Let’s start with understanding the mindset of a consumer and your social media brand. 
Consumers ‘friend a brand’ for these primary reasons: 
•    to give feedback, praise or complain
•    for service 
 but the largest reason by far is to receive special offers and promotions.
 
This represents a massive opportunity for online retail and consumer companies. But no one is really taking advantage of it. For the first time, brands can identify, engage and recognize their advocates. Your fans have sought you out and are proactively ‘opting in.’ They want engagement and specifically are looking for special treatment, offers and promotions. What a gift horse!
 
There’s lots of evidence that demonstrates that, for online marketers at least, 2010 will be the year of social media marketing.
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Amazon is a fierce competitor. First they mastered logistics. Nothing was higher priority than getting the order fulfilled; even the most senior managers were drafted into the warehouse at peak periods. Amazon also mastered user interface, data analysis and showed the world how remarketing should be done in the interests of a long term customer relationship.
 
The day they announced Z-shops (now Amazon marketplace) signalled a massive expansion in their ambition. The day Amazon announced free shipping for all purchases, their stock price may have been hit as they put a multi-million dollar change against earnings, but it signalled the start of a new battle, the full effects of which we are only just beginning to experience. They also demonstrated that Amazon plays the long term game, and is willing to suffer short term pain for strategic ends.
 
This week, I speculated that for many categories of goods, always-on free shipping is inevitable, and that the e-commerce sector needs to plan for its arrival.
 
This prompted an angry outburst:
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When a website visitor drops items into your shopping cart, they are demonstrating intent to purchase. You’d be forgiven from assuming that most of these visitors would carry out their intent and complete the transition. But as we all already know, on average about 7 out of every 10 shopping carts are abandoned.
 
So it’s useful to understand more about the reasons for this behavior. Why did your visitors abandon, and if they did, how strong was their intent to purchase at the outset? Did all visitors have the same degree of intent, or did some never intend to make a purchase at all? What were these visitors doing, and how can we understand more about their personalities?
 
A simple framework you can use to get your head around the personalities of abandoning visitors is to categorize them into the following simple behavioral segments:
 
•    Window Shoppers – Those unlikely to buy.
•    The Undecided – They may buy from you, but the items abandoned in the shopping cart are acting as a shopping list while they decide.
•    Deal Seekers – They will only buy if they can get a deal. Read more »

By Charles Nicholls of SeeWhy and Joel Book of ExactTarget
 
We recently caught up with Adam Golomb, director of e-commerce at Smileycookie.com, to discuss their new shopping cart recovery program.
 
Smileycookie.com is a division of Eat’n Park Hospitality Group, which includes Eat’n Park Restaurants and Six Penn Kitchen. Its contract foodservice division includes: Parkhurst Dining Services, a provider of contract dining services to businesses, higher education institutions and cultural centers; and CURA Hospitality which provides contract dining and management services for regional hospitals and senior living facilities.
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According to research, web users surf on average for 33 minutes at a time and view an average 46 pages across multiple sites. The range of web browsing duration varies wildly: from short bursts, up to the maximum found by the study—a continuous surfing session of 171 minutes, or just under three hours. The average time spent on the web each day per person (across different device types) was approximately three hours. [In fact, according to Forrester, if you are 45 years old or younger, you spend significantly more time using the Internet than watching television.]
 
The demographic in this study was 90 percent degree-educated Americans with 10 or more years computer experience, 80 percent men and 20 percent women. While not a representative sample of the wider population, it holds some important lessons for marketers.
 
What it means is that customers won’t wait. Other studies have shown that typical web browsing is made up of a mixture of tasks—from information gathering to email, social networking and transacting on ecommerce sites.
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The shopping cart abandonment rate is a key metric every ecommerce team should track. When viewed across the ecommerce sector, changes in the abandonment rate give insight into mass changes in behavior which impact every website.

When we examine shopping cart abandonment rates across a large number of U.S. ecommerce sites, viewed in aggregate, the abandonment rate fluctuates wildly, with an expected strong seasonal influence and customer behavioral indications.

Usually it is impossible to correlate your site changes with the changes to conversion. But when viewed in aggregate, it gives you insight into what customers are doing and provides a valuable benchmark when analyzing your ecommerce site’s performance over the same period.

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Looking at the data a bit more in depth, the shopping cart abandonment rate averaged 73 percent in the first two weeks of January, some 12 percent higher than the low of 61 percent recorded on December 16. While the abandonment rate usually falls during the Christmas period, these are still huge swings, reflecting the impact of Black Friday/Cyber Monday deals, public holidays, and January sales.

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 While shopping cart abandonment affects all categories of goods sold online, the consumer electronics category stands out as a problem child when it comes to website conversion. Currently averaging a shopping cart abandonment rate of 74 percent, some 10 percent above the ecommerce average, consumer electronics is one of the worst-performing online categories.
 
That three out of every four customers put items in their online shopping carts, but then choose to abandon, is blighting the industry. Consumers abandon their online purchases for a multitude of reasons, including price comparison, to purchase in-store, or because of technical concerns somewhat unique to the consumer electronics sector. Marketers can learn important lessons from the apparel sector which also suffers from abnormally high abandonment rates, yet has seen very rapid growth in online sales in recent years. 

Consumer Electronics - Specific Reasons for Abandonment

Back in Q3 2009, a Forrester survey looked at the reasons that customers abandon shopping carts across all categories of products sold online, and these include:

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In the two weeks since Black Friday and Cyber Monday, online sales volumes have remained healthy, and the shopping cart abandonment rate steadied down to more usual levels, hovering around 65 percent. But these headlines mask an underlying trend to extensive discounting in order to get the volumes. Shoplocal.com report that promotional offers in the last week are up by 21 percent over the same period last year.
 
During 2009, we have observed changes in customer behavior towards a deal orientation, and these trends are now so pronounced that they can be measured in the shopping cart abandonment rate.
 
The shopping cart abandonment rate determines the health of a website. It is not a static number, but a dynamic ratio of visitors to those failing to complete a checkout processes. It is heavily influenced by promotions as well as changes to the site itself — and by your competitors’ promotions. This rate has always been important, now it is doubly so. Despite this, the majority of online retailers do not know their shopping cart abandonment rate. (SeeWhy has a free service you can use to track it on a daily basis, so frankly there’s no excuse!)
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Despite some upbeat reports, the retail sector is facing a tough Christmas. A new Christmas Retail Survey released today by America’s Research Group (ARG) and UBS suggests that sales are weaker this year than in 2008. Of those consumers not shopping, 95 percent said they will wait if necessary until December 24 to get more items on sale. There’s still a lot of business out there: only 4 percent of parents have completed their purchases of presents for their children. ARG reports that many customers will not buy unless they see discounts of 60 or 70 percent.

Of course, online volumes are up and things are altogether rosier, aren’t they? But as we’ve noted before, volume increases are coming at a price with solid evidence that promotions are essential for driving any increases in holiday conversions. According to Hitwise, sites promoting specific Black Friday deals saw a 9 percent surge in traffic over 2008. The winners so far this year online seem to be the largest and best known bargain sites: Amazon.com, Wal-Mart and Target converted 18.9 percent more traffic among the top 500 retailers than last year and gained in overall visitors. While the top 20 sites increased traffic by 14 percent year over year, the top 500 saw a traffic decrease of 9 percent.

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In case you hadn’t noticed, yesterday was Cyber Monday, traditionally the largest online shopping day of the holiday season. SeeWhy tracks website conversions and ecommerce shopping volumes. Online shopping volumes were up by 19 percent compared with Black Friday and up by 46 percent compared with Monday one week ago. We estimate that this equates to $705M in online spend on Cyber Monday.

The good news is that the abandonment rate has steadily dropped since the end of October. Back in August, the shopping cart abandonment rate was a relatively healthy 63 percent, and it climbed steadily to reach a peak of 71 percent in October 09. But when you look beneath the monthly average, then a strong weekly cycle is apparent. While retailers expect day of week variations in sale volumes, looking at website conversions/abandonments by day of week shows that the abandonment rate is highest during the weekends, especially on Sundays.

The chart below shows the daily abandonment rate for September through to Cyber Monday.

The pattern of high shopping cart abandonment rates during the weekend is normal throughout the year as customers research online before potentially making a purchase during the week.

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