Winning sales from abandoned carts, 3: Email best practices

In the past couple of posts, we’ve looked at how techniques on the eCommerce site and retargeting advertisements can recover sales from visitors who’ve abandoned their shopping carts — a potentially lucrative audience that includes 88% of U.S. consumers, according to industry researcher Forrester.

But the most commonly-known technique for reconnecting with cart abandoners is via email — with merchants sending follow-up reminders to shoppers to entice them back to the site and complete their purchases. Although well understood, this tactic still isn’t widely-used: a recent study by email services firm Listrak found that just 18.5% of merchants in the Internet Retailer 500 — that’s less than 1 in 5 — use email to reengage with cart abandoners. The number is even lower for merchants in Internet Retailer’s Second 500 ranking of smaller merchants, Listrak found — just 10.7%.

For merchants who do deploy cart-abandonment recovery campaigns, the payoff can be significant. Food purveyor SmileyCookie.com reported recapturing 29% of abandoned carts — nearly 1 in 3 — with a targeted series of three emails. And remarketing services company SeeWhy found that abandonment email campaigns recover more than 20% of sales on average, and generate a whopping $17.90 per email sent — much higher than typical non-targeted email promotions.

With results like that, merchants should make deploying cart recovery emails a top priority for 2012. To implement effective an effective program, consider these tactics:

Collect email addresses early, but avoid forced account creation.
In order to send cart abandoners a targeted email enticing them back to the site, merchants need to have captured their email addresses in the first place. Increasingly, merchants are attempting to collect addresses via forced account creation — but with 14% of shoppers reporting that a lack of guest checkout drove them to abandon carts in the first place, according to Forrester,  we don’t recommend resorting to such extremes. Instead, use subtler methods to capture this information:

  • Link abandoned carts to email subscribers. Use behavioral tracking technology to flag when a shopper who’s signed up for email updates, then goes on to abandon a shopping cart.
  • Ask for an email address in the very first step of checkout, and explain why. Collect an email address on the initial checkout screen, and clearly state it will be used to contact shoppers if there is a question about their order. Include links to privacy information to boost trust, as Walmart does on the first step of guest checkout.

Email collection example from Walmart

Send a reminder immediately, then follow up.
Fully 54% of cart abandoners who intend to buy will do so in the first 24 hours after leaving the site, SeeWhy found. Another 10% will act within 48 hours; within a week, 82% of those who intend to buy will have pulled the trigger. With the gains after the first 24 hours being incremental, it’s crucial to trigger follow-up emails promptly — sending the first within an hour or two of cart abandonment and the second within a day.

In the case study cited above, SmileyCookie.com sent its first email within 30 minutes of abandonment; the second 23 hours later; and the final message four days later. The first email garnered the highest open and click-through rates.

Message content: don’t default to a discount …
When sending shoppers abandonment email offers, the temptation is strong to offer a discount, such as free shipping, to help close the sale. But such immediate payoffs can “train” shoppers to abandon carts in anticipation of a discount. Instead, experiment with the following messaging:

  • Stress service and convenience. With 11% of cart abandoners reporting they found the checkout process confusing and 10% saying they didn’t have enough information to complete their purchases, offering customer service assistance is a smart strategy to win sales.
    • Phrasing such as “can we help you complete your order?” puts the emphasis on service.
    • Include email, phone and live chat options as available.
    • Spotlight available alternative payment methods such as Paypal, which can save time in checkout.

Sears sends abandoners a service-oriented message that displays how shoppers can “buy your way” (via phone or using a personal online shopper), “pay your way” (using alternative payments), and “deliver your way” (with site-to-store and home delivery options) — thereby addressing a series of potential checkout stumbling blocks.

Abandonment follow-up email from Sears

  • Give shoppers product alternatives. Many cart abandoners are “window shopping” by adding items to the cart, without necessarily being enamored enough of the chosen product to commit: Forrester found that 24% of abandoners added items to the cart just to be able to consider them later, and 41% weren’t ready to purchase. So give these ambivalent shoppers a sampling of alternative products that might better suit their needs, as Urban Outfitters does in the message below, showing not only the abandoned item but others “you may also like.”

Abandonment follow-up email from Urban Outfitters

… but do clearly reiterate standard promotions.
If you normally offer free shipping above a threshold, or free site-to-store delivery, do spotlight these policies in your abandonment messaging; cart abandoners may have missed such offers while shopping the eCommerce site, and a prominent reminder of potential savings can trigger them to return and commit to buy.

In the examples above, Sears highlights the availability of free site-to-store delivery, while Urban Outfitters reminds cart abandoners that shipping is free with a purchase of $150 or more. Neither merchant is creating a new discount to lure abandoners back — merely restating sitewide policies the recipients may have forgotten since leaving the site.

For more examples of abandonment emails, view Listrak’s Abandonment Look Book. What messaging and timing strategies have worked for your brand to recapture abandoned carts?

Winning sales from abandoned carts, 2: Retargeting

As discussed in the prior blog post, there’s huge sales potential in the pool of shoppers — 88% of all U.S. online consumers — who report having abandoned an online shopping cart without completing a purchase. While most merchants have been reluctant to pursue cart abandoners so far, the ongoing need to target marketing for maximum results means that 2012 may see renewed focus on this audience segment — and the good news is that the latest marketing tools make it easier than ever to reconnect with shoppers and serve them irresistible offers.

One of the most powerful such tools is retargeting, also called remarketing. Broadly, retargeting refers to techniques for reminding shoppers about products they’ve already viewed on your site. The term can be applied to email campaigns, but more commonly retargeting refers to Web site display advertisements that deliver messages attuned to sites shoppers have recently visited.

Adroll and Google — whose display ad offering spawned the term “remarketing” — are only two players in an increasngly crowded field of vendors offering behavioral retargeting services. Most of these services rely on a cookie that tracks shopper activity on the merchant’s site; merchants define which actions shoppers can take that put them in the target pool for later advertising on other sites. For example, shoppers who visit an outdoor outfitter’s winter sports category may later see retargeting ads featuring the merchant’s top-selling skis.

Retargeting tops the list of advertising techniques in terms of boosting awareness, according to a recent study conducted by online measurement firm comScore and marketing service provider ValueClick Media. The study tracked how much search activity was generated for a brand using a number of targeted display advertising techniques, and found that remarketing produced a lift of over 1000%.

Statistics on retargeting from comScore

Retargeting can be used for all kinds of campaigns — but it’s particularly apt for capturing cart abandoners. Not only do retargeting ads remind shoppers of products, but merchants have an opportunity to use the ad creative space for additional persuasive content.

But retargeting cart abandoners isn’t quite as simple as simply displaying the product they left behind. Researchers at MIT found that less specific information can sometimes be more effective, depending on how close to purchase the shopper really was.

This finding goes hand in hand with research on abandonment behavior, which has found that many shoppers use the cart for research and abandon because they simply aren’t ready to commit. For example, industry researcher Forrester found that 41% of cart abandoners weren’t ready to buy, 27% intended to research prices on other sites, and 24% merely added items to the cart for reference later.

The upshot? Merchants need to strike a balance with their retargeting campaigns to cart abandoners, strengthening the overall brand message without overly limiting the product selection on display. To craft an effective retargeting message, consider these techniques:

“Customers like you liked these items.” Consider showing cart abandoners the product they considered — along with other items shoppers who viewed the same product ended up buying. This technique broadens the range of products on display without resorting to a generic ad. Zappo’s employs this technique for its remarketing campaigns. In the ad below, the featured shoes are products other shoppers who viewed the abandoned cart item went on to buy. The three offerings are at different price points, giving the ad viewer further options according to their budget.

Retargeting example from Zappos

Spotlight service for shoppers who tripped up in checkout.  The potential for specificity in retargeting means you can serve ads only to shoppers who initiated checkout but didn’t complete orders. For those would-be buyers, consider a branding campaign that puts an emphasis on customer service and price and product guarantees, and prominently features customer service contact information.

Discounts: proceed with caution. While retargeting ads can seem random enough to shoppers to make “gaming the system” unlikely, don’t automatically offer a discount just because someone added an item to the cart. Instead, use discounts wisely by focusing ad delivery to repeat visitors or cart abandoners whose potential order size is above a particular threshold. But while you should target the ad specifically, the offer itself can be broad, such as the 15% order discount offered by MarketLive merchant Design Toscano. Such offers motivates cart abandoners to return to the site, even if they decide they don’t want the specific items they originally left behind.

Retargeting example from Design Toscano

Are you using display ad retargeting to recapture abandoned cart orders? How effective has retargeting been for your business?

Winning sales from abandoned carts: on-site techniques

For all the progress online merchants have made in recent years winning new customers and growing revenue, one metric refuses to budge: cart abandonment.

According to industry researcher Forrester, in 2010 fully 88% of shoppers reported abandoning a shopping cart without completing the transaction — the same percentage as in 2005. And quarterly MarketLive Performance Index data for the past two years shows that progress on cart abandonment is mixed, with merchants seeing improvements of less than 5% year-over-year, depending on the quarter, and never dipping below 50%. In the first quarter, year-over-year abandonment has actually risen — suggesting that seasonal deal-hunting will make the next few months particularly challenging for merchants combating abandoned carts.

MarketLive Index data on cart abandonment

These shoppers are potentially low-hanging fruit: after all, they’ve already found their way to your site, and they’re interested enough in products to place them in the cart in the first place. In some cases, they’ve even started the checkout process before stalling out or leaving the site.

Merchants have been slow to pursue these almost-customers. Fewer than 20% of Internet Retailer’s Top 1,000 merchants pursue cart abandoners with email campaigns, email service provider Listrak found, while Forrester found that just 7% of merchants use remarketing, also known as retargeting — a genre of display advertsing that targets shoppers as they browse elsewhere with reminders about the products they viewed on your site.

But with the continued focus on effective use of tight marketing budgets, 2012 may be the year when abandoned carts get serious attention. And the good news is that merchants have a number of tools they can use to win back cart abandoners — not just email.

For starts, there’s plenty merchants can do while shoppers are still on-site to help them  return to the path to purchase. Consider the following tactics:

Use dynamic messaging to promote free shipping qualification thresholds. Shipping costs remain the number one barrier to order completion, Forrester found, with 44% of consumers saying they abandoned their carts because shipping costs were too high and another 27% saying shipping costs were revealed too late in the checkout process.

Not only should shipping costs be accessible in the cart — and even on the product page — but merchants should take a further step and message shipping promotions prominently as shoppers add items. Amazon.com calculates how much more shoppers need to add to qualify for free shipping and messages the amount in the cart.

Dynamic free shipping message on Amazon

Even if you can’t dynamically promote the amount needed to qualify for free shipping, position shipping messages so shoppers can’t miss them, regardless of how they deviate from the path to purchase. Just a few places to flag shipping promotions

  • On product pages
  • In the drop-down display of the global shopping cart, as Macy’s does with its banner featuring a promotional code

Free shipping promotion in the global cart from Macys

  • In global banners at the top of the center content area
  • In the shopping cart
  • At the beginning of checkout

Assuage privacy fears. Forrester found that 12% of shoppers abandoned carts because sites asked for too much information, while 14% balked at setting up an account with a password in order to be able to purchase. As discussed previously, we don’t recommend forced account creation in most cases; but merchants should go further to ensure shoppers don’t abandon purchases because of privacy concerns.

  • Examine analytics for checkout pages to determine where shoppers drop out. Identify the roadblocks and then alter those checkout steps to improve the flow.
  • Message privacy and security prominently throughout. Include certification badges from third-party providers and links to the site’s privacy policy, along with reassuring customer service information such as product guarantees.
  • Offer alternative payments. Services such as PayPal or Bill Me Later are widespread, with nearly 60% of merchants in Internet Retailer’s Top 500 offering at least one type of alternative payment. These services are not only quick, but enable shoppers to skip entering credit card information on individual merchant sites — thereby boosting confidence that their data will remain secure.

Trigger proactive live chat to re-engage stalled shoppers. Fully 57% of consumers said they’re likely to abandon their purchases if they don’t find quick answers to product questions, and 44% said the ability to get live help while browsing a site is crucial, according to Forrester. Merchants can address these needs at crucial points on the path to purchase using proactive chat sessions, where a chat window opens and invites potential customers to ask questions. Dell triggers a proactive chat window if shoppers perusing laptop options become inactive on a page during the configuration process.

Proactive chat example from Dell

 

The trick is to exercise discretion. Forrester found that despite the desire for instant answers and live help, 71% of consumers also said they prefer to initiate live chat help on their own. Start conservatively by triggering proactive chat if shoppers

  • stall for a specified length of time on a product page or the shopping cart page
  • begin checkout but then either stall or backtrack to another part of the site
  • browse customer service pages for a specified length of time

For more chat best practices, see the post “Three Key Live Chat Strategies.”

Consider dynamic personalization to serve targeted offers. Services that empower merchants to target shoppers using past purchase history in combination with site behavior can be powerful allies in the fight against abandonment. Some services can even tailor site offers based on shoppers’ current browsing session — enabling merchants to target top loyal customers who hesitate during checkout with a free shipping offer in real time, or to offer a price guarantee to first-time buyers who’ve stalled on a particular product page.

In coming posts, we’ll examine strategies for combating cart abandonment once shoppers have left the site — but meantime, what tactics are you using to win cart abandoners?

Trend to watch: Alternative payments

On a recent tour of checkout processes, it seemed like more merchants than ever were offering multiple forms of payment — that is, not only could shoppers pay by entering credit card information, but they could also opt to use alternative payment systems such as PayPal or Google Checkout.

Chart about alternative payment methods from the MarketLive blogOur hunch was confirmed when we crunched numbers from the Internet Retailer 500 database of leading merchants. It turns out that nearly 60% of merchants on the list offer some form of alternative payment, as measured by usage of leading services Paypal, Google Checkout, Bill Me Later and eBillMe.

Data from industry researcher Forrester further substantiates this finding, with 41% of merchants reporting as of June 2011 that alternative payments were a priority, and 32% reporting the feature was effective — beating out other initiatives such as single-page checkout.

Chart on alternative payments from the MarketLive BlogNot only do the majority of IR 500 merchants offer alternative payments, but most of those who do so — 53.9% — offer more than one such service, giving shoppers maximum flexibility when completing transactions.

According to the IR 500 data, Paypal continues to reign supreme, with more than 85% of alternative-payment merchants using the service — more than half of the IR 500 list overall. BillMeLater and Google Checkout run a distant second and third, with 43.62% and 35.57% of alternative-payment merchants using them, respectively — still more than one in five of all merchants in the IR 500.  And relative newcomer eBillMe, which links directly to shoppers’ bank accounts, is used by 17.45% of alternative-payment merchants, or one in 10 IR 500 merchants overall.

Chart about alternative payments from the MarketLive Blog

Merchants have incorporated alternative payments to such an extent because customer demand is strong. In 2009, when Forrester last surveyed alternative payment usage, 70% of online U.S. consumers reported active use of an alternative payment service. According to Forrester, top reasons for using alternative payments included:

  • Security – The ability to make purchases by entering just a username and password, rather than credit card information,  helps build shoppers’ confidence that the transaction is secure.
  • Convenience – Rather than re-entering credit card data at multiple sites, shoppers reported saving time by using alternative payment services instead.
  • Benefits – Alternative payment services offer many of the same features as credit cards, such as fraud and damage protection.

We’ll be on the lookout for how alternative payment methods fared during the 2011 holiday season, and in future posts we’ll share best practices for deployment. Meantime, merchants that haven’t yet implemented alternative payments would do well to add them to the 2012 priority list.

Do you use alternative payments? If not, are you considering deploying them for 2012? Why or why not?

Social media watch: Pinterest

Saying there’s a new social networking site of note is likely to prompt some eye-rolling. After all, social sites come and go — Friendster, anyone? — and merchants are rightfully wary of investing time and resources in establishing a social outpost that may not endure.

But since launching in May, momentum has genuinely built behind Pinterest — and merchants may be surprised to discover their products are already featured there.

Pinterest is loosely based on the concept of a bulletin board. Users “pin” item images to themed “pinboards” they create, reflecting their own interests and personalities. Users can like and comment on others’ “pins” (meaning pinned items) and follow other users and/or individual pinboards.

Sample Pinterest individual profile

Perhaps because of the emphasis on alluring visuals (as opposed to Twitter and Facebook’s streams of textual status updates) Pinterest’s following has exploded. As of November, Pinterest had grown 2,000% since June, and attracted more page views than the craft-and-artisan marketplace Etsy.com, according to TechCrunch. And the site has attracted $37 million in funding, according to Bloomberg BusinessWeek — suggesting it has staying power beyond next month.

Boards can be highly conceptual — “the written word” or “the color pink” — and they can feature destinations, individuals, recipes, and anything else represented online with photos. But most often, Pinterest boards function as intensely personalized product collections, with millions of items “pinned” using the site’s bookmarking tool. Pinterest users can pin any product, whether or not merchants are Pinterest members — just as consumers can post links from any Web site to their blog or Facebook pages.

And that’s where merchants come in. Particularly for sellers of visually-appealing items such as fashion and home goods, taking a proactive role in the community is a good idea. For example, when apparel manufacturer Lands’ End discovered that scads of products from its Canvas line had already been pinned, the brand established a Pinterest page and launched a week-long “Pin It to Win It” contest during the peak holiday season that gave creators of pinboards featuring Canvas products a chance to win one of 10 $250 gift cards.

The benefits of such an outreach effort include:

  • Inbound links. With Pinterest images linking directly to product pages on your site, you gain relevant inbound links that bolster SEO.
  • User participation. Pinboards can be set up to accept contributions from other users — which means brands can set up pinboards and solicit additions from followers.
  • Customer insights. How do followers perceive your products and classify them? How do they group your products with items from other brands? Exploring how users are pinning your items can help shape positioning and promotion.
  • Collection selling. Last but not least, you can use pinboards to promote new combinations of your products that encourage shoppers to buy. Pinterest’s “Pin Etiquette” prohibits pure self-promotion that flouts the spirit of the site – but at the same time, the site does allow inclusion of prices and other commerce-friendly content. The best way to stay appropriate is, of course, to spend time on the site and experiment with it before launching a campaign.

Advanced Microdevices’ Pinterest page strikes the right balance, showcasing products in pinboards such as “Holiday Lookbook 2011” but also including playful collections such as Christmas images and “Touch My Bottom” – cold-weather photos meant to promote its laptops’ cooler processing units.

Example of a brand using Pinterest - AMD

Other brands on Pinterest include:
West Elm
Williams-Sonoma
Nordstrom
Whole Foods

Are you using Pinterest? If so, what other brands have you spotted there?

QR codes are everywhere, but are they right for you?

During the holiday season, QR codes seemed to be everywhere, from store shelves to print and even online media marketing campaigns. And in theory, it’s easy to see why: the square two-dimensional bar codes can be scanned using smartphone apps, enabling on-the-spot access to specific online information about products or brands.

But despite their ubiquity, usage of QR codes and other 2D bar codes lags behind the proliferation of technologies available to create them. According to industry researcher Forrester, usage of 2D bar codes has quadrupled in the past year, but still only represents 5% of mobile phone owners overall. Even among smartphone owners, just 15% have scanned 2D bar codes, Forrester found.

Chart from Forrester Research showing QR codes

So while it’s tempting for merchants to jump on the QR bandwagon — they sure look cool, don’t they? — it’s imperative to fit QR code promotions into a larger mobile strategy that’s tailored to your brands audience. We’ll take a comprehensive look at mobile trends  for 2012 after the New Year; meantime, when weighing whether to add QR promotions to the first-quarter to-do list, consider:

  • Your demographics. Not only should your target audience include plenty of smartphone owners, but Forrester also found that 2D barcodes appealed primarily to Gen Y and Gen X consumers — 66% of those who had scanned a 2D barcode were between the ages of 23 and 45. More affluent consumers are likewise more apt to have tried 2D scanning, with 62% earning $70,000 per year or more annually.
  • Your state of mobile readiness, online and off. Most QR codes send shoppers to a landing page, be it in-depth information about a product, or a call to action such as subscribing to email updates. Whatever the target content, it should be optimized for mobile — a piece of advice that ought to go without saying, but in practice bears repeating. Forrester found that about only about half of 2D code targets were mobile-friendly. For example, this print advertisement from a beauty manufacturer links to a video in Flash, which isn’t widely supported on mobile platforms — potentially frustrating readers who were interested enough to scan the code.

Magazine ad featuring a QR codeScreen shot showing Flash error on mobile phone

Even if you plan to use QR codes exclusively in a bricks-and-mortar location where consumers can buy in person, it’s key to provide other product-related functionality — such as the ability to send product information to a friend and share on social networks. It’s also important to train in-store staff to use QR codes so they can assist customers who have questions about the process.

And if you want to use QR codes to boost online purchasing, you should prioritize making your mobile site transaction-enabled if it isn’t already. Add that functionality first before using QR codes to promote products. Otherwise, scanning a QR code may lead shoppers to a dead end.

  • Your product offering. QR codes can boost the convenience factor for consumers shopping for certain products, including:
    • Feature-rich products. Whether shopping for appliances, computers, jewelry  or running watches, consumers are likely to want to access detailed specifications before committing to purchases — making a quick QR code link an ideal way to give them the information they need on the go. Post-purchase, QR codes can quickly connect buyers to detailed product manuals and to customer support resources.
    • Products with built-in replenishment timelines. Merchants selling everything from moisturizer to windshield wiper blades can facilitate reordering by including QR codes on packaging or in email reminders to buyers. The QR codes boost convenience for consumers, who don’t have to remember specific part numbers, the right battery size the gadget needs, or which tint of makeup they originally chose (was it Bronze Glow or Bronze Dawn?).

If you’ve tried them, what QR code promotions have worked for your business?

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