It has been a personal quest of mine for some time to understand online buyer behavior. On average, 71 percent of shopping carts are abandoned without a purchase. But what are the unique predictive factors that determine the likelihood of an abandoner becoming a buyer?
Research has told us why visitors say they abandon. For example, Forrester Research asked almost 3,000 people why they abandon, and the top five reasons can be grouped into price and timing objections. But there is another way of looking at the reasons behind abandonment: not what they say, but what they do.
At Shop.org in Boston today, I revealed the results of an extensive study conducted into the behavior of website visitors when they abandon their shopping carts. We analyzed the behavior of more than 600,000 people and 250,000 online transactions to understand what people actually do when they buy, and in particular, their behavior when they abandon.
Surprising truths emerged.
Conventional wisdom suggests that website conversion is good, and abandonment is bad. Yet, the first major conclusion of this research is that not all shopping cart abandonment is bad. In fact, shopping cart abandonment is an important part of the normal buying cycle for many customers, and for many types of purchase.
We found that 42 percent of abandoned carts were abandoned by "serial abandoners" - visitors who had abandoned more than once in the last 28 days. These serial abandoners, considered by many to be "pariahs," abandon 2.4 carts on average over a four-week period. But what is astounding is that almost one in two from this segment will buy (48 percent) when remarketed, compared with only 18 percent of those that only abandoned once. And when they buy, they spend 55 percent more.
This leads to the conclusion that abandonment, rather than being a rejection of the brand's value proposition, can be a step in the decision process for some buyers and for some purchases. We generally expect that higher value shopping carts are abandoned more frequently as customers naturally take longer to consider their purchases. This data supports how some customers will come back multiple times as they consider the purchase, storing items in their shopping carts as wish lists.
The research also exposes some major exceptions to the buying pattern. For example, abandonment rates are very high for lower value purchases, in which the cost of shipping is disproportionately high. Equally, as the value of the cart approaches $100, the abandonment rate shoots up. So, it should come as no surprise that Macy's has recently introduced a flat $99 free shipping rate across its site to combat this phenomenon.
Additionally, the data shows that there is a 25 percent fixed baseline of abandoners who will never return. However, in turn, this leaves an astonishing 75 percent who will either return to purchase, or return to abandon again. These visitors are revealing intent, and the more a site can get them to come back, the greater the chances of securing purchases.
Of new visitors purchasing for the first time, 95 percent will never be seen again, but that 5 percent should not be overlooked. Those who do return are much more likely to abandon than purchase, taking 2.2 abandons for every purchase, compared with 1.3 overall. Yet, this group is also the most likely to buy when remarketed, with a 57 percent recovery rate. So, while they are more likely to abandon, they are also the best prospects when sent recovery emails.
There are several key insights and directives that e-commerce sites can immediately take away from this new research:
First, e-commerce sites need to rethink the way they view abandonment. For many customers, abandonment is part of the normal purchase cycle. This is not restricted only to new customers, but applies across the board, including a site's most loyal repeat buyers.
Second, our research suggests how the role of the shopping cart is evolving and how customers are adopting "permanent" shopping carts as a normal e-commerce feature. We know that carts are used for storing items for later purchase, and this convenience is now reflected in mainstream shopping behavior. For this reason alone, shopping cart persistence should be set to a minimum of 60 days to support these new insights on customer buying patterns.
Third, sites need to consider how to support buyers during their consideration cycle. Getting visitors back to the site dramatically increases the chances of closing a sale. This explains why email remarketing works so well. Rather than looking at customers as lost when their sessions end, remarketing can continue the dialog with the customer and keep them engaged as they go through their consideration process.
Finally, since so few customers return on their own to buy after a first purchase, a "welcome" program should be central to every e-commerce site. Getting new customers to return to the site, even if they abandon as part of their normal decision process, increases the chance of getting a second sale by 300 percent.
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Charles Nicholls is a leading industry expert on ecommerce, web analytics, social media marketing, and online buyer behavior. He specializes in shopping cart abandonment and email remarketing, and serves as chair of the Conversion Academy. He has authored several books: "Lessons Learned From The Top 10 Converting Websites" and "The Science of Shopping Cart Abandonment," set for publication on December 13, 2011. Charles is a market analyst, blogger, commentator and regular contributor to e-commerce, and analytics publications. He is also founder and chief strategy officer at website conversion company SeeWhy.
March 19, 2014