Hey, you forgot something! What’s with all those abandoned carts?
Shopping carts are littering the internet; the question is whether they represent an opportunity to increase sales. This can be a charged discussion that provokes a range of strong opinions. Merchants may see the abandoned carts as representing time wasters, or as money left on the table that they should grab. Consumers either had no intention of buying something and don’t want to be hassled, or they welcome a chance to reengage with a merchant especially if offered a discount.
First of all, what’s going on that potential customers are stopping short of pulling the trigger on their order? Researchers have grouped the primary reasons for abandoned carts into the following categories:
Not all abandoned carts are lost sales. Lots of shoppers are in browsing mode and intend to come back later. They use their cart as a handy place to leave items so they can come back later, avoiding “wish list” features that require a registration. Research by ScanAlert suggests that shoppers may need more time to complete their order; http://www.nmoa.org/articles/dmnews/webwindowshopping.htm 28% of all transactions take more than a day to complete
Unexpected or higher costs. They don’t know the full cost of their order until they load up the cart to calculate the impact of shipping and sales tax.
Turned off by the shopping experience. They want to use a payment or shipping method that is not supported, or have concerns about security or privacy. Maybe the store won’t ship wine to their state!
How do you separate the customer that thought your prices were too high, from the one who doesn’t need a discount, but wants more time? Does the cart allow items to be held for up to 30 days without logging in? If they have concerns about the shopping experience how will you know? How do you reach these customers anyway?
Digging into the data on the retailer websites that Bevsites host we can share some insights that will explain what we consider the smartest strategy for tackling this issue. First if your shopper loads up the cart to calculate shipping and tax, and then disappears; you don’t have an email to communicate with them. As it turns out, for the retailer sites we tested most consumers abandoned the cart before logging in; only 4.5% of the total dropped carts were logged in. So for a website which does $1.5M per year, there was 1 customer every 2 days that could be emailed about their abandoned cart. Making assumptions about average sale and a generous conversion rate on the email we think this could increase sales by up to 1%. Nothing to be sniffed at, but we think there is a bigger opportunity here.
The other 95% of customers with abandoned carts can be reached using a service called remarketing; where a targeted ad is placed on a different website based on customers’ behavior on your own website. Examples of common sites that have remarketing programs are Google and Facebook, and you don’t need to have an email address to reach these customers. Remarketing works by setting a cookie on the shopper’s browser so the next time they visit a search engine or watch a video of frolicking cats you have the opportunity to remind them to revisit your website.
While abandoned carts may represent an opportunity, it bears saying they probably don’t amount to lost sales. Sending emails to shoppers about a dropped cart runs the risk of creeping them out. We prefer the approach of remarketing as a subtle way to place an ad in front of a warm lead that could benefit from some additional brand visibility to increase loyalty.