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How digitalization and data insights can help Retail & CPG to improve cart-to-checkout ratio

How digitalization and data insights can help Retail & CPG to improve cart-to-checkout ratio
July 09, 2020

Less than a decade ago, shopping malls were the bustling hubs of commerce but the growth of e-commerce and home delivery has changed that rapidly. By 2021, more than 2 billion customers are expected to make online purchases globally. In today’s digital world, e-commerce is a strong accelerator for retail and CPG companies.

However, the transition to online shopping platforms raises its own challenges and the most prominent among those is the cart-to-checkout ratio. Based on multiple studies conducted between 2012 through 2019, shopping cart abandonment accounts for up to 70% loss in sales. Digitalization and data insights can help reduce cart abandonment, which will, in turn, improve the cart-to-checkout ratio, allowing retail and CPG companies to grow faster.

Cart-to-checkout ratio is arguably the most important metric for any e-commerce business.

Cart-to-checkout Ratio is an important metric for e-commerce

Amazon’s ongoing disruption in retail is constantly raising the bar of customer expectations. One-click ordering, free and fast shipping, and world-class customer experience (CX) are causing seismic shifts in brick-and-mortar stores. Amazon has made physical retailers heavily invest in e-commerce. Retailers are responding by undertaking a rapid expansion of their digital ecosystem and data insights to elevate the customer experience. Yet, the challenges posed by a low cart-to-checkout ratio continues to be a pressing concern for the fast-growing industry’s digital journey.

A myriad of reasons contributes to the low cart-to-checkout ratio. Some of the most common reasons are:

  1. Account creation and complex check-out process: During 2014-2016, the second biggest cause of shopping cart abandonment was forced account creation. The average number of steps in checkout was more than 5.5. Almost 50% of the sites asked for repeat information.  An increasing number of users prefer accessing e-commerce platforms as guests and making purchases without sharing their personal information. As a result, a sizeable number of buyers abandon their carts when they are asked to create accounts to complete their transactions.
  2. Indecision: A lot of customers abandon their carts simply because they are not ready for the purchase. For some customers, the total value is too high to see through the checkout immediately and they leave the cart to return later. Another reason for cart abandonment is vouchers not being handy, or wrong coupons being applied.
  3. Inability to calculate taxes and shipping upfront: Unexpected costs after items are added to the cart make customers rethink about their purchase. Sometimes the total amount of purchase does not qualify for free shipping. Per a study, 38% of digital shoppers add extra items to their shopping cart to qualify for free shipping. Shopping cart abandonment is higher by 20% after adding extra items.
  4. Payment security: Security of card information is of the greatest concern. Customers tend to abandon their carts if they are not completely sure about the safety of payment information. It is, therefore, important to follow PCI compliance guidelines to store credit card details and validate transactions. A high-quality fraud management system that detects and prevents fraud is necessary. Prominent display of trust seals throughout the shopping transaction is a must.
  5. Technical issues: Websites or mobile applications of e-commerce platforms can often arrest the course of the transaction, causing customers to abandon their carts. Customers often abandon shopping carts if the website or the application is slow or has other performance issues. The inherent architecture of the websites and applications must factor technical contingencies, unexpected volume surges, zero downtime, and high responsiveness to incoming web traffic.  

Digitalization and data insights provide a decisive advantage to improve cart-to-checkout ratio.

Build credible digital experience (DX)

With the proliferation of smart devices and the availability of high-speed, low-latency internet, businesses and consumers are more empowered than ever before. Consumer habits and preferences are evolving frequently, therefore, businesses must catch-up by aligning their offerings with customer expectations in a digital ecosystem. In this digital world, anyone can create a website or an engaging app, but creating an experience that can securely digitize the critical processes to run the business is another story.

Retailers must shift focus from the products they offer to the experiences they provide.

Technology on its own doesn’t make something a digital experience. The right fusion of the physical and digital world is required to offer personalized and omnichannel shopping experiences.  

To prosper in the digital economy and unleash the untapped power of emerging new digital ecosystems, retailers must invest in providing hyper-personalized shopping experiences to surprise and delight the consumer at each interaction, regardless of channel or touchpoint.

There’s ample room in the digital economy for traditional retailers. They need e-commerce platforms with the capability to seamlessly combine digital content, complex business applications, and digitized business processes to provide secure authenticated access on a scalable platform.

Retailors must utilize digitalization for consumer engagement within-the-moment via the mobile, web, and internet-connected devices. Engaging customers at key moments in the digital journeys with digital content (e.g., exploring different products for comparisons, price checks, calculating taxes and shipping, and checkout) will help detect potential buyers who are about to leave without making a purchase. A hyper-personalized offer or a discount coupon at this stage will be useful to prevent cart abandonment.

Data insights for customer delight

Data is the life blood of any modern digital enterprise and a catalyst for business transformation. Retailers must use data analytics to create real-time actionable insights for enhanced decision making. Access to relevant and real-time data insights is required to deliver a personalized experience and excellent consumer engagement to boost the cart-to-checkout ratio.

Data analytics is critical to enterprise ambitions of hyper-personalizing their offerings, and in that pursuit, retailers must move from legacy sales processes. A focus on intelligent data analytics and the implementation of insights gleaned from it will provide enterprises greater visibility of their customers’ requirements on a personal level, allowing them to devise bespoke offers, products, and services.

In today’s digital economy, smart devices, social media platforms, and intelligent applications are generating huge volumes of data that hold the key to a better understanding of consumption patterns. With the help of AI, digital enterprises must analyze both structured and unstructured data to generate real-time insights. Finally, retailers will have to identify funnel leaks, tell a better visual story, build trust and credibility during the buying process, reinforce the benefits throughout checkout, reduce checkout fear, add social proofs/reviews, and intelligently use shopping cart recovery emails with the help of data analytics-driven actionable insights.


The post-COVID-19 pandemic world will see a sharp rise in e-Commerce. Retail and CPG companies must continue to enhance digital experience and analyze data to generate real-time actionable insights in a digital economy. Digitalization and definitive actionable insights from historical data are the two most important takeaways.