Now that Labor Day is behind us, between now and Cyber Monday consumers will fundamentally change the way they shop online. The majority will now defer their purchases in anticipation of the upcoming holiday deals. This is based on analysis of more than $1bn of ecommerce transactions for each of the last two years. The most obvious indicator of this change in buying behavior is illustrated by the shopping cart abandonment rate. This is a critical ecommerce metric which measures the proportion of shoppers that added items to an online shopping cart but didn’t purchase. In 2011, 72% of all potential ecommerce purchases were abandoned; only 28% were completed.
But after Labor Day everything becomes more extreme.
Last year, the shopping cart abandonment rate hit at an all-time daily high of 89.2% on November 23rd. And it’s a safe bet that we’ll see 90% this year, on November 21st to be exact, the day before Thanksgiving.
Practical actions for Brands
Recognizing and understanding this shift in consumer behavior is the first step in reducing shopping cart abandonment. Beyond this there are four simple actions that merchants can take to encourage customers to commit earlier:
- Capture more email addresses
The number one reason consumers will subscribe for email updates is to get special offers and promotional codes. The number one place that customers look for holiday offers is email. Now is the time to remind customer of the benefit of subscribing to your email program. Make it clear that signing up for emails will means that they will get holiday deals first.
- Mobile abandonment is not a problem
When consumers use smart phones, tablets and PC’s, for e-commerce, each device plays its own role in the purchase process. Think about how you personally use them: mobile devices are most often used when away from the home to look up information quickly (store locations and price checking), and tablets are often used for researching potential purchases, typically from home, and for browsing and exploring. And PC’s are where most purchases are actually made. Don’t get alarmed by a 97% abandonment rate on mobile devices: it’s a normal part of the buying process. What will help consumers most are mobile optimized sites that focus on getting key information quickly, such as store locations, prices. Don’t waste time on trying to make the mobile checkout process easier – that’s a project for the future when mobile payments are fixed.
- Free shipping is essential
Consumers don’t want to pay for shipping. It’s the number one reason why shoppers abandon their shopping carts, and one of the key reasons why purchases are deferred in anticipation of holiday offers becoming available. According to Comscore, last year 64.4% of transactions in Thanksgiving week had free shipping, this year it will likely be higher. You can also leverage minimum order free shipping, such as free shipping on $99 purchases, in advance of the roll out of holiday offers to encourage customers to purchase early. This technique can be very effective, but choose the free shipping threshold carefully. It needs to be at a point where the brand can make money, however it’s also worth remembering that the shopping cart abandonment rate shoots up when the shopping cart hits $100. So a free shipping offer at $99 will keep customers total order value below the critical psychological ‘three digit barrier’ and help to drive conversions. A side benefit of this type of program is that brands often see up to a 30% increase in average order value when running a minimum order free shipping offer. In some cases this increase in order value will pay for the promotion.
- Use gentle nudges to drive conversions
When customers don’t buy, nudge them. Gently. Reminding abandoners that there are still items in their online shopping carts is remarkably effective: you should be able to recover between 10% and 30% of abandoned shopping carts by sending a sequence of gentle nudges by email. The secret here is to stay focused on that all critical buyer behaviour: the visitor abandoned because of price objections or because they were not yet ready to buy. Focusing on delivering great customer service reinforces your brand values and gives you a second chance to get the sale. This is where your free shipping offers will kick in to bring in deals earlier.
If you would like to learn more, please join me for the live event, 5 Cyber Monday Conversion Tactics, on Thursday, September 27th. I will be discussing buyer behavior changes in further detail, as well as provide 5 easy-to-use marketing tactics to drive more conversions over the 2012 holiday season.
This original version of this article was written for Forbes as: The Shock of Cyber Monday: The Secret To Understanding Consumer Behavior.