Finders, retrievers: reactivation of abandoned baskets via direct mail

The marketing sector can be a complicated place as new marketing tools and techniques are launched, almost on a weekly basis. Powered by The Drum Network, this regular column invites The Drum Network's members to demystify the marketing trade and offer expert insight and opinion on what is happening in the marketing industry today that can help your business tomorrow.

Go Inspire Group provide some tips for marketers on how to convert abandoned baskets into healthy sales.

In a world where e-commerce delivers an increasingly significant proportion of total transactions, it remains extraordinary that many retailers leave the issue of abandoned baskets under-investigated. Today, a staggering 70% of online shopping baskets are abandoned before purchase, according to our The Abandoned Basket Reactivation Gap report (September 2019).

Despite that, six in ten retailers do not know how many people abandon their shopping baskets online and only 27% analyse the browsing behaviour of customers who do not complete their purchase. Understanding 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.

At media-neutral Go Inspire Group, we decided to conduct research – over three months across a customer base of around 200,000 - on the value of abandoned e-commerce baskets and the effectiveness of reactivation techniques. Email triggered campaigns to reactivate abandoned baskets are well-established, however too many organisations fail to add triggered postal mail reactivation to email non-respondents. The key question, then, is why – in an omnichannel world – are abandoned basket reactivation techniques only focusing on online and electronic communications?

In the current market climate, email is regarded as cheap and postal mail often mistakenly thought of as not offering a good enough return-on-investment. Although digital print allows multiple document variations to be printed at high-speed ‘on the fly’ and mailing costs can be minimised by using a technique known as ‘hybrid mail’, retailers are sometimes reticent to include traditional mail in their media strategy.

Testing solutions

Hoping to provide objective data to guide retailers in their marketing decisions, we had a media-neutral control test conducted to compare email and postal mail response and conversion rates – and more specifically the incremental value of postal reactivation techniques. In doing so, we aimed to help businesses 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 for marketers. Within a week of product abandonment, a highly personalised yet automated mailing 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 5-7%.

Once followed 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 postal 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. Evidently, there is a section of consumers who do not respond to follow-up emails, but who may very well respond when contacted through postal mail – and therefore the value of utilizing all available channels for reactivation efforts is significant.

To gain a more detailed understanding of the impact of these findings, the results were modelled across a number of different online retail market categories in the UK 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.

The consumer electronics industry alone 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 homeware retailers could be leaving over £419 million in sales to competitors. While many retailers may ignore the mysterious case of the abandoned basket, savvy retailers will cleverly leverage communications with those customers to effectively turn these semi-neglected items into sales that they would otherwise lose.

Finding answers

The first step for businesses to improve their abandoned basket reactivation rates and start tapping into the retrievable value of discarded purchases, is to start gaining insight into customer behaviours and gathering data surrounding abandoned baskets. Retailers should be able to pinpoint when their website sees the highest level of basket abandonment, whether they are losing more sales to men or women, and to which age group the most sales are being lost. Next, marketers must exploit all available channels when implementing reactivation strategies and should not underestimate the power of a polite nudge through the mailbox to edge consumers towards the check-out line.

Previous research has already highlighted the dangerous myopia of only using electronic media to reach a consumer audience, and the importance of utilizing multiple channels to achieve an optimum commercial result. Evidently, this also applies to abandoned shopping basket reactivation techniques. If seven in every ten online shopping baskets are abandoned by the shopper, retailers who fail to implement an effective reactivation system will be letting go of a vast sum of retrievable value.

By reactivating a greater proportion of abandoned baskets, users of hybrid mail stand to win a higher proportion of consumer spend in their categories than those who stick to e-mail techniques alone.

Nick Cole, managing director at Go Inspire Group.

Join us, it's free.

Become a member to get access to:

  • Exclusive Content
  • Daily and specialised newsletters
  • Research and analysis

Join us, it’s free.

Want to read this article and others just like it? All you need to do is become a member of The Drum. Basic membership is quick, free and you will be able to receive daily news updates.