2015 Shopping Cart Abandonment Research Study

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Prosper Daniels
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1 RESEARCH STUDY 2015 Shopping Cart Abandonment Research Study Beginning in 2011, Listrak has conducted an annual shopping cart abandonment (SCA) study on the retailers in the current Internet Retailer Guide¹ and 500 Guide². For two years previous to the first study we looked at just the retailers in the Internet Retailer Guide. Looking at the studies throughout the years, there has been a steady upward trend in several areas: the number of retailers using SCA s; the number of SCA s sent per retailer; the number of retailers reaching back to abandoners sooner; and the withholding of discounts in first SCA . While each year we found that more and more top retailers were adopting SCA programs and using them more effectively, each year we still found a surprisingly significant number of top retailers not taking advantage of this powerful retargeting opportunity, and of those using SCA, many who were not optimizing results with proven best practices. Similarly, this year s study presents the findings for the shopping cart abandonment practices of the retailers in the 2015 Internet Retailer and 500 Guides, and as in previous studies, we note the continuation of the trends above, as well as some notable shifts, and point out areas of missed opportunity. This year we also share data based on the campaigns of hundreds of Listrak retail clients that quantifies the effectiveness of SCA campaigns, and therefore the extent of the missed opportunities of many of leading retailers. We then go a step further by studying top performing shopping cart abandonment campaigns in order to identify best practices. SHOPPING CART ABANDONMENT CAMPAIGN USAGE While 2015 once again saw an uptick in the number of top retailers who use shopping cart abandonment campaigns to retarget shoppers, it appears that use is approaching a plateau. In the 2011 study, we reported that 14.6% of the Top 1000 retailers sent at least one SCA message: 18.7% of the, a 42% increase vs. 2010; and 10.7% of the 500 (not studied in 2010). Then in 2012, our study revealed that 30.1% more of the Top 1000 retailers adopted shopping cart recovery tactics vs. 2011, with 19% sending at least one SCA . The retailers, at 19.4%, had seen a 4.8% increase, and the 500, at 18.8%, had seen a significant 75.7% increase. In 2013, the trend continued with 24.5% of Top 1000 retailers sending at least one SCA message, an increase of 29% vs The, at 23.5%, increased 21% and the 500, at 25.5%, had increased 35.6%. 1

2 Last year s study revealed that, at 33.5%, 36.7% more of the Top 1000 retailers were sending at least one SCA message vs at 34.3%, 45.9% more of the retailers and, at 32.7%, 28.2% more of the 500. And while this year s research shows that the trend continued in 2015, as the graph below shows, the increases are notably less dramatic. At 35.2%, 5.1% more of the Top 1000 retailers are sending at least one SCA message vs At 35%, the increase is just 2% for the retailers, and at 35.4%, 8.3% more of the % 3 25% 2 15% 1 5% TOP RETAILERS WHO SEND AT LEAST ONE SCA Retailers 500 Retailers Top 1000 Retailers 2015 RESULTS: Top retailers sending at least one shopping cart remarketing message 35.2% Top 1000 Retailers 5.1% 35% Retailers 2% 8.3% 2015 increase over % 500 Retailers Clearly, not only has the number of Top 1000 retailers employing shopping cart abandonment retargeting tactics begun to plateau, but the divide between the usage of the and 500 has narrowed, as well. With only little more than one out of every three Top 1000 retailers sending at least one SCA message, this is a notable and surprising finding. RESEARCH STUDY 2

3 NUMBER OF SHOPPING CART ABANDONMENT MESSAGES Along with the upward trend in the retailers in the Internet Retailer and 500 Guides sending at least one SCA message, we have historically likewise seen an increasing trend in the number of SCA messages they are sending per campaign. In 2011, we reported that an astounding 77.5% of all shopping cart abandonment campaigns received from the Top 1000 retailers featured only one 8 from the and 75% from the 500. That year 15.8% of the Top % of the and 15% of the 500 sent two s, and just 6.7% of the Top 1000 sent a third message 3.3% of the and 1 of the 500. In 2012, our study showed that fewer retailers were only sending a single SCA message 62.4% of the Top 1000, down 19.5% from and the gap narrowed between the and 500, with 62.5% and 62.3%, respectively, sending just one message. That year, the number of Top 1000 retailers sending two SCA messages increased 7.6% to 17%. Interestingly, the sending two remained at 16.7%, but the 500 increased to 17.3%. Most dramatically, the number of Top 1000 retailers sending three SCA messages jumped 207% to 20.6% % of the and 20.4% of the 500. In our 2013 study, we found that even fewer Top 1000 retailers were opting for a single SCA message 44.9% vs. 62.4% in The number of retailers sending just one was down 18% to 51.3% and the 500 was down 38% to 38.6%. Top 1000 retailers sending two SCA messages increased to 22% % of the and 23.6% of the 500. Likewise, the number sending three messages continued to grow 29.3% of the Top 1000, 25.6% of the (a 23% increase) and 33.1% of the 500 (a significant 62% jump). That year we also found that 3.6% of Top 1000 retailers were now sending four or more messages 2.6% of the and 4.7% of the 500. In fact, that year we reported that we d actually seen retailers sending as many as 11 SCA messages. Last year, the number of Top 1000 retailers sending only a single message decreased only slightly to 42.9%. The number of retailers decreased to 46.8%, however the number of 500 actually increased to 39.1% from 2013 s 38.6%. Interestingly, 22.4% of Top 1000 retailers sent two SCA messages up very slightly from 2 last year but while the increased 31.2% to 26.9%, 500 retailers sending two messages decreased from 23.7% to 18%. It s worth noting that overall, the number of Top 1000 retailers sending three SCA messages actually decreased in 2014 to 27.3% from 29.3%, but interestingly, while the decreased 24.6% to 19.3%, the 500 increased 6.9% to 35.4%. And in 2014, while the number of top retailers sending four or more messages was still very minimal, it increased significantly. At 7.2%, the number of Top 1000 retailers doubled vs with retailers increasing 169.2% to 7% and 500 increasing 59.6% to 7.5%. We have historically seen an increasing trend in the number of SCA messages retailers are sending per campaign. RESEARCH STUDY 3

4 In 2015, the greatest number of Top 1000 retailers are still only sending only one message, but the gap is narrowing. This year, we found that 36.2% of Top 1000 retailers are sending a single SCA message, a 15.6% decrease vs At 35.4% retailers continued to decrease (24.3%), and the 500 at 36.9% began once again decreasing (5.6%). 25.9% of Top 1000 retailers are sending two SCA messages, up from last year s 22.4%, this time with both the and 500 increasing to 33.1% (up 23%) and 18.8% (up 4.4%), respectively. This year, the number of Top 1000 retailers sending three messages began climbing again, reaching 28.8% (up 5.4%), with the at 24.6% (up 27.4%), but at 33%, the number in the 500 actually dipped 6.8%. Overall, the number of Top 1000 retailers sending four or more SCA messages increased this year to 9.5% (up 31.9%). While retailers were down slightly to 6.9% (1.4%), the 500 rose to an impressive 11.9%, up 21.1%. This year we tracked retailers sending up to eight SCA messages: NUMBER OF SCA S SENT BY TOP 1000 RETAILERS IN Message Messages 8 Messages Messages Messages Messages Messages Messages NUMBER OF SCA S Top Message 2 Messages 3 Messages 4+ Messages 500 Top Top Top RESEARCH STUDY 4

5 SCA CAMPAIGN CADENCE The First Historically we have seen that each year more top retailers deploy the first shopping cart abandonment within the first 24 hours post abandonment, and that more of the 500 retailers consistently do so than the. Interestingly, this year, the trend continued with more retailers sending the first message within the first day, however, for the first time since 2011, fewer of the 500 sent within 24 hours versus It will be interesting to see if this decline continues. For the first time since 2011, fewer of the 500 sent the first SCA within 24 hours. FIRST MESSAGE SENT WITHIN 24 HOURS OF ABANDONMENT RESEARCH STUDY 5

6 The SCA Over the past several years, while we have seen top retailers sending the second SCA message up to five days or more after the first, the most popular cadence has been within 48 hours, with the most 500 retailers doing so every year since This year, however, there was a decline in second SCA s being sent within two days of the first by both groups. retailers sending within 24 hours was down 38.5%, and those sending two days after the initial SCA was down 7%. 20.2% fewer of 500 retailers sent within the first 24 hours this year, and those sending two days after the first SCA was down 65% RETAILERS SENDING THE SECOND SCA WITHIN 48 HOURS OF THE FIRST In fact, there was much fluctuation for both groups in the timing of second messages this year: % CHANGE IN TIMING OF 2015 SECOND SCA S VS day 2 days 3 days 4 days 500 RESEARCH STUDY 6

7 The Third SCA The timing of the third SCA for both the and 500 retailers, as shown below, has fluctuated from year to year. The only thing that has remained constant is that the fewest number of Top 1000 retailers sends the third message within one day of the second and that most send the third message more than 3 days later. The timing of the third SCA for both the and 500 retailers has fluctuated from year to year. TIMING OF THE THIRD SCA MESSAGE day 2 days 3 days more than 3 days+ Use of Discounts Offering a discount, free shipping or other incentive in order to get a cart abandoner to complete an order is a successful strategy, however, it compromises the profitability of the sale. Sometimes, all an abandoner needs is a reminder that something was left in a cart, and research shows that retailers in both groups, for the most part, have come to realize this and have begun to wait until later in the SCA series to introduce an offer. Sometimes, all an abandoner needs is a reminder that something was left in a cart, and retailers have come to reailize this. RESEARCH STUDY 7

8 With the exception of this year, when we saw a small uptick in the number retailers offering a discount in the first SCA (2 vs. last year s 18.1%), every year since 2011 we have seen both the number of and 500 who feature a discount in the first SCA steadily declining. And while since 2011 significantly more 500 retailers have waited to feature discounts in the third versus second SCA , it was not until 2013 that retailers began waiting until the third message. OFFERS/DISCOUNTS IN SCA S Message 1 Message 2 Message 3 Looking at this year specifically, the trend in retailers waiting longer to offer discounts continues through the fourth , with only 17.3% of top retailers offering an incentive in the first , and that number consistently growing through the fourth , where more than two thirds (75.8%) of the Top 1000 retailers feature offers. The trend in retailers waiting longer to offer discounts continues through the fourth PERCENTAGE OF TOP 1000 RETAILERS OFFERING DISCOUNTS IN SCA S RESEARCH STUDY 8

9 Personalization Personalization in in its infancy simply meant using a subscriber s name in the subject line and/or body of the , and it s a practice that is still in use. In 2011, we found that 27.4% of the Top 1000 retailers (26.6% of the and 28.8% of the 500) were personalizing the first SCA message with the subscriber s name. Jump to 2015 and we found that just slightly fewer 23.8% - of the top 1000 retailers are still using personalization by name in the first SCA. Interestingly, this year, only 19.4% of retailers are doing it, but 28.3% of 500 retailers just slightly fewer than in In this year s study we also noted that most retailers % - who opt to personalize by name in the first continue to do so through the second and third s. In several, but not all, of our studies, we have taken a look at the use of product recommendations to personalize SCA s. In 2011, we reported that 38.7% of retailers sending at least one SCA message included an image of the abandoned product in the . Then in 2013, we took a look at the use of product recommendations by top retailers who send at least one SCA message both online and in . That year we found that while 9 and 84% of and 500 retailers, respectively, were featuring product recommendations onsite, only 12% and 4%, respectively, were including them in SCA s. In this year s study we found that 24% of retailers who send at least one SCA message include personalized product recommendations in at least one SCA message up 8.1% from And while only fewer than half of that 11.4% - of 500 retailers do the same, it is a 51.5% increase vs Usage of product recommendations is nearly identical for SCA messages one and two, and only drops slightly for SCA messages three and four: 94.1% of retailers who personalize by name in the first continue to do so through the second and third s. 25% TOP 1000 RETAILERS USING PRODUCT RECOMMENDATIONS IN SCA S 2 15% 1 5% RESEARCH STUDY 9

10 SCA PERFORMANCE: WHY SCA CAMPAIGNS ARE SO IMPORTANT So why is the fact that in 2015 only slightly more than a third of the Top 1000 retailers, as rated by Internet Retailer, send at least one shopping cart abandonment retargeting message shocking to us? Because at Listrak, we have hundreds of retail clients using the solution with results that prove that top retailers are leaving millions of dollars on the table, so to speak, by failing to use this well-oiled, time-tested strategy. Listrak clients SCA results prove that and 500 retailers are leaving millions of dollars on the table. We looked at the SCA conversation metrics of 550 retailers across an array of verticals for a full year (July 2014-July 2015). We found that the average SCA conversation open rate is 24.3%, the average click to visit rate is 26.9%, and the average conversion rate is 19.7%, all significantly outperforming the respective metrics of the marketing messages of our top performing retailers who also have SCA campaigns: LISTRAK SCA CAMPAIGN METRICS 3 25% 2 15% 1 5% Open Rate Click to Visit Rate Conversion Rate SCA Conversion Marketing Message It is worth noting, that while the average SCA conversation conversion rate is 19.7%, the largest number of retailers 34.4% - falls into the 20-3 average conversion rate range. RESEARCH STUDY 10

11 We also took a look at the SCA conversation rate of retailers by vertical. Although retailers we researched represent a wide array of different verticals, below are the rates for the verticals with the largest numbers of retailers: LISTRAK SCA CONVERSATION CONVERSION RATE BY VERTICAL 35% 3 25% 2 15% 1 5% Apparel/ Accessories Food/ Drug Health/ Beauty Housewares/ Home Specialty/ Non-Apparel TOP 50 PERFORMING LISTRAK SCA CAMPAIGNS JULY 2014 JULY 2015 But averages are just that, and as we reported in our Modal Acquisition Research Study, at Listrak we advise our clients to strive for the metrics of top performing campaigns, rather than seeking to simply be average or slightly better. To that end, we took a close look at the details of the 50 highest performing shopping cart abandonment programs of the 550 we studied, based on SCA conversation conversion rate. The highest conversation rate in the group is 55.06%, and the average of the 50 is 41.3%. We advise clients to strive for the metrics of top performing campaigns, rather than seeking to simply meet averages. Below is a close look at top performing SCA campaign details: Number of Messages More is More 56% of Listrak s top performing SCA campaigns have three messages. The next most popular number of messages is four at 32%, while only 8% have two messages and 4% a single SCA . And while four is the maximum number of messages being sent by the 50 top performing retailers, our work with hundreds of clients shows that if the last SCA message is converting at a double digit rate, it is beneficial to add another message to the campaign. RESEARCH STUDY 11

12 Timing of the First SCA Message The timing of the first SCA messages ranges widely among Listrak s top performing SCA programs, from just one minute post abandonment to eight hours, with the average being 166 minutes (2 hours, 46 mins). The most frequently used timing for top performing campaigns is three hours, with 74% of retailers with top performing SCA campaigns using a 180 minute wait step. TIMING OF FIRST SCA MESSAGE 74% 2% 2% 4% 4% 8% 4% 2% 1 min 15 min 30 min 60 min 120 min 180 min 240 min 480 min Timing of the SCA Message Of the 96% of Listrak s top performing retailers sending a second SCA , the most popular cadence is two days after the first. Interestingly, the next most popular time is just one day after the message at 20.8% and then a jump to five days at 6.3%. None of the top performing retailers sends the second message either three or four days following the first. TIMING OF SECOND SCA MESSAGE 72.91% 20.83% 6.25% 1 day 2 days 3 days 4 days 5 days RESEARCH STUDY 12

13 Timing of the Third SCA Message 88% of Listrak s retailers with top performing SCA programs send a third SCA message, and send it anywhere from one day to two weeks after the second. The most popular wait period between the second and third messages by far, however, is five days. None of the retailers sends six days after the second message or any time between seven and 14 days. TIMING OF THIRD SCA MESSAGE 59.09% 13.63% 9.09% 4.54% 6.81% 4.54% 2.27% 1 day 2 days 3 days 4 days 5 days 7 days 14 days Timing of the Fourth SCA Message 32% of top performing retailers send a fourth SCA message, and while the most popular timing is four days after the third, the timing of this message is the most inconsistent of all in the series. TIMING OF FOURTH SCA MESSAGE 25% 18.75% 18.75% 18.75% % 1 day 2 days 3 days 5 days 7 days 14 days RESEARCH STUDY 13

14 DISCOUNTING As we noted about retailers in general, while offering an incentive to complete the purchase on an abandoned cart is a fairly common practice, retailers realize that sometimes a simple reminder is all that is needed and therefore opt not to unnecessarily sacrifice margin in the first SCA message. In fact, 9 of Listrak s retailers with top performing SCA campaigns do not include an offer in the first message. 9 of Listrak retailers with top performing SCA campaigns do not include an offer in the first message. 18% of the retailers studied do not offer an incentive until the last in the series and 2 do not offer an incentive at all. 14% withhold an offer in the first and then feature the same incentive in all subsequent SCA messages, and 22% implement a discount ladder strategy, whereby incentives build with each message in the series. Incentives Of the one in 10 top performing Listrak retailers offering an incentive in the first SCA , an equal number 4% each offer 1 off and free shipping and 2% offer 5% off a purchase. In the second SCA , 39.6% of retailers are still withholding an incentive, and of those offering an incentive, the lowest 5% off is the most used % INCENTIVES IN SECOND SCA MESSAGE 20.83% 6.25% 6.25% 2.08% 2.08% % 2.08% none 5% off 1 off 15% off 2 off 5$ off free gift free shipping free gift and free shipping RESEARCH STUDY 14

15 The third SCA messages of Listrak retailers with top performing SCA campaigns include an array of incentives, with 1 off clearly being the most used. 15% + free shipping 1 + free shipping $5 off shipping free gift and free shipping free shipping free gift $10 off 2 off 15% off 12% off 1 off 7% off 5% off none INCENTIVES IN THIRD SCA MESSAGE 5% 1 15% 2 25% 3 35% Of the 32% of our retail clients with top performing SCA campaigns who send a fourth SCA message, one quarter still use a 1 off incentive, while an equal number offer 5% off. INCENTIVES IN FOURTH SCA MESSAGE 2 + free shipping free shipping $10 off 2 off 1 off 7% off 5% off 5% 1 15% 2 25% 3 RESEARCH STUDY 15

16 DESIGN OF TOP PERFORMING SCA MESSAGES The call-to-action is key in all s, and is especially important in shopping cart retargeting. No matter if it s the first or fourth SCA message, the retailer s fundamental purpose in sending the is to make it easy for the cart abandoner to return to the site and complete the sale. With that in mind, it is not surprising that only 14% of our retailers with top performing SCA campaigns feature only a single call-to-action button in their SCA s. While 24% feature two CTA buttons, the greatest number 62% - feature three calls-to-action, most often two buttons and a link in the copy. The most-used CTA is the simple but urgent Checkout Now button, which is used by 78% of the retailers, and the most used combination is two checkout now buttons and a link in the copy, which is the strategy used in 54% of the SCA s. 62% of Listrak retailers with top performing SCA campaigns use the same creative for each message in the series, only changing the copy and/or offer from to . 12% use the same basic layout but simply change the image in each . SCA Design Best Practices Listrak s Professional Services team meets regularly to evaluate the success of our clients solutions and to share third party research on best practices. Below are their basic guidelines for working with clients on SCA design and messaging: Do research - Look into the reasons why customers abandon carts for a particular retailer and address those reasons with message content. Don t patronize - There is no need to state the obvious -- nearly all customers know they forgot something or left something behind. Instead, give abandoners reasons to come back and buy. Be clear and succinct - Tie the customer to their actions - Thank you for visiting us. Come back, finish checking out, and save 1. Pay attention to subject line - Make it a maximum of 40 characters, keeping the important words in the first 35 characters. Leverage preheaders - Use preheaders to note an everyday promotion, if applicable (free shipping, free returns, price guarantee, etc.), and reiterate the urgency of the subject line. Be clear, yet creative with calls-to-action - Consider being creative with the verbiage, but be clear with what you want the user to do. Properly place incentives - If a code is dynamic or uses a personalization tag, it should live outside of the hero itself in a separate, html-text section. RESEARCH STUDY 16

17 METHODOLOGY Each year (since 2011) Listrak visits websites on Internet Retailer s ¹ and 500² lists. If an organization has more than one brand, only one site is shopped. Sites that cannot be shopped are excluded from the data. The same tactics are employed on each site. If a site has a modal lightbox, we subscribe via that method. If not, we subscribe using the form or link provided in the header or footer. We create accounts where necessary. We then add an item to the shopping cart and begin, but do not complete, the checkout process. We add the following information on the form: first and last name, address, physical address and phone number. We then monitor the abandonment s we receive. For this research study, we also looked at the shopping cart abandonment conversation metrics of 550 retailers who are Listrak clients across an array of verticals for a full year (July 2014-July 2015), including conversation open, click to visit and conversion rates. In addition, we looked at the same metrics, as well as design aspects, of the 50 top performing SCA campaigns of those retailers based on conversation conversion rate. Sources: 1. Internet Retailer Guide 2. Internet Retailer 500 Guide RESEARCH STUDY 17

Shopping Cart Abandonment Practices of the Internet Retailer 1000 Companies

Shopping Cart Abandonment Practices of the Internet Retailer 1000 Companies by Megan Ouellet, Director of Marketing, Listrak October 12, 2011 Shopping cart abandonment rates are on the rise. The average