People often become concerned at the number of shopping carts that are abandoned. ‘Abandonment ‘is rarely defined. It may be the ratio of abandoned shopping carts to completed purchases – certainly this is the intuitive definition. It has been defined as visitors who purchased goods and later cancelled them, and even as visitors who entered an online shop but left without making a purchase. Back out on the high street, what is the most appro- priate comparison? If only 60 per cent or 80 per cent of a shop’s footfall – the number of people entering the shop – made a purchase, many businesses would not survive, but if 20 per cent or 40 per cent of window shoppers – people walking past on the pavement and looking towards the shop’s displays – came in and
made a purchase, we would see some very happy retailers. So are abandonment rates of 60 to 80 per cent really such an issue?
Of course, if a company’s defined abandonment rate has been 60 per cent, and it has risen to 80 per cent, then that is a genuine cause for concern and investigation. However, even this may simply be the result of effective promotion, which has increased the audience, with the result that a number of interested enquirers find that the products are not quite what they were looking for.
In analysing the abandonment rate, it is important to look beyond the raw headline statistics, and to analyse trend data in a number of different ways. For example:
• How many items are either in the average completed basket, and what is the ratio to the number of items in the typical aban- doned basket?
• If there is an option to store a shopping basket’s contents, is the proportion of visitors returning to retrieve their baskets rising or falling?
• What is the profile of items in baskets where the purchase process is completed compared to the profile of items aban- doned? Are shoppers who abandon their purchases simply compiling a wish list of high-ticket items?
• Is there a difference in the profiles of browsers and visitors who complete their purchases? Perhaps there are visible differences in how they use the Web site. Do they enter at the shop’s front door (the Web site’s home page) or at a lower level page that they might have bookmarked on an earlier visit? How many pages do they view on their way to the purchasing area of the site and what proportion of pages and items that they look at within the shop are placed in a shopping basket?
• Can visitors who compile the shopping basket and abandon it be tracked to another sales channel? There is evidence from major retailers in the UK and USA that both catalogue and high street store buyers spend more if they are also visit the retailer’s Web site.
Alongside abandonment, there will be a natural attrition rate among customers. Typically, there are three potential attrition rates that could be measured:
• the percentage of existing converted purchasers that has stopped shopping;
• the percentage that has stopped visiting;
• the percentage that has stopped receiving newsletters.
Some customers may simply downgrade their status, for example visiting an online store less often but continuing to receive newsletters. For customers such as these it is extremely important to attempt to understand whether or not they continued to purchase through other channels. In the not-too-distant future smart cards containing digital security chips and certificates that verify personal information will solve the problem of recognizing one customer across several channels. Customers confirm their identity simply by using credit or bank cards. So long as the company is running one database for all of its sales channels, they will be able to recognize each individual customer in each sales channel. Until then, a single central database is the largest building block that can be put in place. For some companies, product guar- antee cards are the most used customer-benefit-led devices to recognize customers who appear in different sales channels.
It is possible to communicate more effectively by taking a multi- channel view of the communications that were sent to customers and of where they choose to shop,. Should customers be sent printed catalogues and e-mails? Does this combination raise store traffic, telephone calls or online Web sales? If a direct mail item is being sent to a customer, does it help to preview the printed post with a piece of e-mail? Or should the e-mail be sent afterwards? If the company has one database that provides a single view of the customer, these issues can be addressed. From the company’s perspective, wastage is reduced and those communications that are sent out become more effective. Moreover, customers receive, hope- fully, the combination of communications that gives them the right level of information.
Do wish lists dramatically reduce abandonment or just defer it?
How much analysis is undertaken into the relationship between shopping baskets and wish lists? By introducing a wish list, does your company’s ratio of aban- doned shopping baskets fall – and is there a complementary rise in the number of wish lists?
Dabs.com’s wish list complements its shopping basket – and is easy to find from product information sheets. However, it is almost invisible from anywhere else – meaning that returning shoppers have to find a product (any one will do) before they can see the contents of their wish list.
Figure 8.1 Dabs’ wish list service presents itself alongside product searches