Why it Causes Merchants to Scratch their Heads
It is estimated that approx. 70% of online shopping sessions end in an abandoned cart; potential customers initiate a transaction but fail to complete.
There are a number of reasons why ecommerce sites don’t convert well. Common examples include; too complex a checkout system, and shoppers being distracted whilst mobile browsing.
Using the correct tools, an abandoned cart represents big opportunities for retailers to increase their revenue and to onboard new customers.
The following shows how a successful online clothing retailer, TheSwankStore utilised Gather to reduce cart abandonment and increase conversion rates.
What Cart Abandonment Looks Like at The Swank Store
TheSwankStore is a fashion retailer which uses the Shopify platform. TheSwankStore offers exclusive women’s resort wear collections, premium designer kaftans and amazing silk maxi dresses.
TheSwankStore commenced the online business in 2015, and compared to other Shopify stores that opened at the same time they are in the top 1% of stores based on traffic.
Like all retailers, TheSwankStore feels the frustration by cart abandonment.
Tackling Abandoned Carts
Online retailers usually aim to have a baseline conversion rate of 2%. This means, in general terms, that 2 in every 100 site visitors converts to a customer who makes a sale.
Optimising for increased conversions means that your store maximises return from investment on advertising and increases revenues.
Using a two pronged approach, as described below, TheSwankStore have been able to increase their online store conversion rate by 15% in the six months from April to October 2017.
So how did they seize the opportunities presented by abandoned carts?
First Approach - Email
The first approach was to utilise the email address provided by the potential customer, when they sign up, before they abandon cart.
The Swank Store utilises a cart abandonment service that enables automatic reminder emails to be sent directly to the customers with items in their cart. They use Mailchimp's automation features to do so.
These emails can be scheduled to be sent over a preferred time period. The Swank Store used the email addresses of customers with abandoned carts to send out 3 emails. The first email is sent 2 hours after the cart is abandoned. One day later a second reminder email is sent. The third email is sent out two days after abandonment.
Utilising the cart abandonment email service, they are able to customise the emails sent and remind the customer that a specific item is in the cart.
Second Approach - Rescue before Exit
The second approach utilises Gather’s unique features. The Swank Store used Gather to optimise their conversion rates to increase revenues and average order size.
Gather allows you to design customised website overlay popups, targeting customers with items in their cart.
With Gather’s exit intent feature, a customer receives a behavioural incentive to complete the purchase if it looks like they will otherwise exit the website.
For ecommerce stores, this incentive comes in the form of a coupon code which is delivered instantly to the customer in their browsing session.
Offering coupons to customers, usually encourages customers to spend more, and as a result the average order size increases.
TheSwankStore used Gather to deliver a coupon to target customers with 2 or more items in the cart, if and when they show the intention to exit the site.
The Swank Store's Abandoned Cart Popup
Why Targeting Customers by Number of Cart Items?
Using Gather, The Swank Store chose to specifically target customers with 2 or more items in their cart.
They chose to target customers who are considered to be engaged, to ensure that they are only offering discounts to customer with intent to buy and with multiple items in the cart.
This approach ensures the impact on margins is offset by the increased revenue and inventory turnover.
Upon using Gather to prevent cart abandonment, also reminding customers about abandoned items with abandoned cart emails, The Swank Store increased their online store conversions by 15% and increased the average order size by $12 in just 6 months.
Since the launch of the cart abandonment campaign to date (7 month period), The Swank Store generated $150,000 in orders from customers who received a coupon code through Gather’s cart abandonment campaign.
What it Looks Like to Loose Customers
The example calculation below shows the effects that conversion rates have on revenue:
With a 3% conversion rate:
Let’s say you are spending $1 per click.
Or spending $1 per visitor who comes form targeted content. It isn't easy to calculate the costs involved in acquiring one visitor from organic content, but let us say that you pay a content producer, and their salary amounts to $1 per visitor acquired from the content they produce.
Your average order size is $100.
And you receive 5000 unique visitors per day from these sources.
That is 4,850 visitors every day, for whom you pay to acquire, and loose without any form for engagement.
Why this Matters
With a 3% conversion rate:
In this example, for every 1% increase in conversions, you increase revenue by $5000 everyday.
This translates to an additional $150,000 every month.
A 1% increase in conversion yields to a dramatic change.
Optimizing your conversion rates is an exercise well worth doing, and should really sit at the top of the your business priority list. Optimizing conversions is all about implementing many small improvements that yield to an overall increase in your conversion rate.
Cart abandonment overlays and emails are some of things you can implement towards improving overall conversions.
I have found from my work with customers, that the lowest hanging fruit in increasing conversions (which what I would start with) is to reduce abandoned carts first, then move onto the plethora of changes you can make .
According to Experian, Every dollar spent on email marketing offers a return of $44
“ We've been working with the talented Iz & the Concierge team from Gather since January this year, where initially we wanted to use their Exit Intent cart abandonment pop-up solution to help reduce cart abandonment for our e-commerce site. Essentially not only helping to recover lost revenue opportunities but also providing more new customers who have future intent in purchasing from our store. “ - Aaron Kay, Director The Swank Store (2017).