Survey: Online Retailers Are Not Addressing the $18 Billion Cart Abandonment Problem
Listrak surveys reveals less than 15% of online retailers have programs to recoup lost revenue
LITITZ, PA, July 7, 2010 – While industry experts estimate that shopping cart abandonment is an $18 billion issue, online retailers continue to ignore it[1]. According to a Listrak study that surveyed 200 US online retailers, less than half of all e-retailers are monitoring the amount of lost revenue due to cart abandonment and fewer than 15 percent have a strategic program in place to recoup these sales.
Shopping Cart Abandonment is one of the biggest issues facing online retailers today. Abandonment rates are reported at 51% to 65%, by Forrester and eMarketer respectively, yet most e-retailers are not addressing the issue. In fact, a mere 14.5% of the internet retailers surveyed have a program in place to recoup revenue from abandoned carts. And worse yet, 58.8% don’t even have a grasp of what their cart abandonment rate is or how much revenue is lost. While the percentage of retailers addressing the issue has gone up from 10.5% since August 2009, as reported by Internet Retailer, implementation of cart abandonment strategies has been incredibly slow, even though it’s proving to be an extremely effective way to recoup revenue and customers.
“It’s astounding that so few e-retailers have a shopping cart abandonment strategy in place when the resulting revenue and customer re-engagement is so great,” says Ross Kramer, CEO of Listrak. “Email is the most effective marketing channel with the greatest ROI and automated cart abandonment campaigns follow suit in being the most cost effective way of closing sales and increasing revenue.”
The average ecommerce site has a visits-to-sale conversion between 1-2%, but all the data shows that conversion rates increase significantly with an existing customer as compared to a new customer. That data underscores the importance of converting sales from visitors who have initiated the check out process. Automated shopping cart abandonment campaigns are proven to produce 10-20 times the conversion rate of a typical email campaign. As one example, Movies Unlimited, the largest online movie retailer, has an automated campaign in place that achieves a 13% conversion rate. The campaign generates 10% of the company’s email marketing revenue while accounting for only 1% of the volume.
All the trend data points to the continued abandonment of online shopping carts, resulting in significant ongoing revenue loss for e-retailers. To learn more about implementing an automated campaign, including how, when and what to send, download this free whitepaper, Recovering Lost Sales through an Automated Shopping Cart Abandonment Strategy.
About Listrak
Listrak is an email marketing firm providing the solutions, software and services to optimize the value of email. Listrak works with online retailers to develop engaging email marketing to deliver the extra percent in effectiveness and ROI.
[1] http://www.permuto.com/blog/2010/06/17/the-ins-and-outs-of-the-abandoned-cart/