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We have recently performed an in-depth study, analysing over 300 ecommerce sites both in the UK and USA confirming that although the global abandonment rate has actually declined from 73.2% to 70.9%, the number of UK customers deliberately leaving their purchase has significantly increased – estimated to be 15% of those who abandoned, compared to 8% in 2014.

An educated shoppper

Though retailers are becoming more aware of abandoned baskets, their default approach to the issue is to retarget customers that leave by offering them discounts to return. This approach is becoming less about conversion optimisation and more about ‘savvy shoppers’ getting a discount for free, resulting in a reduced profit for the retailers.

Consumers are becoming more aware of the fact that if they leave the site (and have entered an email address) many sites email them automatically with a voucher code to encourage them to return. In fact this tactic was even promoted in a national TV advert for Barclays Bank.

So I shouldn’t retarget?

Retargeting customers if they have left the purchase is certainly an effective of improving conversion rates. However, when these solutions are ‘abused’ by shoppers solely to gain discounts your profitability is impacted.

The key to minimising this type of customer is to focus the offer or voucher and apply a number of filters to help reduce the potential impact. For example:

  • Only retarget new customers – existing customers should be managed through eCRM campaigns
  • Limit discounts to more profitable products
  • Ensure the technology used can apply multiple filters/offers

What’s the solution?

An exact solution is particular to each brand/website. However, we would certainly recommend you review your customer purchase funnel and ensure your shopping cart abandonment rates are below 25%. Though optimising your purchase process won’t reduce the impact of these ‘savvy shoppers’ it will help to reduce overall abandonment rates and maximise conversion rates.

Test the impact

Once the shopping cart abandonment rates have been optimised we would also recommend you test whether or not retargeting brings any added value. Turning the retargeting off for a set period of time will help you to evaluate the approach and may also highlight that ‘real’ customers will purchase – whether they have a voucher or not.

Additional insights

In addition, the research also highlighted a number of points that can impact upon shopping cart abandonment rates. These include:

  • Mobile devices have the highest abandonment rates at 88% – but this has reduced from 92% YOY.
  • 33% of the consumers we asked stated that delivery cost was their reason for not completing a purchase.
  • 23% said that they did not like being forced to create an account before the purchase could be completed and 18% were concerned about security issues.

Summary

Though the existing, retargeting technology is an efficient way of attracting a customer’s return, our recent data suggests that consumers may be abusing this approach in order to obtain a reduction in cost.

Retailers should not focus on rewarding the ones who leave but on trying to stop them from leaving in the first place. The tools, insights and data are available to help improve revenue for all brands.