The case for ReMarketing: Converting abandoned shopping baskets into purchases

June 2008

An Experian CheetahMail white paper

© 2008 Experian CheetahMail, Inc. All rights reserved.

Relevant emails triggered by web analytics data encourage order completion and drive online sales.

The case for ReMarketing

IntroductionWhy do some online shoppers invest the time and effort in getting all the way to the checkout only to ditch their baskets for no apparent reason? There is a multitude of possible answers, but the harsh reality is that 41% of the UK’s online shoppers admit to doing this regularly.

The latest research from CheetahMail shows that very few companies are attempting to try and win back shoppers who fall at the last hurdle. In the UK, only a third of shoppers who have left a website empty-handed have ever received a permission-based email to a) find out why they dropped out or b) make them an offer to go back online and complete their purchase.

It is quite natural for companies to focus their attention on the paying public, but to ignore those who – for whatever reason – leave their site empty-handed is incredibly short sighted.

If further convincing is required, look no further than the 30% of UK shoppers who admit that they would go back online and complete their purchases if something as simple as a small discount or free postage and packing was offered to them.

When put into this context, it becomes increasingly difficult to understand why so few companies are using ‘ReMarketing’ techniques to re-engage with those shoppers who go AWOL at the checkout.

30% of UK shoppers admit that they would go back online and complete their purchases if something as simple as a small discount or free postage and packing was offered to them.

Projected value of a typical ReMarketing campaign

Assumptions:

50,000 shopping carts abandoned by registered email subscribers each month

Conversion Rate: 1% to 2%†

Average Order Value: £150

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Revenue per month

50,000 Abandoned carts1-2% Conversion rate†

£150 Order value

£75,000 - £150,000

† The ReMarketing conversion rate can be as high as 5-10 times the normal bulk

email conversion rate. The bulk email conversion rate is assumed to be .2% and we are assuming a 1% to 2% conversion

rate, which is in line with Jupiter 2005 estimates.

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© 2008 Experian CheetahMail, Inc. All rights reserved.

The Case for ReMarketingReMarketing is straightforward. It uses trigger-based emails to counter aban-donment rates and browsers, squarely aimed at winning shoppers back with an offer too good to resist and creating new revenue streams out of previously missed opportunities. Email marketing is proven to win and retain customers, but given the evidence above, customer re-activation is clearly being overlooked.

In short, two-thirds of businesses are missing a major trick.

Some may suggest that empty shopping carts are unavoidable and to a certain degree this is true. After all, not everyone who visits a high-street shop actually makes a purchase. However, the big difference between off and online commerce becomes clear when you ask how many high-street shops could actually tell how close every abandoned shopper got to making a purchase and where in the store they dropped out?

Clearly, this is where online shopping has a major advantage. Website analytics now means that virtually every online store can determine where and when a shopper dropped out from their site. Using this rich source of information together with trigger-based emails means that re-engaging with abandoners and browsers to turn them into potential new customers is now an affordable reality.

This makes it all the more confusing as to why so few businesses are taking this approach.

It could be that ReMarketing is perceived as a ‘nice to have’ or that companies are not that concerned about trying to win back shoppers if it means diverting their attention from the ‘paying public’. Whatever the reason, companies should ask themselves the following before they find themselves left out in the cold, scratching their heads wondering why they failed to capitalise on ReMarketing:

What happens if online sales start to bottom out due to increased competition? Have we done everything to prevent this from happening?

How many people leave our website every day without making a purchase?

What kind of impression does it send to shoppers if we cannot even be bothered to find out why they made it all the way to the check-out only to get cold feet? What if our biggest competitor actually follows up every time they are faced with an empty cart?

What happens when our managing director stops looking at SEO charts and starts wanting to know why shoppers are dropping out at our site’s check-out? What are we doing to solve the problem?

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The ReMarketing Value Proposition

The projected value from ReMarketing is immense. Commercial benefits, compared to standard promotional messages, include:

CONVERSION RATES

5-10x HIGHER†

REVENUE PER MESSAGE

3-9x HIGHER‡

PLUS:• NEW REVENUE STREAM

(FROM PREVIOUSLY “LOST” CUSTOMERS)

• REDUCED LIST FATIGUE

† CheetahMail testing & analysis‡ “The ROI of E-mail Relevance,” JupiterResearch, 2005

Website analytics now means that virtually every online store can determine where and when a shopper dropped out from their site.

© 2008 Experian CheetahMail, Inc. All rights reserved.

How Does ReMarketing Work?ReMarketing is devastatingly simple, but highly effective. Below are some practical examples of how ReMarketing messages can re-engage browsers and abandoned customers:

1. Follow-up emails to registered customers who abandon their shopping basket

Was the offer not compelling enough? Was the shipping time too long? Could you only ship to the invoice address? Three suggestions for follow-up email content would be:

An incentivised offer/discount; for example, 10% off or free shipping

A quick survey asking why they didn’t buy. If you cannot convert them, then learn from them.

Offer a complimentary product, on the assumption that they went to purchase this one from another source.

2. Reminder emails about an

existing shopping basket

Did they forget to simply complete the purchase? Were they interrupted? Did they have to check with partner or family before purchasing? Again, an incentivised reminder is ideal, maybe run an ‘A/B test’ with a non- incentivised version too.

3. Follow-up emails to registered customers that received a

system error during checkout

Every company would like to have a 100% fault tolerant website, but issues happen. Ask the customer to re-visit to try again or offer an alternative process – download a form, call a freephone number. The person wants to buy…they just need another solution.

4. Targeted promotions based on an item a visitor browsed

Behavioural information gleaned from browsers can prove to be more accurate than user supplied preferences. Emails generated with similar product lines to the ones the user browsed will garner higher response rates.

5. Incentive promotions for out-of-stock or back-ordered items

If a browser sees an item and finds it out-of-stock, they will most likely research the product elsewhere. If you can email an offer to them with an incentive to place a pre-order and ‘wait’ for stock, you then stem the flow to competitor sites.

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ABANDONED SHOPPING BASKET

REQUESTED OUT-OF-STOCK ITEM

SYSTEM ERROR AT CHECKOUT

BROWSED ITEMS ON WEBSITE

EXISTING SHOPPING BASKET

© 2008 Experian CheetahMail, Inc. All rights reserved.

The Steps for Effective ReMarketingBusinesses wanting to embark on ReMarketing campaigns ought to take the following steps to maximise returns.

1. Know your starting point

Measure and identify your website’s exit pointsMonitor your numbers of dropped basketsCalculate your average order valueResearch your conversion rate

2. Speak with your web analytics provider

Confirm you can access page visits down to user levelVerify they can export data on a regular basis in a secure format

3. Speak with your email provider

• Check they can auto load data and auto deploy emails• Confirm they understand your objectives clearly

4. Start small and simple

• Send an email to remind users they have an active shopping basket• Alternatively, email users with a dropped basket exit survey

5. Measure responses continuously

• ReMarketing is a powerful tool, but returns must justify the effort• Like any email campaign, adjusting and tweaking content is vital

6. Enhance your programs with thought

• Set a mailing priority to your campaigns versus marketing mails• Use frequency capping to restrict ‘over-mailing’• Make sure you have access to the appropriate content to mail

Conclusion ReMarketing clearly works, which makes it all the more staggering that, to date, so few companies have tapped into its potential.

In our opinion, it is only a matter of time that the financial benefits become obvious, given the returns it delivers and the UK shoppers’ appetite to be enticed back online with the right offer. Combine this with heightened competition amongst brands over the course of the next year, born out of increased digital marketing investment, and the industry will see many more companies looking closely at ReMarketing to see what it can do for their business.

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•• ReMarketing

clearly works, which makes it all the more staggering that, to date, so few companies have tapped into its potential.

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About Experian CheetahMailExperian CheetahMail is the trusted service provider of online marketing solutions for top enterprises worldwide. Offering industry-leading email marketing and customer intelligence solutions, as well as providing a broad range of client services, Experian CheetahMail enables clients to build data-driven, relevant relationships with their customers. Servicing the world’s most recognizable brands, Experian CheetahMail’s globally diverse client base includes Barclays, Borders Books, Discovery Communications, H&R Block, KLM, Sears Holdings Corporation and Wyndham Hotels. Experian CheetahMail, a business unit of Experian® Group Ltd. (LSE:EXPN), was founded in 1998 and is headquartered in New York City with offices in Los Angeles, San Francisco, London, Dublin, Amsterdam, Paris, Barcelona and Melbourne.