April 30, 2009

Shopping Cart Abandonment: A Flawed Metric

One of the strategies we're asked to review is shopping cart abandonment. In the past two weeks, I noticed a number of trade journals, bloggers, and consultants promoting shopping cart improvement strategies.

There's no doubt that the shopping experience can be improved ... we all agree with that.

But shopping cart abandonment is an inherently flawed metric, a metric that does not do a good job of measuring longitudinal customer behavior.

If a shopping cart abandonment project succeeds, you will observe improvements in the following customer metrics --- answer these questions if you recently worked on a shopping cart abandonment project:
  1. In the six months after shopping cart abandonment improved, did the number of new customers increase at a rate faster than planned?
  2. In the six months after shopping cart abandonment improved, did the number of reactivated customers increase at a rate faster than planned?
  3. In the six months after shopping cart abandonment improved, did the retention rate of your twelve month buyer file improve?
  4. In the six months after shopping cart abandonment improved, did the orders per retained customer improve?
If the answer to these four questions is "no", and yet your shopping cart abandonment metric improved, then you did not fundamentally change customer behavior.

Ask the consultant you are working with to verify that these four metrics were improved when the consultant worked on prior shopping cart abandonment projects. Good consultants can provide you with this data, or if they are under NDA, they can at least verify the magnitude of improvement in customer metrics.

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