I realize that in part the reason the rates are rising is that consumers are becoming more sophisticated with respect to shopping and comparing prices online. But that is no excuse for an e-commerce sites not to reach back. Just unacceptable.
Lets look at the facts.
First of all according to SeeWhy, abandonment rates have been on the rise since 2009 and are expected to continue to rise into 2012. See the chart below.
According to Forrester, the main reasons consumers abandon their shopping carts are (multiple answers allowed):
- High shipping costs = 44%
- Not ready to purchase = 41%
- Price checking = 27%
- Price to high = 25%
- Wanted to save for later = 24%
Based on a study by Listrak (a major email service provider), only 13% (yes only 13%) of e-commerce sites actually follow up on abandoned shopping carts. Ouch. That is pretty darn low. But at least it is up slightly from 11% in 2009. Think of all the money left on the table for a given e-commerce site...even if they just recapture 10% of that lost revenue.
Lets run a few numbers.
Consider a modest retailer with sales of $500,000 annually and a 70% abandonment rate. What are they leaving on the table? Using the formula below they are leaving $1,166,666 on the table.
[$500K / (1 - .70) ] - $500K
Assuming they convert just 10% of those that abandoned with triggered emails (a realistic number), that yields $116,666 in saved revenue. This would certainly cover the cost of the automation of a trigger based email program. So, there is no excuse.
And, what is more surprising, for those retailers who are reaching out to customers, they are not doing the best job possible. Believe it or not, based on that same study by Listrak, only 25% of the trigger based emails linked back to the abandoned shopping carts and only 34% of the emails were personalized.
So what is an e-commerce site to do? My answer...test, test, test. The cost here is minimal, yet the rewards could be huge.
- Test the approach (soft or hard sell)
- Test the offer (discounts, free shipping)
- Test the timing (wait one or two or three days)
No excuses guys. You will find your optimum! And, if you need help setting up your test and evaluating the results, go to my website www.confidenttest.com for some free tools. I am there to help.
As Nike says, just do it!
For a great presentation on best practice techniques on recovering abandoned shopping carts, check out the report by Silverpop and SeeWhy. Enjoy!