as the source. However, according to the eMarketer''s eCommerce: B2C Report) from April 2000, there is by no means universal agreement on what the actual abandonment rate is. Andersen Consulting and Forrester Research both show shopping cart abandonment rates of 25%. Jupiter Communications reports a shopping cart abandonment rate of 27%. eMarketer itself reports 32% as the actual rate. NetEffect and Greenfield Online report the rate at 67%. I don''t know what Greenfield Online''s angle is, but NetEffect has a real-time customer service product they''re interested in selling you, so their high number needs to be considered in that context.
In fact, BizRate''s statistic was taken wildly out of context. I have a copy of their research, and the quote that should have been published was, "75% of ebuyers have abandoned a shopping cart in the last three months; those ebuyers who have abandoned a shopping cart do so on average, nearly once a month." That sounds to me like 75% of online shoppers (in the last three months - but we''re going to generalize here) abandon a cart nearly once a month. Even if you broaden it to "75% of online shoppers abandon a cart once a month," that doesn''t mean that 75% of carts are abandoned unless each of these shoppers only fills one cart a month. In fact, the statistic immediately preceding the one about abandonment reads: "The average ebuyer makes six online purchases every three months." So while 75% of online shoppers abandon one cart a month, they also make two purchases a month. To my way of figuring, that makes the actual abandonment rate: .75 * 1 (abandoned cart) / 3 (filled carts) = .25 or 25%!
I believe it was Mark Twain who said, "There are three kinds of lies: lies, damn lies, and statistics."
Alexis D. Gutzman is an E-commerce Technology Author and Consultant and author of The HTML 4 Bible, FrontPage 2000 Answers!, and ColdFusion 4 for Dummies. Her newest book, The E-commerce Arsenal: 12 Technologies You Need to Prevail in the Digital Arena will be out in October. She can be reached at agutzman@internet.com
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