Groupon says its focus is on the bottom line, rather than top-line growth.
A small e-retailer finds an innovative way of rescuing abandoned shopping carts—developed in-house at little expense and with good results.
Some people insist that if you want something done right, you should do it yourself. Geoffrey Baker did, and it put a stream of abandoned shopping carts back on track at his company’s web site.
Baker, webmaster at Maine-based Lighthousedepot.com, used the company’s existing ColdFusion technology platform to design an e-mail campaign that rounds up abandoned carts and offers shoppers another chance to buy them. The cost? About $1,200-most of it in Baker’s time to build the system. The minimal investment more than paid for itself in its first 10-day test, conducted during the holiday shopping season, when recovered carts rolled through check-out at Lighthousedepot.com to the tune of about $3,000.
Go for the flexibility
The other key ingredient in the campaign was the company’s already-installed Windows NT operating system. It requires more hardware and is costlier than other operating systems, but it provides more flexibility and development tools that can be used in-house, Baker says. “If you go with a cheaper operating system like Unix, your investment isn’t so much in the hardware as it is in the engineers who know how to run it,” he adds. “If you buy a systems package from a third party, there isn’t the same flexibility. To make any changes, you’d have to call up their IT department and get them to do something. The system we use can be operated by people without engineering degrees.”
Baker and other Lighthouse Depot executives hadn’t been thinking about abandoned shopping carts when they attended a regional direct marketing conference in New England last fall. But a presentation on the topic got their attention. “The statistics say as many at 70% of shopping carts are abandoned. Even if you have only 5% of your carts abandoned, if you can recover one through an automated process, it’s worth doing,” Baker says.
It took the company about a week to put its cart-recovery process together, using the web application server to gather up the relevant transaction information from its database. As part of database cleaning, all sales information that isn’t converted to an order is deleted after 30 days. Lighthousedepot.com decided to offer the carts to shoppers one more time before deleting them. Since the database had the shopping cart information anyway, Baker figured all he had to do was collect it, filter it based on whether the shopper had provided a valid e-mail address, and then fire off e-mails to shoppers.
Roll up your sleeves
He makes it sound as easy as rolling up a newspaper. But then, Lighthousedepot.com has pursued a roll-up-your-sleeves-and-do-it yourself approach since it launched in 1995 as the Internet arm of Lighthouse Depot, a retailer of lighthouse-related merchandise and the publisher of a magazine on the same topic. The web site was built in-house at a total cost of about $200,000, Baker estimates. It now contributes about 20% of total corporate sales of more than $5 million a year across web, store, and catalog channels.
In truth, designing the cart recovery program was a bit more complicated than simply gathering up the data and blasting out e-mails to shoppers. While Baker won’t share the rate of shopping cart abandonment at Lighhousedepot-.com, it’s a fair guess that it’s not a whole lot different from industrywide experience. That’s because like many other e-retailers, Lighthousedepot.com does everything it can to make it easy for shoppers to put objects into their carts. Shoppers aren’t required to register and provide their e-mail addresses when they put an object into their cart; and in fact, many don’t.
Visitors do, however, receive a unique 30-digit customer identification number upon entering the site. The system then tracks each object put into a cart during that visit by customer identification number. Even if shoppers don’t purchase anything, they may choose to register for a free magazine, free catalog, or other free promotion on the site. When that happens, any items placed in that person’s cart are transferred to database records that now identify the customer and cart by name and e-mail address rather than the anonymous customer ID number. That lets Lighthousedepot.com link the abandoned cart to an e-mail address and offer the shopper another chance to buy later, even if he or she hadn’t actually registered to start the buying process.
In media res
Baker estimates that only a third of the abandoned carts are eligible for recovery, as shoppers who simply browse without registering, whether to become members, buy, or for freebies, don’t leave a traceable e-mail address for contact later. In the first test, some 2,300 lost shopping carts were gathered up from the database, but only about 800 proved to be attached to valid e-mail addresses. Of that number, an estimated 30 to 40 shoppers completed the purchase of their recovered cart.
When the database can match an abandoned cart with a valid e-mail address, it generates an e-mail message to the shopper, reminding him or her that the cart is still there and offering a link back to the saved cart on the Lighthousedepot.com web site. Shoppers who click on the link return to the middle of the shopping process, with the filled cart recovered from the database standing ready for purchase. From that point, they can follow the usual page prompts to finish the purchase as well as click anywhere in the site from that page. The e-mail also tells shoppers that if they choose not to link back and buy the saved cart, it will be deleted from the database in another 14 days. After the initial test, Baker automated the program to run itself on Sunday nights every two weeks.
He says the company has received no negative customer reactions to the e-mails; only, in a few cases, surprise. “Some people have responded that they didn’t realize they were creating a cart as they moved around the site,” he says. “But there’s been zero indignation. Lighthouses are a real niche, and if people have gotten to the point of choosing items, 99.5% of them have significant interest in the topic anyway.”