When we first launched our remarketing service in 2009, Randy Stross wrote a piece about email remarketing in The New York Times suggesting that while remarketing might be a great idea for ecommerce websites, it’s not a great idea for consumers. He likened emails following up on abandoned shopping carts to a salesman chasing you down the street if you didn’t buy from his store.
There are major differences, of course. We’ve long argued that remarketing emails, when done well, not only drive conversions but also build brand trust.
They can deliver great service and provide customers with the confidence to return to buy—either online, by phone or in store. If Randy was right and customers universally resented the intrusion, then these emails wouldn’t work.
In aiming to answer the question more substantively, I turned to data, and specifically email marketing benchmarks.
The key metrics to look at to determine whether customers like or loathe remarketing emails are:
(1) the recovery rate
(2) the open rate
(3) the clickthrough rate
(4) the unsubscribe rate
Frankly, the evidence is overwhelming: Remarketing, when done well, is appreciated by customers. Here’s the evidence:
(1) The recovery rate
The recovery rate is the percentage of visitors that abandon shopping carts, and remarketed visitors that then return and purchase following remarketing. At SeeWhy, we measure recovery rates across all our customers, and currently the average is 20 percent.
So, one in five shopping cart abandoners come back and buy, having being remarketed. In some cases, the recovery rate is as high as 50 percent. Moreover, when remarketed customers buy, they spend on average 55 percent more than customers who didn’t abandon their shopping carts.
(2) The open rate
The average email open rate for remarketing emails is currently 46 percent, more than double the benchmark open rate of 22 percent for all email campaigns. (…)
New research shows that email remarketing drives higher order values, showing increases of as much as 55%, and that the majority of customers who are going to buy as a result of a remarketing campaign, will do so within 24 hours of abandoning a purchase.
The SeeWhy Research team set out to answer these key questions: When visitors abandon their shopping carts, and they receive a remarketing campaign, what do they do? How many come back and buy? When do they buy? And how much do they spend?
Based on this research, which covered a sample of more than 65,000 recovered shopping carts, this is what happens after the remarketing campaign is launched:
1. Recovery rates
The average recovery rate for each ecommerce site in the sample was 19.8%, which translates into an average revenue recovery of $2.2m per site. Recovery rates ranged between 6% and 50%. The significant differences in the recovery rates can be attributed to:
• The types of products being sold by the different sites
• The number of remarketing emails used
• The timing of the campaign
• Campaign creative
• Promotions – only 1/3rd of campaigns used a promotion
The recovery rate is calculated as a percentage of visitors who abandoned their shopping carts and were subsequently sent a multi-stage email remarketing campaign. In all cases the first email was sent immediately following the abandonment, in line with best practices. [Multiple studies have shown that a real time follow up is critical – for example an MIT study showed that 90% of ecommerce leads go cold within one hour.]
2. Time to conversion, following remarketing
In the 24 hours following a shopping cart abandonment, 54% of those who are going to buy, do so in the first few hours. By 48 hours, the proportion has climbed to 64%. (…)
So far in 2010 Shopping cart abandonment rates have been 7% higher compared with 2009. So it was with great interest that we were watching online customer behaviour over Black Friday, the holiday weekend and CyberMonday, traditionally the biggest online shopping weekend of the year. Studying the industry-wide conversion and shopping cart abandonment rates give insight into buyer behaviour and in particular what and when makes browsers become buyers. There are several key lessons to be learned from looking at this data.
The holiday shopping weekend didn’t disappoint this year – estimates suggest that sales were up by as much as 20% over 2009 on CyberMonday, which is great news for the ecommerce sector as a whole. We will also need to see if this growth was distributed evenly across the sector, or like last year, concentrated among the largest and best known e-retailers such as Amazon, Target and WalMart.
Let’s take a look at shopping cart abandonment rates leading up to CyberMonday. In the chart below you can see three key trends suggested by the data:
(1) Average shopping cart abandonment rates are higher than in 2009
(2) In the pre-season, the highest shopping cart abandonment rates happen at the weekends
(3) Purchases were deferred leading to weekend spikes in the abandonment rate until the 2nd week of November when the majority of holiday offers were rolled out
What’s interesting about this season is that it appears that immediately after Labor Day shopping cart abandonment rates peaked at all time high for 2010, hitting 95%. But by the beginning of October rates had stabilized to more ‘normal’ levels, ranging between 68% and 78%, with peaks on the weekends, especially Sundays. You can see this pattern in the data – the humps are the weekends.
Weekend browsing followed by shopping cart abandonment shouldn’t be a surprise – we saw the same pattern last year – and when buyers have time on their hands, they are more likely to comparison shop. (…)
Online retailers roll out holiday promotions this week to combat high shopping cart abandonment rates.
Two thirds of online retailers are rolling out holiday promotions this week or have already done so. 61% of holiday promotions this year will be focused around free shipping, and 29% on promotional discounts. Multi-buy and free product offers will account for only 10%. (…)
Recovering abandoned shopping carts and web forms is a lucrative business. On average 70 percent of shopping carts and 56 percent of web forms are abandoned before completion. In an effort to win these customers back, retailers employ email remarketing campaigns that should recover on average between 10 and 30 percent of abandoners. That translates directly into significant incremental revenues.
When it comes to email remarketing, one question that I get asked fairly regularly is about what is needed to ensure compliance with CAN-SPAM in the U.S. and the European Privacy Directive in Europe when setting up a remarketing campaign. The situation is really straightforward in the U.S. (it comes down to little more than checking your privacy policy), but it is slightly more complicated in Europe.
Website conversion rates are bandied about the ecommerce industry all the time, and despite many being familiar with the concept, I consistently find that a lot of people are a bit fuzzy on their website conversion and abandonment rates. This blog is intended to define the different website conversion rates and explain how to use them—and how not to. (…)
‘Have we conditioned most customers to the point that they expect discounts and won’t buy without one?’
This is a great question, and it’s worth considering in more depth. Recent research shows that coupon redemption is at an all time high, and at the same time, Ben Bernanke warns that the economic recovery is fragile and taxes will inevitably have to rise. It’s no wonder that customers are nervous and cautious. (…)
As more website visitors become more experienced online, even more visitors will abandon their shopping carts, and online comparison shopping will become ever more commonplace.
A new shopping cart abandonment study by Forrester Research shows that these trends are on the rise. According to the report, website visitors that abandon shopping carts are also 84% more likely to research online to ensure they get the best price. (…)
In Parts 1 and 2 of this series, I wrote about how the Top 10 Converting Websites achieve spectacular website conversion rates by driving repeat sales and through superior merchandising.
The final major conclusion of the SeeWhy /Nielsen research (published in an eBook titled ‘Lessons Learned from the Top 10 Converting Websites’) is that the top ten converting websites ALL use remarketing.
This is remarkable since our research shows that only 26 percent of ecommerce sites use remarketing.
Remarketing is one of the most effective techniques to boost website conversion rates and is arguably the most profitable marketing technique. Website visitors are ‘remarketed’ based on their browsing behavior — using email, direct mail, or in the case of anonymous visitors, advertising. Of these techniques, email is by far the most cost effective, and the top ten converting websites make use of the email address captured on your first site visit whenever possible. (…)
When we first launched our remarketing service in 2009, Randy Stross wrote a piece about email remarketing in The New York Times suggesting that while remarketing might be a great idea for ecommerce websites, it’s not a great idea for consumers. He likened emails following up on abandoned shopping carts to a salesman chasing you down the street if you didn’t buy from his store.
The recovery rate is the percentage of visitors that abandon shopping carts, and remarketed visitors that then return and purchase following remarketing. At SeeWhy, we measure recovery rates across all our customers, and currently the average is 20 percent.
The average email open rate for remarketing emails is currently 46 percent, more than double the benchmark open rate of 22 percent for all email campaigns. (…)
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