This is to be the first part of a 3 part series where I look at Abandonment as an eCommerce concept and whether you have a good sense of what your abandonment is and how to monetise it.
What is it?
The good news is you probably know what your abandonment is, it’s an easy number to work out because it is the opposite of your conversion rate. You are probably also aware of it as a concept but how many of you are actually putting a number to it? Numbers and KPIs are important, they create specific measurables and focus our minds towards deliverables, so taking the concept of abandonment a step further to quantify it as a number is important.
Why is it Important?
So let’s say that a good industry standard conversion rate is 2/3% (a metric provided by Big Commerce), this is actually saying your abandonment is 97/98% and no matter how many times I’m going to hear that metric, I’m just not going to be happy about it despite being told the I’m achieving an industry-standard conversion rate. Being uncomfortable in business is important to compel us to improve, especially in industries like eCommerce, which are changing so rapidly, staying uncomfortable is important and knowing you have a high abandonment can certainly help focus your attention.
Imagine you were a high street retailer in a great location and getting plenty of footfall, every hour you get 100 visitors to your store but 98 of them walk straight back out without buying. There’s no way as a store owner you would stand by without taking any action, instinctively you would go ask the fleeing shoppers why they weren’t buying. Was the product not very good? Was it too expensive? Was it a bad shopping experience? Yet many of us don’t behave that way for our websites, because they’re not physical entities and we can’t see the visitors leaving we’re not compelled to act and try and understand why they’re leaving in their droves.
The important penny-dropping moment for me that came from reviewing the amount of abandonment taking place on my site, is realising that the value of your traffic goes beyond what you’re making in daily transactional sales. There is potentially huge value to unlock in monetising the traffic by capturing the customer data, either through directly acquiring their email address or by at least being able to re-market to them as their journey continues around the internet.
By focussing on growing your email subscriber base as much as you focus on making sales you create your own engine of future growth within your eCommerce business. Constantly having to go back to outbound marketing tactics such as search engine marketing to acquire new customers (to only convert them at 2%) can become a very expensive business, you need to keep as many of the leads you generate warm until they are ready to convert.
Some Stats for You
- Industry conversion rates are 2-3%
- 60% of carts get abandoned, which means that 7-8% of visitors get to the checkout and therefore 92% of traffic leaves the site without adding an item to their cart
- Industry-standard is that websites acquire 3-5% of subscriber information from their traffic
So despite up to 8% of traffic reaching the checkout the industry standard for email acquisition is only up to 5% and the best marketers can get up to 18%, almost 4 times the industry standard.
Why Do People Abandon Sites
There are many, many reasons why people abandon sites and you will all have your own personal experiences as to why it might happen, below is a list of some of the most common reasons given in a SaleCycle survey from 2016.
- Browser traffic – “I’m just looking thanks”… there’s a lot of window shopping online
- Price sensitivity. Again the online shopper is predisposed to being a bargain shoppers
- Expired promo codes
- Bad User Experience
- Cross-Device Shopping. A common problem these days as users start their journey on a phone but will convert on a laptop.
- Login Problems. Forgotten account passwords at the checkout stage must be one of the more infuriating ways to lose potential custom
What you can start to see here is that there are 2 types of abandonment cart abandonment and browser abandonment and the tactics we need to deploy to reduce them must be hard or soft depending on their nature.
The Abandonment Recycling Process
So let’s visualise the problem by reviewing the user journey on the website….
At each of these stages, visitors are leaving the site in massive quantities and we need to think of tactics to recycle the traffic back into the site. Hard and soft tactics should be used to do this and this should depend on how likely the visitor is to become a customer. The closer they are to the checkout and how much they spend on the site should help to determine this.The opposite is therefore true of those that spend little time on the site, if they are amongst the 30% that tend to “bounce” off on their first page, we should behave a little more “to the point” in order to retain their custom. And we’ll explore these ideas in more depth in this upcoming series of blogs.
What can be done about it
In the next part of this series of blogs, we’ll explore cart abandonment in more detail and some best practice tactics for reducing it.