Shopping Cart Abandonment Rates Continue to Rise

Wow, I can't believe all the money retailers are leaving on the table. As abandoned shopping cart rates continue to rise, e-commerce sites are not stepping up to the plate as aggressively as they could to recapture these lost sales. 

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 Optinmonster, abandonment rates have been on an upward trend since 2008, and are expected to continue to rise into the foreseeable future.  See the chart below.

According to ReadyCloud, some of the top reasons consumers abandon their shopping carts an be seen below (multiple answers allowed):

1. Extra costs = 61%
2. Forced account creation = 35%
3. Complex checkout = 27%
4. Slow website load = 75%
5. High shipping costs =55%

So given these reasons, what is a retailer to do?  Just sit back, wait, and hope the consumer returns?  Well I would hope not. 

Based on a study by Moosend roughly 10% of those consumers that receive a follow up email regarding their abandon cart will ultimately purchase.  So 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)

In fact the optimal timing of a follow up email is within 24 hours according to many experts including SmartrMail.

As Nike says, just do it!

Perry Drake, PhD

The Purchase Funnel, Then and Now

The purchase funnel was first developed in 1898 by E. St. Elmo Lewis as a theoretical customer journey from the first point of contact with a brand to the final purchase decision.  As consumers traverse through the funnel the numbers lessen.  This is due to the fact that of all who first become aware of the brand, relatively few actually convert.  Understanding how changes in our marketing strategies at each of these steps impacts the bottom line is key to the success of any business.   Pre web and social media or post, the basics are still the same.

As shown in Figure 1 below, the marketing purchase funnel has been comprised of four main components over the years:  Awareness, Interest, Desire and Action.  This is known as AIDA.  What has mostly influenced the decisions at each stage were brand initiated and included such things as in store demos, TV and print ads, FSI's, coupons and billboards.

 Figure 1:  Purchase Funnel Pre Social Media

Due to the introduction of the web, search engines and social media, the definition of each are changing as is the relationship of each of these to one another.  However, the basic funnel concept still works.  Let’s discuss each of these concepts further in today’s world.

Awareness in today’s world has totally changed due to Social Media.  No longer are we made aware by simple push messages.  Brands are pulling us in and telling us what they have to offer.  And in some cases it is not even the brand that is directly making us aware of a product but rather our friends who are sharing their experiences with us on social media sites.

How a brand keeps our interest is also totally different thanks to retargeting of online ads or tailored web experiences due to cookie drops.

Once we have gained product awareness and shown sustained interest, a brand has many more options today to move us further along that path in order to increase our desire to buy.  Years ago we would have to call to request a sample or go into an automobile showroom to talk pricing.  Today those are no longer the only options available.

And then of course there is the purchase action.  Money is still needed for this to take place, but what has changed is how we can share our purchase experiences (good or bad) with our friends and family.  We can become advocates and make others aware of the product on behalf of the brand.

The new funnel is being depicted in many forms by various companies like Forrester Research as shown below in Figure 3. 

Figure 3:  New Model by Forrester Research

What this figure shows nicely is the “disruption” being caused in the purchase cycle by the abundance of information we can now gather at every step of the purchase process.

  

But at a high level the “funnel” concept still works.  It shows nicely how as consumers move along that journey their numbers lessen.  

Keep in mind, the funnel never was meant to depict a linear path.  What is vastly different today are the experiences or options we have at each of those steps from a marketers and consumers perspective.   What the funnel looks like today is as shown in Figure 3 below.  As you can see there are now many more things affecting the purchase decision.

Figure 3:  The New Purchase Funnel Post Social Media

The biggest difference in today’s world is advocacy.  Brands need advocates for their products.  They need to create them, find them and foster a good relationship with them.  Why?  Because they who the consumer turns to in order to gain information prior any purchase consideration.  Based on a recent Nielsen report, 92% of people trust brand advocates.  Remember, as said prior, control has shifted to the consumer in so many regards.  This makes brands a bit nervous.  Understanding that shift, as Sephora has done, and capitalizing on it will ensure a strong customer base full of advocates for your brand or offering for years to come.

Here is another thought on the new conversion funnel that I like:  https://curatti.com/a-new-marketing-funnel-is-taking-over/

I would love to hear your comments.

Perry D. Drake

Professor of Social and Digital Media

University of Missouri - St. Louis

Why Don't My Double Click Impressions Match My Google Analytics Numbers?

I get asked this question all the time. Not to worry, there is an easy explanation and a fix.

Here is the main reason.  DoubleClick is reporting impressions served or delivered to ad tags.  Analytics packages like Google Analytics of Adobe SiteCatalyst are counting the execution of page tracking code.

If your Google Analytics tracking code is at the bottom of your web page and placed right above the closing of the body section (see Figure 1 below) then you are definitely at risk for reporting discrepancies.  And, the bigger and heavier the page the more at risk you are. 

Figure 1:  Google Analytics code placed at bottom of web page HTML code.

Why is this an issue?  Because a person who clicks on your DoubleClick ad and bounces quickly will in all likelihood never trigger the Google Analytics or Adobe SiteCatalyst tracking code lying at the bottom of your page code.

And if you think about it, people will bounce more and more quickly on ads versus search results.  Right?

So, what is the solution?

One simple solution is to place your Google Analytics tracking code near the top of the page to minimize the risk.  Simple fix.

And, in fact, when you create a Google Analytics account today, Google tells you to place the code at the top of the page right before closing our the header section.  That is not what they used to tell us.   Hence that is why when viewing the source code for most websites you will see the tracking code at the bottom.

So, if you want to minimize the risk of your ad server impressions not matching your Google Analytics or Adobe SiteCatalyst figures, just move the code to the top of the page.  It will not remove the risk completely but will come close.

Here are two other articles on the same topic that also shed more light on this topic.

• https://www.tatvic.com/blog/discrepancy-between-doubleclick-for-publishers-and-google-analytics-360-data/
• http://hashtag-labs.com/doesnt-google-analytics-match-doubleclick

Good Luck!
Perry

Why Did Hashtags Disappear from the 2019 Super Bowl Ads?

 

Every year for the past 6 years I have had my digital marketing students at the University of Missouri – St. Louis do an assessment of the Super Bowl ads regarding their use of hashtags, social media icons and URL’s to help drive conversation.  This year, my students and I were shocked to see virtually no advertiser using hashtags.

Peak usage of hashtags in Super Bowl ads was 57% in 2014 according to Marketingland.  Since that year, it has been in decline every year.  In 2015, 2016, 2017 usage of hashtags in Super Bowl ads were 50%, 45% and 30% respectively based on another report by Marketingland.

So why has hashtag usage in Super Bowl ads slipped to virtually none in 2019?  Are they just not effective any longer?  To prove or disprove this point I decided to examine brand mentions for the top five brands from 2018 and compare that to the top five brands from 2019.

For 2018, we can see in the graphic below, Avocados from Mexico had the most mentions during the superbowl at 137,000, followed by Pepsi at 38,000 according to Salesforce.  And, all five of the top brands used hashtags within their ads.  In addition, we should keep in mind this is not really reflective of the true reach which could easily be in the millions for some brands depending on the influence and reach of those that used the hashtags within their posts.

2018 Social Media Mentions, Top 5 Brands (Salesforce.com)

For 2019, virtually no brands used hashtags within their ads.  They all had campaign hashtags in play, but were only using them in their social media posts.  The top five most mentioned brands on social media during the Super Bowl according to Salesforce are shown below.  None of the top five used hashtags upon my examination of their ads. And, as a result we can definitely see much fewer mentions than the prior year.   

2019 Social Media Mentions, Top 5 Brands (Salesforce.com)

This year the most mentioned brand was Bud Light at only 31,500 in comparison to the top brand in 2018 (Avocados from Mexico) at 137,000 mentions.  A significant difference to say the least.

My students this semester thought that the Pepsi "More than OK" campaign was one of the best executed across the digital channels but felt they missed out on additional reach and exposure by not having the "morethanok" hashtag appear on the TV ad. They also felt that Pepsi missed out by not driving those not familiar with their abundance of fun social media content to their social media channels.

They also felt the Doritos "NowItsHot" campaign was a hit given how they ensured a large audience by mashing up Chance the Rapper with the Backstreet Boys.  This is a great way to grab the attention of the broadest audience possible across generations.  But they thought the hashtag strategy was a bit weak. Engagement could have been centered around how we eat the Flamin' Hot Nacho flavor or asking us if we prefer hot or regular.

So why did almost every advertiser not use a hashtag in 2019?  Why would you not toss your campaign hashtag (or a new one) at the end of your ad?  Why would you not want to drive significant conversation around your brand at a time when it will be seen by 103 millions viewers?   The benefit of a hashtag is to help evoke conversation and extend your voice around an event, cause, emotion and in that moment. Why would you not want to do extend your reach?  It seems crazy to me! 

So what happened?  Given recent marketing missteps by various brands like Dove and H&M and others were advertisers afraid this year of making a misstep themselves in front of such a big audience.  Were they all just playing it safe?  Did they lack the resources to monitor the conversation?   I am anxious to see what 2020 brings us, or should I say doesn't bring us.