How To Plug The $4 TRILLION Dollar Hole In Your Store
According to Baymard Institute, a web research company in the UK, 67% of online shopping carts are abandoned. In other words, 67 out of every 100 potential customers are leaving your website without purchasing. They’re browsing your website, looking at products, adding products to their cart, and even going to the checkout page because they intend to purchase.
But 67% of them leave at the last minute.
Based on these numbers, a small store with $2 million in annual sales is losing more than $4 million every year to cart abandonment.
It’s no surprise that Business Insider estimates online retailers lost as much as $4 trillion to cart abandonment last year.
Listen to this episode and discover how to plug the $4 trillion dollar cart abandonment hole in your store.
In this episode, you’ll discover:
- the 14 main reasons why people abandon their shopping carts
- why 1-email cart abandonment campaigns are ineffective
- a 3-email cart abandonment campaign that works wonders
- why offering discounts is like chasing your customers down the road yelling out “5% off!”, “10% off!”, “15% off!”, like a needy shopkeeper
- how a $2 million dollar store could increase sales by as much as $527,878 with a cart abandonment email recovery campaign
People on this episode:
Mentioned in this interview/episode:
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Cart Abandonment Examples
Welcome to ReEngager Podcast for online retailers and e-commerce stores. You’re about to discover how to increase sales by 15 to 30% or more with email marketing. If you’d like to learn more about ReEngager and how we help online stores like yours add millions to the bottom line, go to reengager.com. That’s R-E-E-N-G-A-G-E-R.com.
Hello and welcome to the ReEngager Podcast. Now today, we’re talking cart abandonment. Now this is a big, big problem for stores. Now if you already have a cart abandonment sequence, or some sort of email recovery cart abandonment recovery program going on – this is still going to beneficial to you. Why? Because I’m going to hit on some key facts about cart abandonment, and also give you some suggestions on how you can improve it. Which – when I’ve looked at most stores and what they’re doing for cart abandonment, this is going to go above and beyond that. So you’re going to pick up some ideas, whether or not you’re already doing this, okay?
Now the first thing, just to touch on is, what is cart abandonment, basically? Cart abandonment is when someone adds a product to the cart, and leaves before buying. So they click “add to cart,” and then they click around the site. And then something happens. Maybe their daughter runs up and says, “Daddy, I’ve got to, I’ve got to go. I’ve got a, I need some help. I need – take me school.” And they forget, okay? They have to go. They go and, what do they do? They leave, they shut the website and then you lost them. Now, according to the B (1:40?) Mart Institute – a web research company in the UK. 67% of online shopping carts are abandoned.
Now this varies from industry to industry and website to website. But you’re looking at 60 to 70% – 6 or 7 out of 10 people, who add something to the cart, leave. So that’s 6 or 7 people who intended on buying something, left. Because, for some reason, okay? Which means– This is a lot of money, we’re talking about 66%. 2 thirds of the potential sales that your site could be generating is walking out the door at the last minute, okay?
Now if you take a small store with 2 million dollars in annual sales, they’re losing more than 4 million dollars every year to cart abandonment, okay? So that’s for a small store, can you imagine what this is like for a – if we’re saying 100 million dollar store, okay? They’re losing 2 – 1 or 200 million dollars. Probably around the 200 million dollar mark. It’s just walking out the door every month. That’s probably about 18 million dollars a month they’re just losing to cart abandonment, okay?
Now based on all of this, it’s – it’s really not surprising that Business Insider estimates online retailers lost as much as 4 trillion dollars to cart abandonment. That’s 4 trillion, with a “T” to cart abandonment last year. Okay, and this is why you’ve got a lot of cart abandonment blog posts and content that people are putting out there. There’s cart abandonment software and all these various things.
Now one question, or a very important question to really answer. Is how effective are cart abandonment email recovery campaigns? ‘Cause you might have one set up right now. Maybe you’re using the default email that some of the shopping cart providers will– Shopping cart platforms will provide for you. Or maybe you’ve got more complex things. There’s a few different ways to do it. But let’s just look at the broad strokes.
Got 3 case studies here. In one case study, Blue Monkey recovered 13% of their abandoned orders with – with a cart recovery, abandoned cart recovery email campaign. So if you’re losing 4 million dollars a year, right? And you recover 13%, you’re looking at about 400– $430 000 in increased revenue, with a proper – a properly implemented cart abandonment campaign, okay? Radley London recovered 7.9% of lost sales. So they were a little bit lower, but still 7.9%, okay? This is revenue that you wouldn’t have had otherwise.
Boot Barn, another store recovered 12% from a 3 part abandonment campaign. Now that’s, that 3 part there is something I want to touch on right here. Because when I speak to stores, and I speak to stores every week – almost every day at the moment. They’re, what they’re doing is they’ve usually got one email, one cart abandonment email – and it’s the default email that their shopping cart platform provides. There’s nothing fancy, there’s very little research done, there’s not really any strategy. All it is, is a reminder – something that says, “Hey, you’ve got something in your cart that you forgot about, here’s a discount.” They just throw a discount at them.
And here’s the sad part about this. Imagine if you went shopping to a shopping mall, and you walked into a store. You looked at a beautiful dress, or maybe a nice suit. Looked at something amazing, right? Then you looked at the price tag. And you’re like, “No, too expensive.” And then you left. Then what happened though, the shop owner, he runs out of the shop waving the dress or the suit in the air saying, “I’ll give you 5%.” And you’re like, “Nah.” “I’ll give you 10% off.” “Nah.” “Give you 15%” And he just keeps chasing you down the street, throwing discounts at you.
You probably just think, think it’s a bit weird. Not just creepy, bur really like – really needy, okay? And I think that’s what a lot of stores do. That’s the vibe they’re giving off when they do this with their cart abandonment. You don’t want to just – as soon as someone leaves your cart, you just start pelting discounts at them. It devalues your product, it devalues your brand, okay?
So the question is, what do you do? If you’re going to do what Boot Barn did, and recover 12% from a 3 part cart abandonment campaign, what happens in those emails if you’re not offering discounts. Now discounts are powerful, but I think what’s important to consider, is you’ve got to think, “Why is someone leaving in the first place? Are they leaving because it’s too expensive, or are they leaving for another reason?”
So right now, I want to bring your attention to a list of the 14 main reasons why shoppers abandon their carts. I’m going to go through these fairly quickly. Number 1, presented with unexpected costs. Number 2, they were just browsing. Number 3, they found a better price elsewhere. Number 4, overall price was too expensive. Number 5, they decided against buying. Number 6, the website navigation – too complicated. Number 7, I think we’re up to – website crashed. Number 8, process took too long. Number 9, excessive payment security checks. Then we’ve got concerns about payment security. Delivery options were unsuitable. Website time out. Price was presented in a foreign currency. And the payment was declined, okay?
Now there’s a lot of things there, a lot of reasons why people are abandoning their carts that don’t – that we can’t deal, we can’t overcome with email. If they were just browsing – well they just happened to be just browsing. If they, if the website navigation was too complicated, well that’s a website navigation problem. If the website crashed, same thing, okay? But there are some things in that list that we can address in the email.
For example, “presented with unexpected costs.” Now I mean, that’s something you want to improve in the way your shopping cart flows. But you could also mention that. Once you’ve improved the shopping cart, you want to mention in the emails that you’re sending that there are no hidden costs. There are no expected costs, okay? Let’s see, “process was taking too long.” That’s going to be a website flow thing. But you can, with your cart abandonment – you want to make sure that in that email, that when they click that, they go straight to the final page in the cart where they just need to pay.
Okay, delivery options. So this is something where you would make a – if the delivery options are unsuitable, but it turns out you have all sorts of delivery options. You, like it’s not enough to just have those delivery options – you need to make sure people know that. So in the email, explain that you – go through all the benefits. Explain that you have all– Just list out all the different delivery options you have, and if possible, offer free shipping too.
Now if people are concerned about payment security, make sure they’re aware that you have the best security in the world. That you have all sort of – whether it’s (8:08?) security sales or– You’ve got to build a story. You’ve got to figure out a way to convince them that the payment security’s there, okay?
So, now we can go back up to, like how you can reduce cart abandonment. Here we go, just with the emails. What I will do, my suggestion – and what we do for clients. Is email 1, is a simple reminder, okay? Because at this point, we don’t know why they’ve left. For all we know, it could have nothing to do with the price. Maybe they just got distracted. So we’re going to send them a reminder, and make sure that we hit the obvious places – the obvious reasons why they might have declined. Like make sure that they know we’ve got free shipping. Make sure that they know our payment security’s top notch. Make sure they know that these are all our payment options and shipping options, okay?
Probably throw a testimonial in there. Really just saying, “Here’s your order.” Get their attention with – I’ve seen companies do this with like a cute picture of a dog that’s really sad. And say, “We’ve missed you. What happened? Do you not like us?” People feel sorry, and it kind of makes them laugh too. But then you, yeah – give them the product, give them the picture, and then show them these different benefits.
Now number 2, email number 2. This is going to take some research. You want to find out why are people not buying, okay? And you can do this in email 1 by saying, “Hey look, if you don’t want to buy right now, please hit ‘reply’ and tell us – what stopped you from buying?” And when you do that, and you make it obvious that – it’s really clear in the email that they can reply to it. People will reply, and they’ll tell you what’s wrong. And then what you want to, is you want to use that information to drive the campaign, to drive the messaging in email 2.
And then in email 2, use that. If they’re afraid of trust, they don’t trust you – they don’t think the product’s good enough. Then email 2 needs to be a story or some social proof or a testimonial or a video, okay? Or maybe they’ve seen bad reviews. We had a client where they had a bunch of bad reviews online, that they believed was a competitor. And so email 2 was an explanation of– This was a core, a major issue for why some of the customers weren’t buying. So we decided to hit it out, deal with it head on and explain the situation to the customers. They were aware that these weren’t real reviews, okay?
And so we can do this. And in email 3, that’s when I’d hit them with a discount. ‘Cause if they haven’t bought from the reminder, and they haven’t bought we tried to deal with the main objection. Then at that point it’s like, “Fine, have a discount.” Have a 5%, have a 10% discount, and leave it at that, okay? That’s my suggestion. Don’t just do crappy one email cart abandonment with your default, whatever the default platform is. Be creative with it. I’m going to have some samples, some examples on the website at reengager.com in the blog, you can go check out. And if you want links to anything that I’ve mentioned to you, go to reengager.com. I’ll see you next time.
Hi there, thanks for listening to the ReEngager Podcast today. If you’d like to discover more about email marketing for online retailers and e-commerce stores, go to reengager.com. That’s R-E-E-N-G-A-G-E-R.com. Use our ROI calculator to find out how much you could increase sales with email marketing, or book in for a free strategy session with a ReEngager email marketing expert. Get started now at reengager.com. That’s R-E-E-N-G-A-G-E-R.com.
Intro music by DJ Rkod and George_Ellinas.