Direct mail helps to reactivate online shoppers that have abandoned their carts
New research reveals that 70 per cent of online shopping baskets are now abandoned before purchase. Additional findings include six in ten retailers not knowing how many people abandon their shopping baskets online and only 27 per cent analysing the browsing behaviour of customers who do not complete their purchase. With eCommerce sales now accounting for a fifth of the UK’s total sales (and predicted to rise to 50 per cent within eight years) understanding how to engage with cart abandoners is becoming increasingly important for retailers looking to bolster their bottom lines.
Determining the reasons baskets are abandoned and rekindling the interest in the chosen products through targeted marketing efforts is a highly effective way of increasing sales and overall revenues for e-commerce providers and stores with an online presence. A commonly used tactic is email-triggered campaigns, predominately because they are cheap and easy to execute. However, interestingly the report revealed that few retailers are currently using direct mail as a channel to nudge potential purchasers into action.
To counteract the perception that direct mail was not an effective re-engagement media, Go Inspire conducted a control test to compare email and postal mail response and conversion rates – and more specifically the incremental value of postal reactivation techniques. In doing so, it aimed to help retailers plan an effective strategy to bridge the abandoned basket reactivation gap and convert more browsing customers into paying consumers.
The results of the test were very revealing. Within a week of product abandonment, a highly personalised direct mail pack was sent to each email-non-responding customer, acting as an additional prompt to encourage them to complete their orders. A successful re-activation triggered email system alone tends to achieve a typical conversion rate of five to seven per cent. However, once followed up with a triggered postal mail, conversion rates from the postal mail activity was in excess of the email activity conversion rate.
Because respondents to the direct mail had not been responsive to the initial email activity, the results of both reactivation activities in combination amounted to more than double the commercial result of reactivation emails alone. The study reveals that there is a section of consumers who do not respond to follow-up emails, but who may very well respond when contacted through the post – and therefore the value of utilising mail as a supplementary channel for reactivation efforts is significant.
To gain a more detailed understanding of the impact of these findings, Go Inspire modelled the results across a number of different online retail market categories to estimate the additional revenue to be gained from triggered postal mail reactivation follow-up for each sector.
For instance, the clothes retail industry sees the largest portion of sales revenue at risk with over £850 million worth of sales volumes which could be lost to other competitors. Whilst the consumer electronics industry is leaving over £657 million in revenue on the table by not implementing hybrid mail basket reactivation. This represents a huge sales revenue at risk for players in this sector. Similarly, by ignoring abandoned shopping baskets, furniture and home-ware retailers were found to be leaving over £419 million in sales to competitors.
Clearly adding direct mail to the reactivation mix makes sense for all types of retailers looking to minimise the impact of cart abandonment on the bottom line. However, to do so it is critical that all the right permissions are in place and that the data being used is clean and up to date.
Mike Fox, Founder of UKChanges