Operations

Recovering lost revenue: A brief history of abandoned cart emails

Shopping cart abandonment equals lost revenue. With more than two-thirds of carts abandoned, there’s a huge opportunity to win back customers—which is why abandoned cart emails are one of the most powerful tools an eCommerce company can use.

Thankfully, using automated email marketing platforms like Jilt, companies can craft a personalized series of emails to gently nudge customers back towards their carts. These cart abandonment recovery campaigns remind the customer of their original purchase intent and often offer up discounts or coupons as an incentive for customers to reconsider. That wasn’t always the case.

These complex campaigns are only possible with the wealth of customer data that eCommerce companies now collect, and modern automation technologies that allow these emails to run on autopilots using triggers based on customer behavior.

Let’s take a look at how abandoned cart emails got their start and how this technology evolved to give companies more access to customer information, as well as more opportunities to do something with it.

Before 2002: The cart abandonment survey—A time before accessible customer information

Online shopping in the late 1990s and  early 2000s was very different from what it is today. Amazon had only been around for a few years and much of those early years were spent as an online bookstore. At one point, Beanie Babies accounted for ten percent of eBay’s sales (yes, you read that right). To say that online shopping was still a niche market would be an understatement.

But even in this primordial eCommerce market, cart abandonment was still an issue. A 2002 survey found that abandonment rates could be as high as 67 percent, which is right in line with expected rates today. When eCommerce retailers realized how much of an impact this had on their revenue, they decided to find a way to win back these lost customers. These first attempts came in the form of a cart abandonment survey, which was triggered in the browser whenever a customer tried to navigate away from their cart before finishing the purchase.

Example cart abandonment survey via eSurveysPro.

Depending on the answer a customer gave, eCommerce retailers would follow up with additional questions to help clarify the issue. The customers had to manually enter information via the survey in their browser.

Example follow-up cart abandonment survey via eSurveysPro.

These surveys provided the retailer with enough information to see what factors were causing the customer to leave their site without finishing their purchase.

Cart abandonment survey answers via eSurveysPro.

Just like today, high or unexpected shipping costs were a major driver of cart abandonment. (This is one of the reasons Amazon eventually launched its Prime service, which has been a major driver of its growth.) But there were issues in the usability of checkout flows and access to personal information as well:

  • Checkout process is too long (44%)
  • Checkout requires too much personal information (35%)
  • Checkout process is confusing (27%)
  • Site requires registration before purchase (23%)

This meant that retailers were not only fighting against logistical issues like shipping costs and site usability, but the perception of wanting too much information from their customer. More on this later!

While manually completed surveys did provide eCommerce retailers with additional information on the psychology behind why customers were abandoning their carts, they did not provide an easy way to follow up. In the next section, we’ll take a look at how advances in technology and changing customer perceptions around ownership of personal data paved the way for the first cart abandonment emails.

2002 – 2009: Strategic remarketing—The birth of abandoned cart emails

Retailers recognized that the information they collected through their abandoned cart surveys was valuable in determining why customers were abandoning their carts, but they needed to find a way to win them back faster. Enter the abandoned cart email.

It was fine to send a manual email to people who responded to their survey, but in 2003, eCommerce retailers that wanted to automate the process had to build their own abandoned cart flows. This meant that they needed to have the technical acumen to create an automated email, as well as a way to capture and store customer information.

Code snippet example for open-source abandoned cart series via oscommerce.

It was a common practice for online shops to store customer information as a browser session, meaning that once the session was complete, it would likely be deleted, losing the content of the cart, as well as important customer information. People building their own workflows at this time decided that it would be more beneficial to store this information in a database instead. This was in line with current trends in eCommerce and, as companies started to collect more customer data, it became easier and easier to trigger automated abandoned cart email campaigns.

In the following years, these one-off and ad hoc solutions were refined and commodified. Transactional email service providers started to form, and by 2008, most eCommerce companies had realized the potential of these abandoned cart emails.

An Experian study called “The remarketing report” was one of the first to break down the benefits and best practices of abandoned cart campaigns, including information on the effects of personalization and relevant customer information. By this time, there was potentially $18 billion in revenue that was lost to cart abandonment and eCommerce retailers were starting to refine the processes.

Abandoned cart email types via Experian.

Analysis into the effectiveness of certain campaigns found that abandoned cart emails resulted in more than twenty times the transaction rates and revenue as other email marketing. These stats show that including personalized information also boosted open rates significantly, as did the inclusion of an additional offer.

Abandoned cart email examples via getelastic.

The types of emails being sent at this time ranged from simple reminders to discount offers meant to entice customers to finish their orders. According to Experian, the most common practice was to send a single email within the first 24 hours of a cart being abandoned, but potentially waiting two to three days could also be effective.

The inclusion of more customer data—like the actual contents of the abandoned cart—showed a measurable increase in conversion rates for abandoned cart emails. With more information, online sellers were able to give their customers a personalized experience even after they left the site.

2009 – Today: Automated campaigns—The future of abandoned cart emails

Abandoned cart campaigns are currently the highest converting eCommerce email marketing campaign type according to Barilliance, with an 18.64 percent conversion rate. That means that business owners can potentially recover a significant amount of lost revenue. In fact, some estimates peg the total amount that could be recovered via this campaign type (along with checkout optimizations) at over $260 billion.

Today’s customers more or less expect to receive a cart abandonment email if they leave an eCommerce site before completing their purchase. Some customers are even counting on it. One way to find additional coupons or discounts is to wait for the cart abandonment series to kick in. That’s a trade-off many shops are more than happy to make, since a discounted sale is better than no sale, as long as they’ve kept discounts comfortably within their margins.

While these campaigns are now considered one of the most effective and a best practice for every eCommerce company, the psychology behind why a customer abandons their cart hasn’t really changed.

Reasons for cart abandonment during checkout via Barilliance.

Shipping costs are by far still the most popular reason customers use for abandoning their carts, followed by the need to create an account and a drawn-out checkout process. While the technology behind sending these emails has changed drastically in the past fifteen years, the customer psychology has not.

One thing that has changed: Campaigns that include multiple emails are now the standard for most eCommerce retailers. Further, advances in technology now allow these campaigns to be automated, triggered by customer behavior and segmented and personalized based on customer data. 

These campaigns are much more sophisticated than they were even just five years ago. Online retailers can now run multiple versions of their abandoned cart campaigns, with copy customized for different products or categories, for high dollar versus low dollar customers, or for first time or repeat shoppers. 

Cart abandonment series from Uniqlo.

There are three emails in this abandoned cart series (above) from online clothing retailer Uniqlo.

  • First email – Sent out shortly after the cart is abandoned to remind the customer that items are waiting.
  • Second email – Sent out 24 hours later to let customers know this is their “Last chance!” to order.
  • Third email – Send out 48 hours later. This is the final “last chance” a customer will get before the items are removed from their cart.

Each email in this series ramps up the feeling of urgency for the customer and gives them a definite end date for when they’ll still be able to complete the original order.

First, second, and third cart abandonment emails from Uniqlo.

Their first email gives the customer an opportunity to checkout immediately, which decreases the effort it takes for them to complete the purchase. The second subtly lets the customer know that they might lose out on items if they don’t take action now, and the third gives them a final warning. Each of these play on the customer’s psychology by either decreasing the work it takes to complete the order or amplifying the messaging about “losing out.”

Other types of abandoned cart emails provide an incentive to help entice a customer back to the cart.

Brooklinen free shipping offer via Really Good Emails.

The abandoned cart email pictured above uses the offer of free shipping. Depending on the niche, product, and price, there are a number of different ways to tailor these campaigns to specific customer segments.

With the amount of customer data eCommerce companies have, today’s abandoned cart emails are more persuasive than ever. While customers will still abandon their carts more than half of the time, retailers have more tools to help recover some of that lost revenue.

Building your own abandoned cart campaign

Over the past fifteen years, abandoned cart technology has changed significantly, starting with manual surveys to determine the reasons why a customer left their cart, followed by manually sent follow-up emails, then evolved to automated, single email campaigns, and finally to today—where multi-email campaigns, segmented and customized using available customer, data are the norm.

In setting up these types of campaigns, eCommerce retailers are able to recover the revenue that otherwise would have been lost to an abandoned cart.

Jilt helps thousands of eCommerce shops save abandoned shopping carts through strategic lifecycle email campaigns and customer segmentation. Start your free trial today!

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