The Istobe eCommerce Analytics Blog

In 2009, the IRS refunded nearly $260 billion dollars by the tax filing deadline. The average amount refunded was $2683. According to a recent study by the NRF, 12.5% of Americans are eager to spend their refunds on big ticket items like TVs, cars, and furniture. Put all this together and we see that, for retailers, $32.5 billion is up for grabs in the 2010 tax refund bonanza.

Timing is Everything

When is the best time to start marketing to these newly flush buyers? Digging around in published IRS statistics for 2008 and 2009 we see that most Americans file their tax returns right before the April 15th deadline.

No surprise there. Those expecting big refunds, however, file earlier. How much earlier? Early February.

Incorporating the average refund amount into the timing of filings, we see that the real money is at stake months before “tax season”.

The Second Wave Is Coming, Twice

While there is another peak of refunds issued around April 15, one thing to consider when timing your tax season promotions is that the number of filers getting their refunds by direct deposit plummets by this time of year.

So if you’re planning on running a promotion shortly after the April 15 filing deadline remember that only half of the procrastinating group of taxpayers getting a refund will receive it by then. You should also consider running a 2nd promotion in mid May when the paper checks start rolling in.

We know why shoppers abandon carts and we also know that email remarketing is an effective way to lure some of those shoppers back to complete their purchase. But how can you try remarketing to users with abandoned carts without investing a lot of time and money?

Try a Simple PHP Remarketing Script

There are a lot of good reasons to implement a robust remarketing system but sometimes there’s beauty in simplicity, especially when you just want to try something out quickly to see how well it works. To that end, we present a simple PHP script to send remarketing emails to your shoppers when they abandon carts.

The Abandoned Carts Input File

This script reads a comma delimited text file that lists carts that are currently abandoned (your e-commerce software likely has a report that creates this report or you may need to bang out a quick SQL query to do it). The file contains one row for each abandoned cart with the first element of each row being the email address of the shopper the cart belongs to. After that comes the products that were left in the cart. For example:

shopper1@yahoo.com, Item1, Item2, Item3
shopper2@gmail.com, Item1
shopper3@hotmail.com, Item1, Item2


The Script That Uses the Input File to Send Email

The php script below then sends out a reminder email to each customer in the file that shows them which items are still in their carts. You can customize the from name and address, subject, and body of the email by editing the configuration section at the top of the script.


<?php

?>


To use this script, just copy and paste the above code into a file and save it as email_remarketing.php (or whatever) on your web server or a server with a php interpreter installed. Then add your abandoned carts report to the same location and call it abandoned_carts.txt. Browse to email_remarketing.php in a web browser and off it runs.

Some Caveats

There are a few things to keep in mind before using this script:

• This script was made to be run on linux servers. It will work on Windows servers but you have to add some mail relay info to the script (learn how here)
• This script sends only plain text email but you can tweak it to send HTML email if you like
• You shouldn’t send too many emails at a time with this script, otherwise you’ll run the risk of having the emails marked as spam and/or your mail relay throttling your throughput. Limit it’s use to a few hundred a day tops
• This is simple, simple, simple and doesn’t contain any real management or reporting functionality.

Using a simple php script to do email remarketing is not a sexy or glamorous solution to cart abandonment but it will let you test the waters quickly and see what kind of response it drives. If you like the results you see early on you can certainly add more functionality to the script or even consider building or buying a more advanced system.

Last time we talked a bit about the reasons behind abandoned carts and realized that there aren’t many weapons available to combat most of its causes. Even potential solutions that look tantalizing (showing S&H and tax on product pages) will likely just push abandonment to an earlier pre-cart point in the process.

If Nothing Else, Read These Two Stats

All is not lost, however. It turns out that remarketing to shoppers who have left full carts behind really can make a difference. Check out these two stats, pulled from the Experian CheetahMail report:

Even the most basic [remarketing] emails (even those that simply link to a website home page) pull in over 31% higher transaction rates compared to bulk promotions — a number that senior management will find difficult to ignore.

Yowza. That fact alone should should make you want to drop everything and put a remarketing program together today. But maybe you’re still skeptical. After all, won’t a remarketing email with a discount offer simply train shoppers to abandon the cart in hopes of a better deal?

Not to worry (from the same report):

Emails sent to cart abandoners (those who have placed an item in their shopping cart but have not converted) with an incentivized offer only pull $0.09 more in revenue per email than those emails that do not contain an offer.

We don’t even have to include a discount offer in the remarketing email to reap its rewards. Not bad.

I’m Convinced. What Else Should I Know?

Before you get started, keep these tips in mind when sending your remarketing emails:

Create a sense of urgency. Subject lines mentioning that an item is about to be out of stock or that the basket is about to expire is likely to garner a better response rate than one simply reminding the user that items are left in his or her cart.

Time it to hit the sweet spot. When is the sweet spot? Conventional wisdom says one  to seven days after the user abandoned the cart. Start by sending it two days after abandonment and then test random groups using different timing to find optimal response rates.

Link directly to the cart. From the report:

The quicker a customer can access their own cart and view the actual products they were interested in, the higher the returns.

How Much Time Will It Take?

Implementing a remarketing program is one of those best practices that can yield great results without much investment. If you’re ready to dip your toes in check out our next post. We provide, in usable form, the world’s simplest php email remarketing script that will get you a functioning remarketing program in a few minutes.

Looking a report of abandoned shopping carts can be frustrating. All those carts stocked full of high margin items just waiting to be checked out. But the shopper bailed just before pulling the trigger. Was it something you said?

There two recent studies that examined reasons online shoppers fail to purchase after adding items to their carts. CheetahMail published statistics as part of a whitepaper in January 2010 as did Forrester in late 2009 (link to summary blog post). Both largely agree with each other. Let’s combine them and see what they tell us:

Biggest Reasons Shoppers Abandon Carts

(40-60% respondents citing as important)

• Didn’t want to pay shipping costs/High shipping costs
• Total cost of purchase was more than expected (read: tax + S&H)
• Was doing research/wanted to compare price on other sites

Less Important Reasons

(10-30% respondents citing as important)

• Wanted to look for coupon
• Wanted to buy offline instead
• Checkout was too complicated
• Security concerns

No Silver Bullet Here

While it’s tempting to think that a streamlined checkout process can make big improvements in cart abandonment rates the data doesn’t seem to bear that out. Instead, the biggest source of control we have in getting a customer to complete a purchase is letting them know as early in the process as possible what the total price after tax and shipping and handling will be.

But won’t this just shift abandonment from the cart to an earlier point in the process when the full tax + S&H total is displayed? Unfortunately, it probably will. So we need to look at other ways to address the abandonment problem.

Remarketing to the Rescue?

Let’s take a look at how to do email remarketing — the process of sending follow-up emails to customers who left the site with a full cart. Remarketing produces surprisingly good conversion rates and can be a valuable tool in the fight against cart abandonment.

Ready to get started? Here’s a PHP email remarketing script to jump start your efforts.

Do larger eCommerce retailers have more loyal customers than small retailers? Our data suggests maybe.

We dug through web traffic metrics for 520 retailers to see how many times the average visitor returned every month. Retailers with over 2 million unique monthly visitors have 67% more sessions per visitor every month than those with less traffic volume.

One possible interpretation is straightforward: bigger retailer = better brand = more loyalty. Another interpretation is that visitors return to bigger retailers more often simply because big merchants have a large selection of goods where customers can meet a variety of their shopping needs.

These theories are not mutually exclusive, of course. But are there other explanations that we’re missing?

You have to offer free shipping to sell shoes online. At least it seems most pure-play online shoe retailers think so.

Our free shipping list surveys 129 clothing and shoes retailers weekly. Of those 129 retailers, only these 13 offer free shipping with no minimum purchase:

Amerimark
Barneys New York
CaféPress.com
Casual Living
CustomInk.com
Kate Spade
Onlineshoes.com
Piperlime
Road Runner Sports
Shoebuy.com
ShoeMall.com
Shoes.com
The Guiltless Purse

Even though they make up only a small fraction of the clothing and shoes category, online shoe retailers account for nearly half of merchants offering free shipping (6 out of 13).

Has Zappos’ free shipping and returns policy forced competitors to drop shipping charges as well or is there another dynamic at work here?

(It’s interesting to note that, although free shipping is nearly ubiquitous in the shoe business, many merchants are reluctant to offer free returns as well. Instead they promote “easy shipping” by providing free pre-paid return shipping labels, cost deducted from return amount, of course. If everyone is forced to match Zappos’ free shipping policy, why not their free returns policy as well?)

Let’s just admit it: small retailers are the biggest abusers of Twitter. For every @KidBean there are 1000 merchants who spam their followers every day with one offer after another. But engaging in social media is different than direct email. Social media takes time and resources, both of which are in short supply at small and mid-sized etailers. So instead of engaging in conversations, the temptation is to use scalable shortcuts — shortcuts which happen to drive followers away.

Which of these Twitter shortcuts do the most damage to your budding online community? To find out let’s take a look at what a popular Twitter anti-spam tool, The Twit Cleaner, classifies as bad Twitter behavior:

1. Posting nothing but links. Posting link after link can be ok under some circumstances, but it may also be a signal that your account is nothing but an advertising tool. If you’re going to post a lot of links make sure they’re going to varied content: pictures, blogs, and other sites besides your own.
2. Tweeting the same links all the time. We get it. We should really check out your fantastic offer. Maybe we missed the first time you posted it, or the second, but certainly not the 12th. Conventional wisdom says you should limit purely promotional tweets to one in 10. One in 20 is better.
3. Few re-tweets and no @replies. Is Twitter is a one-way channel only for you? Using Twitter for eCommerce is as much about listening to your customers as getting your message out to them. If your followers don’t feel that they are being heard they may decide to unfollow you and drop the conversation all together. Or worse, they may take their conversation elsewhere.
4. Not following your followers (?). I hesitate to call this a shortcut even if The Twit Cleaner does. On the one hand, it’s important to be listening to what your customers are saying and, to listent, it helps to follow. On the other hand, Twitter users who have lots of followers but themselves follow few people are considered highly credible and authoritative. Given a choice, I’d rather be authoritative. But there is a middle ground that lets you follow your most vocal, valuable, and/or influential customers. (Fun fact: @Zappos follows 390,000 people and is widely considered the creme de la creme of retail Twitterers. @GapOffical, which pumps out nothing but promotional spam, follows 7.)

Lookout! HTML5 is coming! If you keep an eye on Twitter and tech blogs it may seem as if the whole world is talking about HTML5. Recently the chatter has gotten louder with the introduction of Google Wave (which relies heavily upon HTML5) and YouTube’s new beta support for it. But what does it mean for eCommerce?

Background

We’ve always pushed the Web to do more than it was designed to do. What began as a way to simply link text documents together has become a platform for shopping, chatting, watching videos, and kitten cuteness battles. In large part, this is thanks to additional functionality provided by 3rd party plug-ins such as Adobe Flash and Microsoft Silverlight.

HTML5 is a new standard that aims (among other things) to add native browser support for video, audio, location reporting, and new forms of user interaction that are currently the domain of 3rd party plug-ins.

How Far Away Are We From HTML5?

The group responsible for the creation of the HTML5 specification is called, for real, WHATWG. WHATWG began work on HTML5 in 2004 and expects HTML5 to be adopted as a W3C Recommendation in 2022. I originally had joke dates written to drive home how long this process takes but then I realized it’s funny enough without me having to punch it up.

In practice, though, HTML5 is starting to become a reality. Internet Explorer 8, Firefox 3, Safari 3.1, as well as niche browsers like Opera and Chrome, have already implemented partial support. It will be years, however, before HTML5 is supported as universally as current technologies like Flash.

Booooring. Get to the Point.

Let’s take a quick ride through some new features of HTML5 and how they will impact eCommerce:

Medium Impact Features

Video. This is the money feature of HTML5. This feature is WHATWG’s way of saying, “Beat it, Adobe, we don’t need Flash for video anymore.” But with 99.7% of browsers supporting Flash you’re safe to continue using Flash video for quite some time. There is one exception to this rule: you may want to consider using HTML5 video if mobile is a big part of your eCommerce strategy since the iPhone and iPad do not support Flash.

Geolocation. Browsers can now report a user’s location by passing along latitude and longitude information to your site. We can kind of already do this for computer users by using IP location lookups but now we can get the location of mobile device users, too. If technical innovation is a core strength of your company and mobile is part of the strategy you can probably find some interesting things to do with this functionality. If not, sit back and let your ad network, analytics software, and recommendation engine take the lead on using this new capability.

Low Impact Features

Canvas Drawing. Have you ever wanted to add interactive or dynamic graphic elements to your site? If so, you probably used Flash. You can safely keep doing that unless you’re desperate to provide the same functionality to iPhone users.

Semantics. Lots of the div tags used for page layout now have special names. But they don’t have to have special names. Eventually using the special names may have some SEO impact but not for a long, long time.

Drag and Drop Anything. Imagine if shoppers could drag any element of your site or their browser onto any browser surface! Yeah, we couldn’t come up with anything either. Someone will find something cool to do with this but it doesn’t have to be you.

Offline Storage. Websites can now store data offline within the browser itself to speed up functionality or improve usability when internet access is not available. If you think this sounds similar to cookies you’re right. The difference is that this capability is more robust and “databasey” than cookies are. While great for email and other web apps, there’s not much going on here that affects eCommerce.

Where Are the High Impact Items?

Exactly. It will take years for HTML5 compatible browsers to gain the same market penetration that technologies like Flash and Silverlight have. If you don’t need to show video or provide interactive functionality to iPhone or iPad users then don’t spend another second worrying about HTML5. What you’ve got now is perfect.

Do you think we’re totally off base on this one? Let us have it in the comments.

A well known SEO and SEM strategy for smaller retailers is to dominate niche long-tail keywords instead of competing head to head with big merchants for popular phrases. So instead of trying to rank for blu ray player, a better strategy might be to research keywords that have less competition (say, cheap blu ray player) and try to own those instead. But what happens when popular tools used for this type of keyword research have flaws that raise questions about the validity of their results?

Two of the most common tools for keyword research are free and come from Google itself: the creatively named Keyword Tool and a newer offering, Google Insights for Search. Both tools, more or less, report search volume for a given set of keywords. Google’s Keyword Tool provides an estimated absolute number of searches for a term while Google Insights provides a relative normalized value that makes sense only when compared to other terms or past data.

The problem is that the data in each tool is, more often than not, is contradictory.

Let’s consider our search for Blu-Ray players. First, here’s what the Keyword Tool has to say about the search volume for blu ray player:

The phrase match volume is 1,830,000 while the broad match volume is 4,090,000.

What does Google Insights tells us about the keyword blu ray player?

It scores the phrase match a 29 vs. broad match of 38. In effect, Google is saying that broad match volume is 224% more than the phrase match volume. But the Keyword Tool tells us that broad match volume is only 131% more than phrase match volume. This is a big difference.

It gets even worse when we get into head to head comparisons using a broad match long-tail keyword. Let’s take a look at the keywords blu ray player and cheap blu ray player in Keyword Tool:

We see 8100 searches for cheap blu ray player and 4,090,000 for blu ray player. According to the Keyword Tool, blu ray player is searched for 500 times more often than cheap blu ray player.

For the same keywords Google Insights shows:

A score of 1 for cheap blu ray player and 38 for blu ray player means that according to Google Insights, blu ray player is searched for only 38 times more often than cheap blu ray player.

The tools disagree with each other by an astonishing factor of 1300%.

The Perfect Is the Enemy of the Mediocre

We can’t heap too much blame on Google. They themselves say that the tools use different methods to analyze their data. They’ve also made no secret that their tools are not particularly accurate when studying low volume keywords.

But if we can’t trust in Google’s own tools using their own data when it comes to keyword analysis, who can we trust? It’s unlikely that 3rd party tools will yield better results given their reliance on sampling and secondary data sources.

Given all its flaws, Google’s tools are still the best available (certainly the best free tools available) so we hold our nose and take the results with a gallon of salt. Ultimately using Keyword Tool or Google Insights will give us a general idea of where opportunity may lie, but only real world testing will tell us for sure.

Last summer Gap Inc. dipped a toe back into brand cross-navigation, a staple of late 90s and early 2000s e-commerce design that used link bars to drive traffic to sister brands:

Gap Cross-Nav Summer 2009

Gap clearly liked what they saw because they upgraded the cross-nav’s small text only links to big bold tabs only a few months later:

Gap Cross-Nav Today

The trend caught on so quickly that it prompted Linda Bustos to document other retailers following suit last month.

Now two more big retailers have embraced tabbed cross-navigation. Lane Bryant has begun linking to their Cacique, Catherines, and Fashion Bug brands in a top mounted tab bar that is, shall we say, the sincerest form of Gap flattery right down to the shipping offer and shopping cart boxes.

New Lane Bryant Cross-Nav

Forever 21 has also gotten in on the act, adding links to their Hertiage 1981, HTG 81 Kids, and Twelve by Twelve brands. (Interestingly Forever 21 houses all of their brands in subdirectories within the forever21.com domain. Do they know something about SEO that we don’t?)

New Forever 21 Cross-Nav

What does this mean for smaller retailers?

Gap claims that the changes were the result of focus groups and a part of a larger initiative to integrate the cross-brand shopping experience. We don’t yet know, however, if the cross-nav tabs have resulted in increased conversions or average order value.

It’s also possible that Gap’s peers have made similar changes not because they drove better results in testing but because of a herd mentality that products an “800 pound gorilla see 800 pound gorilla do” effect among larger retailers.

Small retailers should keep an eye on the cross-nav tab trend but until we better understand its benefits there is no need hop aboard just yet. By all means, run a few tests to see if it produces lift conversions, AOV, or a meaningful engagement metric. Just don’t let the 800 pound gorillas make a monkey-follower out of you.