TAU Study Reveals the Psychological Cost Behind Billions in Lost E-commerce Revenue

Shopping cart abandonment is one of the greatest financial challenges faced by the global e-commerce industry. According to recent estimates, more than 70% of online shopping carts are abandoned before payment. This means that customers who have already reached an advanced stage in the online purchasing process ultimately don’t buy, despite the vendor’s considerable investment in advertising, operations, and user experience. In other words, the costs have already been incurred, and when the purchase is not completed, the expected revenue is not received. If this occurs on a large scale, it amounts to an annual revenue loss of billions of dollars.

A psychological explanation behind the behavior

A new study conducted by researchers from the Coller School of Management at Tel Aviv University and George Washington University offers a psychological explanation for the phenomenon: online shopping carts containing more ‘indulgent’ products and fewer basic utilitarian products generate stronger feelings of guilt and wastefulness in the buyer, increasing the likelihood of cart abandonment.

The study was conducted by Prof. Liat Hadar, Prof. Yael Steinhart, and Prof. Yaniv Shani from the Coller School of Management at Tel Aviv University, together with Dr. Gil Appel, an assistant Prof. of marketing at the George Washington University School of Business. Published in the prominent Journal of Consumer Research, the study is based on analysis of large-scale e-commerce data alongside controlled experiments, aiming to examine how psychological considerations influence actual purchase decisions in a digital environment.

What drives abandonment

The main finding is clear: the higher the proportion of ‘indulgent’ products – meant for pleasure or pampering, relative to practical, basic products, the greater the likelihood of cart abandonment. Indulgent products include, for example, chocolates and sweets, scented candles, luxury personal care products, home décor items, clothes with funny prints, or amusing gadgets. In contrast, basic functional products are items perceived as necessary or useful, such as basic food or cleaning products, sports equipment, work clothes, batteries, water bottles, or storage boxes.

The researchers analyzed two vast e-commerce databases encompassing nearly 15 million items that had been either purchased or abandoned and conducted four controlled experiments. Across all methods and contexts, a consistent pattern was revealed: even after controlling for total cart price, number of items, browsing duration, and user traits, the ratio between indulgent and practical products significantly predicted cart abandonment.

The Research Team

Guilt, justification, and decision-making

According to the researchers, the explanation is not technical but psychological. Carts perceived as ‘indulgent’ or ‘non-essential’ – like those consisting mainly of indulgence items – evoke guilty feelings and difficulty in justifying the expense to oneself. This guilt amplifies hesitation and delay, sometimes leading to complete abandonment of the cart. In contrast, the inclusion of utilitarian products, such as basic consumer goods or functional items, creates a sense of balance and reduces guilt, even when the cart also contains indulgent items.

The researchers note that the study generates immediate implications and suggestions for e-commerce websites and their managers. Recommendations to purchase utilitarian products, such as everyday equipment or useful complementary items, may reduce abandonment, even if the consumer does not actually add them. Such recommendations, claim the researchers, change customers’ perception of their carts, reducing guilty feelings, and increasing conversion rates.

A small shift with a big impact

Prof. Liat Hadar concludes: “Our findings show that shopping cart abandonment does not stem only from technical considerations such as price or shipping, but from a deeper psychological process of purchase justification and guilt. When the shopping cart is perceived as too indulgent, consumers find it difficult to justify the expense to themselves and sometimes simply choose not to buy. The message for e-commerce companies is that small changes in the cart’s composition or in how it is presented, such as recommending useful products, can reduce guilt, improve the shopping experience, and lead to a significant economic impact.”