E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
Online retailers find it frustrating when consumers put items into a shopping cart and then leave the site. But there’s another way to look at the question: Many come back, and they often buy more when they do, says a Webtrends executive.
Imagine what real-life abandoned carts would look like in a store if non-committal shoppers perused the racks, put items in their carts and then left the items in the aisles. If in store shoppers abandoned their carts the way online shoppers do, aisles would be wastelands of disorganized merchandise resulting in retail chaos.
While most in-store shoppers don’t literally “abandon” their carts, online shoppers think nothing of placing items into a shopping cart and then promptly exiting a site. Online abandonment may not create the logistical chaos that it would in a store, but it does create chaos in the form of lost revenue. In fact, Forrester Research estimates that 87% of consumers abandon carts, resulting in $18 billion of lost revenue annually. Now, imagine what $18 billion of merchandise would look like in those carts.
What makes a cart abandoner run for the hills? According to a study by eMarketer, it isn’t just because that shirt is no longer in style. In a multiple response survey, here are the top five reasons that shoppers abandon their carts:
- 57% were not ready to purchase, but wanted to get an idea of the total cost with shipping
- 56% said they were not ready to purchase but wanted to save the cart for later
- 55% said shipping costs made the total purchase cost more
- 51% said the order value wasn’t large enough to qualify for free shipping
- 40% said shipping and handling costs were listed too late
While retailers are continually frustrated about the high abandonment numbers, there is another way to look at the data: Shoppers who place items into a cart are motivated to buy. The path to conversion may just require a few more stops and, ultimately, a final push. The best part: When abandoners return, more than half of them spend more because of add-on purchases, making cart abandoners for a promising source of additional revenue.
How do online retailers combat this non-committal purchasing habit and provide that final push conversion? Remarketing. However, in order to lure that customer back post-abandonment, it takes more than a basic template e-mail. In order to bring consumers back from the abandonment ledge, brands must approach remarketing in a much more strategic way.
What are the most important things that brands must consider when implementing e-mail remarketing campaigns? Here are the top three:
Abandoners have a short attention span. In fact, according to MIT, 90% of leads grow cold in one hour. Additionally, remarketing has the biggest impact in the first 12 hours and the CMO Council says that automated emails that are triggered by an action, or trigger e-mails, have a 95% higher open rate than traditional e-mails. This means that brands must be able to see the abandonment, gather personalized behavior data and generate the remarketing e-mail within a very short window. Forrester estimates that cart abandonment retargeting programs can generate as much as 25-40% return of e-mail program revenue; e-retailers can’t afford to not to invest in a system that provides these capabilities.
Frequency is just as important as timing. Many retailers send just one e-mail, while others opt for a series. What works for one brand may not work for another, so it is important to test which method garners better results. Online retailers are also sending e-mails closer to the time of abandonment because the site visit is still fresh in the consumer’s mind. Additionally, many retailers are finding that discounts and offers aren’t necessary to bring the abandoner back—sometimes a gentle reminder or two is enough.
An effective remarketing message isn’t just about what was placed in the cart; it’s about taking into account explicit and implicit knowledge of the consumer. Deliver a personalized message to the consumer by tailoring the content to reflect knowledge about an individual's profile, engagement history, and behaviors observed right up to the point of abandonment. With this information, marketers can determine if that consumer will respond best to a call to action, discount or offer to provide service—or if the cost of remarketing outweighs the value of the consumer.
Remarketing is proven to be an effective way to not just bring back abandoners, but also generate additional revenue through add-on purchases. Brands must become increasingly savvy in remarketing in order to keep up with the non-committal consumer. SeeWhy says that only 1% of visitors will buy on the first visit to your site, but that 66% of eventual conversions come through e-mail marketing, proving that chasing cart abandoners isn’t a waste of time.
In fact, cart abandoners are an e-retailer’s gold mine—an $18 billion gold mine, to be exact, so it is important for brands to have the proper tools to deliver the right message at the right time.
Webtrends provides data-driven marketing technologies for measuring and acting upon consumer behaviors across all digital channels.