It’s the greatest mystery of online retail – why do consumers abandon those baskets and what, if anything, can retailers do about it? Were they just browsing, or did something put them off completing the transaction? If retailers can solve this conundrum, they can turn near-misses into sales.
It’s certainly a worthwhile exercise. Suppose you’re selling kids’ bikes for $80 and you process 20 orders per day – that’s around 7300 orders per year. If you manage to recover just 5% more transactions that you do at present, that’s 365 more sales per year and over 29k in additional revenue. And as there’s a chance at least some of these customers will buy from you again in future, those numbers are potentially higher than this.
It’s also likely to be more cost-effective for you to convert these near-misses into customers than it would be to acquire 365 more sales from ‘cold’ leads. By the time your audience gets as far as placing things in their online shopping basket, you’ve already spent your marketing budget on acquiring them.
The fact they’ve got as far as they have done means they know you exist, they’re engaged enough to put items in a basket and already in a state of high-consideration. They’re as warm as customers can be without actually finalizing a purchase.
Consider running the numbers based on your own sales figures. It’s likely that any additional effort you put into converting even a low percentage of these near-misses into sales is likely to have a greater ROI than other acquisitional marketing activities.
Rising abandonment rates?
AdRoll claims that a mere 2% of shoppers will convert on their first visit to an online store. A 6-year poll by the Baymard Institute suggests that basket abandonment rates may be on the rise. Their data from 2012 suggested average basket abandonment rates were lower than they are today.
In 2018, the average abandonment rate was over 75%, with one poll putting it at over 81%. Those are alarming statistics. Why are customers failing to convert in higher numbers than ever before?
One answer could be that customers are putting things in their basket as part of their research process. Some online retailers continue to make the mistake of hiding shipping costs until customers reach the later stages of the shopping process.
It’s also possible that customers are putting items in baskets while they continue to browse other sites to find the best deal. It’s even possible that savvy customers are using basket abandonment as a negotiation tactic – knowing that retailers may try to lure them back with discount offers later on.
The Baymard Institute’s research asked US adults why they abandoned their baskets. Key findings were that the additional costs associated with the purchase were too high for them, or that they didn’t want to create an account in order to buy.
Some of these are avoidable. Allowing customers to checkout as a guest can help reduce basket abandonment rates and all customers love free and fast shipping. Customers also said they’d abandon a purchase if the process was too long or complex. Around a fifth of customers said it was a website error that made them abandon the process.
There are two main ways to convert customers back again once they’ve left their full baskets behind. One of these is retargeting via display ads around the web and another is by enacting a winning email sequence that will lure them back. It’s advisable to implement both tactics to try to capture attention across all available channels.
Retargeting can be a hugely successful way to convert ‘nearly there’ customers. Retargeting vendor Criteo claims that visitors to a website who are later retargeted are 70% more likely to be converted than those that don’t see retargeting ads. Users are more likely to notice retargeting ads and the click-through rate is much higher than other types of display ads.
You can start retargeting customers by installing tracking code on your site. Start by creating a Google Adwords or Facebook Business Manager account and follow the steps from there to add to your site’s header or body tag.
Crafting a compelling email sequence
It’s generally a good idea to send a series of emails out to customers that have abandoned baskets. You’ll need to put some work into crafting the right email subject lines, calls to action and compelling copy. As a general rule, a sequence of three emails is the right number.
You want to start by sending the first email immediately; the minute the customer leaves your site. This should be a short email to jog their memory and the content should include a list of the abandoned products, ideally including pictures of them. Keep it short and simple and include a link back to your site.
The next day, at a very similar time to when the visitor was on your site in the first place, they should receive a second email from you. In this email, you can consider making a tempting offer, such as a discount, if they return and complete the purchase. Make sure to include this offer in the subject line of your email.
And finally, they should receive a third email from you a week later – again, at the same time of day they initially visited you. This time your emotional draw should be that you’re making a time-sensitive offer and the customer has a limited amount of time to complete their purchase, or highlight the scarcity of what you’re offering. A customer that hasn’t decided whether to buy yet may be tempted by a time-sensitive offer or a ‘last chance’ to buy.
Retargeting email sequences require a lot of copywriting skill, particularly when it comes to the subject line. Make sure you front-load your subject line, as your recipient will probably read them on mobile and only the first few words will show. Make sure the CTA (such as ‘click to buy’) is really prominent in your email.
Although this is the formula that generally works for most types of retailer, you will need to experiment to find your ideal combination of emails. If you’re offering a high-consideration purchase, you may need to offer a longer sequence.
If you find your unsubscribe rate is high, then you may want to reduce the number you’re sending to each customer. You’ll need to explore what’s best for your business but this approach is the best starting point for any testing you do.