We’ve all had the experience of navigating our way through an online purchase, only to stop short of making the purchase. Any number of issues may have prevented us from consummating the deal – the price, site usability issues, annoyance with having to register or log-in, pre-purchase buyer’s remorse, the need for a more direct or personal buying experience, external interruptions, or maybe we were just window shopping.
In any case, shopping cart abandonment is on the rise, according to new research from Business Intelligence, which says $4 trillion (with a T!) worth of merchandise will be abandoned in online shopping carts this year.
NB: This is a viewpoint from Dave O'Flanagan, chief executive of Boxever.
There are a variety of factors leading to the increase in shopping cart abandonment (by some reports, rising from 69% of all online carts being abandoned in 2011 to 74% in 2013). These include the proliferation of mobile and multi-screen shoppers, whereby users have easy access to a site but may not prefer to actually buy through their smartphone or tablet (only 34% of smartphone users say they used their phone to complete a purchase, according to Digitas).
There is also a general shift to more casual shopping behavior as websites and shopping carts become easier and easier to find and use.
The good news? BI claims 63% of all that abandoned revenue value is potentially recoverable if online retailers take the right steps to target those shoppers who have drifted away for whatever reason.
While BI’s number represent the entire universe of online retailing, Boxever can confirm that shopping cart abandonment is both a problem and an opportunity for the travel sector. Our work with airlines and OTAs shows that by using real-time intelligence and one-to-one personalized marketing, travel companies can recover a meaningful percentage of ‘lost’ shoppers and convert them into sales.
When considering an investment in recovering this potential revenue, it is important to remember that an abandoned shopping cart doesn't necessarily mean the shopper is no longer a prospect. In fact, research from conversion specialists SeeWhy says that 75% of lost shoppers actually plan to return to that retailer to make a purchase.
They may not return to the site – travel shoppers in particularly are well known to be online shoppers but offline buyers – but it is critical that retailers proactively retarget these customers quickly and in a personalized manner to maximize the sales opportunity.
Most experts agree that targeted email is the best tactic to recover lost shoppers. Boxever’s big data analytics platform is being used for automatic triggering of email to people who have left a supplier’s web site, a practice that in one case directly resulted in 4% uplift in incremental revenues - on one web property, in one geography.
This resulted in almost $1 million in additional bookings each week, for that property in that geography alone. Multiply that across destinations and across multiple brands and the possibilities for additional revenue are staggering.
Retailers in other industries have seen eye-opening open rates of up to 40% and 20% click-through rates from emails sent within three hours after a consumer abandons a cart. The same research reveals that click-through rates then drop by half the day after someone abandons a cart, and a third email on day three will get a mere 5% click-through rate.
A key to optimizing conversion rates of abandoned shoppers is to understand which prospects are indeed strong potential buyers, and which are just window shoppers. In other words, how much of the abandoned shopping cart value is actually recoverable – and how do you target those most likely to purchase.
A robust behavioral analytics system could look at analyze previous web site visits, for example, and determine how active the user might be at the point of abandonment (e.g., if they usually start researching 5 weeks before and abandon a cart 3 times before shopping, and this is their second abandoned cart for this particular time frame, etc).
For the savvy retailer, just the data alone from abandoned shopping carts is like gold, providing insights on consumer preferences and tastes. If a consumer goes through the effort of placing an item in a shopping cart, we can deduct many things about their potential interest and receptivity to future information and offers.
The key is to mine that data and use it to drive actionable programs and measurable results.
The bottom line is that even small gains in conversions of lost shoppers can have major impact on revenues for travel suppliers who make the time and investment to pursue this segment. As the BI report concludes: “The data shows that there's enough money at stake, and enough of a success rate to suggest a worthwhile ROI.”
NB: This is a viewpoint from Dave O'Flanagan, chief executive of Boxever.
NB2: Shopping trolley image via Shutterstock.