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Jan 21, 2010 | 5 minute read

Web Analytics: Why Would Cart Abandonment Spike Jan 5 and 6?

written by Linda Bustos

Linda's Note: The following is a guest post by Charles Nicholls of SeeWhy.

The shopping cart abandonment rate is a key metric every ecommerce team should track. When viewed across the ecommerce sector, changes in the abandonment rate give insight into mass changes in behavior which impact every website.

When we examine shopping cart abandonment rates across a large number of U.S. ecommerce sites, viewed in aggregate, the abandonment rate fluctuates wildly, with an expected strong seasonal influence and customer behavioral indications.

Usually it is impossible to correlate your site changes with the changes to conversion. But when viewed in aggregate, it gives you insight into what customers are doing and provides a valuable benchmark when analyzing your ecommerce site’s performance over the same period.

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Looking at the data a bit more in depth, the shopping cart abandonment rate averaged 73 percent in the first two weeks of January, some 12 percent higher than the low of 61 percent recorded on December 16. While the abandonment rate usually falls during the Christmas period, these are still huge swings, reflecting the impact of Black Friday/Cyber Monday deals, public holidays, and January sales.

What’s also revealing in this data is that abandonment rates hit a new season high of 87 percent on January 5 and 6!

This is evidence of the link between abandonment rates and bargain seeking behavior, but it could also potentially indicate widespread out-of-stocks for popular lines.

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When you compare successful conversion volumes with the abandonment rate, it becomes clear that sales on January 3 reached 98 percent of the peak (on 12/8/09) and have been declining fast ever since. By Thursday, January 14, volumes were down to approximately one third of the peak of December 8.

But notice how the abandonment rate peak on January 5 and 6 came after a sales volume peak.

This suggests that customers were actively shopping for deals after the peak on the 3rd, but not finding what they were looking for, resulting in two days of record abandonment on the 5th and 6th. Despite huge numbers of potential customers researching online, these customers have yet to be converted.

Moreover, since this data is based on items placed in the conversion funnel (typically an item is placed in the shopping cart), it’s unlikely that this pattern is a result of out-of-stocks, indicating that there is untapped demand.

Most retailers expect a very quiet second half of January and accept that holiday promotions have pulled volume forward.

Given this backdrop, what can ecommerce teams do about rapidly falling volumes? The data above suggests that customers came in huge volumes in January, but many didn’t buy, either not finding stock availability or the prices they were looking for. Remarketing in all its guises is now a key tactic to beat the post-holiday blues. Here are five tactics you can use now to convert customers and beat the January blues.

1. Get the basics right. Email the house list with items on promotion which are in stock, and when popular lines that sold out become available again, focus your email campaigns around these items. Be careful not to include items likely to go out of stock quickly if featured prominently in your campaign. Save these items for more targeted campaigns (see 4 below).

2. Remarket to shopping cart abandoners. It should go without saying that triggered one-to-one emails to customers that almost purchased are one of the most profitable types of campaigns that you can run. It’s still astonishing that so few retailers follow up abandoned carts effectively. Retailers who do report that these campaigns are typically 10x more profitable than batch-based customer email campaigns. Ultimately, if widespread optimized follow-up programs were in place already, then we wouldn’t have seen such a sharp drop off in sales since January 3.

3. Extend free shipping. The research above shows that large numbers of customers are out there who almost purchased, but something held them back. We know that there is a very strong correlation between the website conversion rate and promotions. The most popular type of promotion with customers is free shipping. Consider extending free shipping offers through the end of January, potentially in stages, if you have not already done so.

4. Targeted offers. If you have the ability to segment your customers based on browsing behavior, now is the time to do it. Highly targeted, specific promotions—segmented by visitor behavior and product interest—will score well. Focus your best promotions on those who’ve shown great interest in particular products, and if you have limited stock, make it clear that you expect to sell out imminently. Remember that customers don’t want to miss a genuine bargain, and this may be the call to action needed to get the conversion.

5. Social media. While many marketers used Twitter and Facebook to publicize their holiday season offers, most have stopped promoting their offers via social media. For example, promotional Tweets are now at only 11 percent of their post-Christmas peak. Maybe it’s old hat, or you feel that there’s only so many times that you can tweet about your promotions, but there’s always a fresh spin you can put on it with a little creativity. Let’s get those promotion codes and offers out there again.

Web analytics visionary Charles Nicholls is founder and chief strategy officer of SeeWhy and author of “In Search of Insight” which has established a new agenda for the analytics industry. As a veteran of the analytics space, he has worked on strategy and projects for some of the world’s leading ecommerce companies, including Amazon, eBay and many other organizations around the globe. Incorporated in 2003, SeeWhy helps companies improve website conversion rates by bringing back up to 50 percent of visitors that abandon sites prematurely. Check out Charles' Website Conversion Blog or follow him on Twitter at @seewhyinc.