Like most online retailers, Diapers.com, a leading retailer of baby supplies, understands that effectively reducing shopping cart abandonment is no child’s play. It can mean the difference between profitability and loss for many online retailers which experience, on average, a 70% abandonment rate, according to industry publication estimates.
The number of abandoned shopping carts on retail sites has been steadily increasing, according to the latest MarketLive Performance Index. Conversion rates (the percentage of visitors who bought something) at nearly 100 retail web sites that use the MarketLive eCommerce Suite and Omniture analytics and make up the MarketLive Index fell to 3.93% in the second quarter of this year from 4.41% in Q2 2007 while abandoned carts increased to 60.2% from 59.35%.
From Q1 to Q2, MarketLive reports that conversion rates at retail sites fell slightly from 3.96% and abandoned carts grew from 59.43%.
Additionally, the Index reports an 18.63% increase in traffic but a 20.19% decrease in what MarketLive calls “engagement rates,” which measures the ratio of carts to visits.
The decline in engagement rates, according to MarketLive, may be attributed to three key factors:
●Index sites experienced a 36% increase in traffic coming from search engines as retailers understand and fine tune their search engine optimization and invest more in paid search, says Jay Sullivan, head of Internet strategy at MarketLive. As a result, the quality of traffic has decreased as indicated by the fact that the number of visitors who viewed one page and left increased 10%.
●Consumers are researching more as they become more price-sensitive.
●Retailers are failing to present products effectively and in a compelling fashion.
While customers may abandon shopping carts for a variety of reasons, Diapers.com suspected running after toddlers and juggling multiple tasks with an infant in the house may be key reasons why their online shoppers might get interrupted during the transaction process.
The solution? Make it more convenient for parents and customers to pick up where they left off in the checkout process and complete the order with minimum effort. The online retailer created an automated email campaign using Coremetrics’ LIVEmail and email services from Silverpop to help recapture lost revenue from customers who abandoned their carts.
The email acts as a customer service touch point that reminds shoppers of items left in their cart and provides a convenient link back to that cart for a quick transaction. Items are retained in abandoned carts for two weeks. No enticements such as discounts or sale promotions are part of the “come back” program.
“Because our customers are mostly moms with young children, they lead pretty hectic lives,” said Matt Lindenberg, assistant director of marketing for Diapers.com. “They probably got pulled away from their online shopping to tend to their kids. Our reminder emails show that we noticed their cart additions and remind them to return to Diapers.com to finalize their purchase.”
The email campaign delivered impressive results:
●48% higher open rate than any previous campaign
●78% higher click-through rate than any previous campaign
●6.5% net conversion rate (buyers per email sent), which was 129% higher than for any previous campaign
While the email campaign represented less than 3% of the email volume for the first month in which it ran, it contributed more than 10% of the total revenue from email marketing for that month.
“Once you develop a program like this, it runs automatically and in the background,” Lindenberg explained. “Since abandoned carts were essentially all lost orders, the additional revenue generated is gravy. It’s a useful, upfront investment in time to recoup sales that are just being lost.”
With the success of this campaign, Diapers.com decided to expand the program to allow for expanded information regarding what was left in the cart. Additionally, expanded phases of the program will allow for relevant cross sell and up-sell recommendations to drive even more value from each email delivered.
MarketLive’s Sullivan agreed that to increase customer engagement and reduce abandonment rates, retailers need to be proactive by not only investing in features and functionality but also getting back to the basics. For example, online retailers should optimize internal site search performance and ensure appropriate categorization of their site.
In addition, retailers are encouraged to make their naming conventions user-friendly and to present their products in ways that are helpful to site visitors. “Most create categories around product attributes, such as an apparel retailer using tops or bottoms,” Sullivan said. “But retailers should look at alternative navigation and think of merchandise in other ways that are more compelling from an emotional perspective, such as best sellers, what’s news, outfits and trends. Engage those who don’t know what they want and want you to help them out.”
To submit comments regarding this article or suggestions for articles, contact Nancy Pekala, Marketing Matters Editor, npekala@ama.org.