Shopping cart abandonment is, or at least should be, on the top of every online retailer's list of issues this year. Why? Because on average, 76 percent of online shoppers abandon their virtual carts before completing the sale. This costs e-retailers billions of dollars each year, and the problem is only getting worse.
Forrester recently conducted a report on shopping cart abandonment to determine why so many consumers abandon online transactions and found that 44 percent of those abandoners ditched their carts due to the exorbitant price of shipping, 41 percent abandoned because they weren't ready to purchase, and 27 percent abandoned specifically to shop around for the best price. Forrester also noted that the struggling U.S. economy has played a role in this new trend, as shoppers are more fastidious with their discretionary income.
However, all hope isn't lost. A few quick fixes on your e-commerce site can help lower your abandonment rate, such as displaying shipping rates and exchange/return policies. But the most important change you can make on your checkout page is to collect customers' email addresses in the first step. The more information you request before the email address, the more chances customers have to abandon the sale. And without the email address, you can't reach out to them with a shopping cart abandonment remarketing campaign.
This process has become very popular with Internet Retailer 500 companies, as 95 percent of them request the email address upfront. Online shoppers are familiar and comfortable with this practice. In fact, Forrester found that only 6 percent of online shoppers are averse to entering their email addresses because they're worried about being spammed. As long as you let customers know that you won't share their personal information, you'll be able to capture the information from most of your shoppers.
This means you'll be able to contact the shoppers that abandon the sale with a remarketing email campaign. Shopping cart abandonment emails can recover 20 percent or more of the lost revenue when handled correctly. Here are some tips from a few retailers who are doing it right:
In our latest shopping cart abandonment study of the Internet Retailer 1,000 companies, we found that 51.1 percent of the top 500 and 73.1 percent of the second 500 sent the first campaign within 24 hours of the abandonment, with 14.4 percent of the top 500 and 40.4 percent of the second 500 being sent within one hour. Sending sooner rather than later means your message reaches the customers when they're still engaged and considering the purchase.
VintageTub.com sends three remarketing messages to maximize conversions. The first message is sent 24 hours after the abandonment. If the sale isn't completed, a second message is sent 48 hours later -- and if the customer still hasn't returned to purchase the item, a third message is sent five days later. Think three messages is too many? Think again. The second and third messages bring in additional sales and revenue. The conversion rates of the three messages are 13.85 percent, 7.58 percent, and 26.09 percent, respectively. Look how much revenue would be left behind if only one message was sent.
Many retailers automatically include an offer in their shopping cart abandonment campaigns. But Birkenstock Central, which sends a five-message series to abandoners, maximizes revenue by suppressing offers in the first two messages. In many cases a simple reminder is enough to prompt customers to action, so offering discounts too early can deplete margins. A 5 percent discount is offered in the third message, and a 10 percent discount is offered in the fourth and fifth messages. This ensures that the discounts are used appropriately to tempt customers into making purchases, so margins and profitability remain strong. The shopping cart abandonment campaign works -- and the fifth message is still converting at 17 percent.
Timely, relevant, and well-planned shopping cart abandonment campaigns will greatly increase your online revenue and email ROI. In the case of BodyGuardz, shopping cart abandonment campaigns account for 15 percent of its email marketing revenue, while the messages are only 2.5 percent of its overall email volume. The automated solution produced a 3.2 percent lift in overall revenue, and you can achieve the same results. Taking another look at your email marketing campaign might reveal simple ways to increase revenue and ROI.
Ross Kramer is the CEO and co-founder of Listrak.
On Twitter? Follow iMedia Connection at @iMediaTweet.
"Pretty girl with a blank" and "E-mail marketing blue puzzle" image via Shutterstock.
Not a People Connection member?
Full Summit Calendar | Request Invite
1 9 Facebook hacks that will blow your mind
2 The most meaningless (and hilarious) job titles on LinkedIn
3 The state of brands on Instagram
4 Blogs every marketer should follow
5 5 signs you should end your vendor relationship