Today in Digital Marketing - Deep Dive: Preventing Shopping Cart Abandonment

Episode Date: February 22, 2024

New scientific research find that asking people to review product reviews or check out other product pages may be causing people to abandon their carts.In the e-commerce space, there is no end to the number of plugins, platforms, and pop-ups you can install on your store's webfront to try to juice sales. One of the biggest focuses of this category is around increasing the conversion rate between the moment someone adds a product to a cart and that person actually pays for it. In fact, I'd venture to say an entire industry now exists in the very specific, but very important, space known as Cart Abandonment. Some studies show that 80% of online shopping carts are abandoned. In this space, we see everything from urgently worded text messages to time-limited discount offers by email.Sometimes, these tools encourage people to come back to the site to read the product reviews, or browse more product pages.But a new paper published last month in the Journal of the Academy of Marketing Science says tactics like that might actually be CAUSING people to abandon their carts.Tod spoke with Angeline Scheinbaum, Associate Professor of Marketing at the Wilbur O. and Anne Powers College of Business at Clemson University in South Carolina. GO PREMIUM!Get these exclusive benefits when you upgrade:✅ Listen ad-free✅ Back catalog of 20+ marketing science interviews✅ Get the show earlier than the free version✅ “Skip to story” audio chapters✅ Member-only monthly livestreams with TodAnd a lot more! Check it out: todayindigital.com/premium✨ Already Premium? Update Credit Card • CancelMORE🆘 Need help with your social media? Check us out: engageQ digital📞 Need marketing advice? Leave us a voicemail and we’ll get an expert to help you free!🤝 Our Slack⭐ Review usUPGRADE YOUR SKILLS• Inside Google Ads with Jyll Saskin Gales• Google Ads for Beginners with Jyll Saskin Gales• Foxwell Slack Group and CoursesSome links in these show notes may provide affiliate revenue to us.Today in Digital Marketing is hosted by Tod Maffin and produced by engageQ digital on the traditional territories of the Snuneymuxw First Nation on Vancouver Island, Canada.Our Sponsors:* Check out Kinsta: https://kinsta.comPrivacy & Opt-Out: https://redcircle.com/privacy

Hello, friends. It's Todd, and I am currently out of the country on vacation. I'll be back Thursday, February 29th. So instead of a regular newscast type show, please enjoy this deep dive interview. Do you have business insurance? If not, how would you pay to recover from a cyber attack, fire damage, theft, or a lawsuit? No business or profession is risk-free. Without insurance, your assets are at risk from major financial losses, data breaches, and natural disasters. Get customized coverage today starting at $19 per month at zensurance.com. Be protected. Be Zen. On the e-commerce space, there's no end

to the number of plugins, platforms, and pop-ups you can install on your store's webfront to try to juice sales. One of the biggest focuses of this category is around increasing the conversion rate between the moment someone adds a product to a cart and that person actually pays for it. In fact, I'd venture to say an entire industry now exists in the very specific but very important space known as cart abandonment. Some studies show that 80% of online shopping carts are abandoned. In this space, we see everything from urgently worded text messages to time-limited discount offers by email. Sometimes these tools encourage people to come back to the site to read the product reviews or browse more product pages. But a new paper

published last month in the Journal of the Academy of Marketing Science says tactics like that might actually be causing people to abandon their carts. Angeline Scheinbaum is an associate professor of marketing at the Wilbur O. and Ann Powers College of Business at Clemson University in South Carolina. Dr. Scheinbaum, welcome. Thank you so much for having me, Todd. Can we start with the basics? What are the major reasons why people abandon a cart? First of all, if we can talk about the concept of shopping cart abandonment in general and why I think it's so interesting is, first of all, this is a digital behavior that's just so different than the real world. If you think about last time you went grocery shopping or even retail shopping, it's very unusual to take something and to put it in your card or

your basket or your hands even and get all the way up to the counter and then not go through with that transaction. So that led us to study this online. If it's particularly rare in the real world or the non-digital setting, why is it that, as you said in your intro correctly, that 70 to 80 percent of all carts are subsequently abandoned or not converted to the sale? So to answer your original question, why? Why is this? Well, on a broader theory, we look at this really from a psychological lens as well as a social lens. So psychologically, a lot of it is, first of all, you just don't have that purchase motivation. You're more curious

rather than really in the goal-oriented mindset of wanting to complete that. The second is really economic control. It's to get more information. It's to maybe get a better deal. It's to see your total price after taxes and tip and shipping and all of these kind of bizarre fees that a lot of companies now are adding on to transactions. Sometimes it's just quite simply an organizational motivation, right? That people are getting a wish list in order or getting some ideas put together and putting things in their basket that particularly, again, they might want to look at as an organizational state. And then I think the last two reasons that we found would be, you know, the research and information motivation as well as a convenience motivation.

That for some people, it's just simply something really convenient to do, especially on the cell phone, to go through with putting something in a cart, but maybe really never buying it. You found that when people start a session with an existing cart, they'll use the cart more, but they're more likely to abandon it in the end, specifically when they're starting a session with an existing cart, they'll use the cart more, but they're more likely to abandon it in the end, specifically when they're starting a session where they've got an existing cart. Why do you think that happens? Well, you know, we pondered with this as well, because it could be that that existing motivation to actually purchase was never really there all along. So again, we're only speculating because this is clickstream data. Now, the beauty of clickstream data is we're measuring actual

behaviors, right? We know where people's eyeballs were. We know where people were clicking throughout the purchase funnel. What we don't know, though, is that why. So again, please note that whatever findings we have, when I go to explain why they held or why they didn't, I'm merely speculating because I don't have that ability to ask a customer. Our theory or one of our hunches could be in that case, there must have been a reason why somebody didn't complete that transaction in the first place. So maybe the second time, it could be the same reason, right? Maybe nothing else had actually changed from shopping session one to shopping

session two. I see. Okay, that makes sense. I also thought it was kind of interesting, you found that when people, they start a session again with an existing cart, and then they go poke around other product pages, they're actually doing that more for entertainment value than as like an indicator of product interest. So should we encourage that behavior because, you know, entertainment and fun is a positive brand association or should we discourage it because it leads to actual less cart usage? I think that's a good question. It probably depends on the type of product that we're selling. And although I don't have data

to mix this up between hedonic or fun purchases or utilitarian or kind of more, I guess, boring purchases, right? I would love to get data on that to split that up to see because I really do think that your question, I think it matters what type of product. And I wish I had data to dig down to see what that is. But I do think the theoretical or the managerial implication there is just to be careful. Like don't add extra pages for customers to look at because that's only going to potentially give them somewhere else to go to click on to not complete a purchase. And I'll give you an example of work that's not my own with our team, but one of the papers that inspired us was interestingly on those coupon codes, right, or discount codes. And the work was quite counterintuitive in that you would think that if a customer has a code, right, or if a code exists, it would help somebody complete a business transaction.

But what amazed me, those researchers found, was that it actually increases cart abandonment, right, because it's just one extra step for a customer to do something. Or you think, oh, man, I don't have that code. Or even worse, like what? There's a code and I don't have it? Well, I'm not going to complete that transaction now. So the big picture in this, again with a caveat, it depends on what you're selling. I do think that we need to think long and hard as marketers of providing extra things, extra pages, because that only gives one more chance for somebody to click here, click here, click here, click here. And then you become so far removed from that potential sale that you had kind of right there. So it's so tempting to do too, isn't it? Exactly. So the data set you mentioned earlier,

the data that you collected, the data set you used for this research came from a large European retailer that sells sportswear and clothing and home products online and in stores. They gave you access to data from about a million sessions, ended up being about 180,000 customers in total, I think. And those were sessions from 2018. Do you think your results would be different if you'd have used more current data? I would hope not, because I do think when you're approaching a sample size up to a million, it's not quite big data, but for some circles, it's a huge sample size, and it's fairly robust after going through a lot of statistical tests. And if anything, the results might be confirmed a bit more because what we're seeing now with online shopping from 2018 to today, the world has gone, quite a hard time with the pandemic. For e-commerce marketers, the silver lining to that is that people's online consumer behavior

has changed dramatically because of the convenience and the safety factor. So with anything, I would say that the results would hold and they would be much stronger. More reinforced because of the behavior. Absolutely. What should online retailers do with products that are sold out? Do they list them anyway? Should we let people put a hold on them, offer a substitute? When people encounter a sold out item, which would be a big kind of purchase motivation,

right, is it's interesting that in some cases it could increase the demand and the desire because of the psychology is, well, we can't get something, therefore it must be good. It must be valuable. Other people want it. It's in demand. So the literature has showed it bizarrely can almost enhance somebody's desire to it. But the reality is in this day and age, we vote with our wallets in the era of capitalism and hyper-competitiveness that some consumers are just simply leaving your interface

and they're going and they're going to buy it from somebody if they're in that mindset already. So again, and I don't have the data for this, a lot of times it depends on somebody's mindset going in. And this is where the data has some limitations. But if somebody is in that mindset and it's a utilitarian process or product, you know you're going to buy it because you need to buy it. If it's sold out, you're going to go to a competitor. But then again, if somebody doesn't have that purchase motivation from the get-go, but they want to just organize and get some information search, they're more likely to put technically a sold-out item in their cart and come back to it and buy it when it is restocked.

So I would say out of all of our variables, that's probably one of the more time-sensitive ones, right? Because for some people, you don't mind waiting a day or two. But depending on the person and the product and the situation, for some people, they have no problem just leaving and going, look, if you're not selling it, somebody else is. I think most consumers and I may be wrong about this, but I think that most consumers who think about card abandonment or the science of that is described to them, their only kind of real world relationship to it are these retargeting emails that we get. You know, you end up on a website, you put one thing in a basket, you leave the

website, and then like eight seconds later, you get an email from the company saying, come back, come back. How soon should we be retargeting people when they've left something in a cart? God, you know, I wish I could talk about my team's research right now on this, but we have never done that study. But there is a marketing professor who has done work on this and his and his research team found that there was like a double edged sword and it can actually backfire that, uh, if a company sends out that message too soon. Um, and that paper came in the journal of marketing, uh, recently. And I believe it's called something to the effect of like the backfiring effect or the

double edged sword of behavioral retargeting and e-commerce. And I thought that was a fascinating study. And it points out your really good question that, yes, it's good to do this, to behaviorally retard, to remind us like, hey, you know, your product was sold out. I know you were interested in this. Come back and buy it. Even if you give a nice promotion code, maybe someone would be more interested in buying it. But there is a secret in the timing, according to their research, right, that we can't do it too soon because it's too pushy. But you also can't do it too late, right? Because if we do this too late, then maybe somebody else, to my earlier point, they've

moved on, especially if it's a utilitarian product. I'll give you a crazy example. You know, my kids are at their baseball pictures right now, and they needed a utilitarian product. I'll give you a crazy example. My kids are at their baseball pictures right now and they needed a purple youth belt. And it has to be purple. It has to be Clemson purple, right? So that's an example of something, as a parent, we need that for picture day. So if Amazon doesn't have a youth purple belt in size small, I'm not going to put it in my cart and wait. That's something where I simply, it doesn't matter how much more expensive it is, I'm going to find it, whoever's selling it online to buy. So in that case, we would have bought anyway,

no matter when that target email came. But again, if you wait too long, people will forgot and they will have moved on. You mentioned incentives. I'm curious to know whether you studied that, whether offering incentives to come back decreased cart abandonment, like maybe free shipping or something. That would be cool. But we had a limitation with that data set, right, in that we only had whatever was able to be captured on that click stream. And we weren't able to capture that. So basically, what we were able to capture were things like, did they have an existing cart? In other words, when they opened up their session, was the item from the last session already there or not? We looked at the number of sold out products that they were exposed to. We looked at the number of clearance pages that they were again exposed to. I, and if they were shopping from a tablet, a phone, or a PC. I was going to ask, was there much of a difference in abandonment behavior between people who are buying on desktop versus a smartphone? There was. So we looked at this as kind of the convenience motivation. And we didn't see

quite so much differences between the mobile devices, the tablets and the phones. But there was more of a substantial effect between shopping on a desktop versus a more mobile device. And we think that, again, has to do with a convenience motivation. Maybe when we're shopping on our phone, maybe we don't have that mindset of purchasing as much. Maybe people take things a little bit more serious when they're shopping from a PC. Now, what could be confounded with that and data that I don't have or our team doesn't have is where are people shopping from? And I've always had this hunch that maybe people who are shopping from a PC, they might be doing this from work during the day. So we did look at the time of day. And I really do think that it's correlated. I have a personal, like, hunch, right, that when people are at a secure place, they're at work,

maybe they're on their PC, that they could be more in that mindset of completing a purchase, rather than if they're perusing around at night on their phone, you know, maybe they're more of a mindset of searching and browsing. And maybe they simply put something in their cart just to get more information or to see how much this is actually going to cost after fees and taxes. And we know, I think, the research, not yours specifically, but just sort of general marketing research into this space knows that there is some level of device switching. But I was interested to note that this device switching, at least the numbers that you found, it wasn't

nearly as big a thing as I think most people in the industry think it is. You found, I think, 98% of smartphone users never switched to desktop or any other device during or between sessions. Yeah. Did that surprise you? It did. But just like you, it's such a buzzword right now in marketing and business, right? It's something we teach about. It's something that there's so many cool words for it, like the second screen phenomenon and this thought that the way that we consume is so different. You know, obviously, it used to be that you would go to a store and just buy something. But today, there's all these new fancy terms like showrooming, and web rooming, right? So the whole concept of a customer going

to the store, and then feeling it and touching it and making their decision. And then maybe even right there in the store, which I think is a little rude, but I think a lot of people are shameless in this respect, is they will just blatantly get out their phone and start looking for a better price and then tell that poor salesperson, you know, thanks. You know, thanks for letting me try this on. I look fabulous in it. Now I'm going to go to your lobby and I'm going to go buy it from your competitor to save $4. Maybe that's shameless. Maybe it's not. Maybe it's smart, right? It's all depending how you perceive this. And of course, if you're the marketer or if you're the consumer, and as I'm a consumer and a marketer, I think I'm more sensitive to, you know, the salesperson's point of view than

the average person, of course, right? But, you know, to your point, there's just so much going on with channel switching and all of these new behaviors. We expected that there would be a sizable amount of people who started shopping, maybe from their desktop, and then they would complete that transaction or continue looking at the product when they got to their phone. But we found in a sample size of, what, 958,000, so almost a million, that about 98% from my memory of all of our transactions were completed at the same device that they started with. Now, I'm not saying that 98% of transactions were completed. So don't hear me. I hope I'm not misrepresenting myself. Yes, yes. But of the group that were.

Correct. So I'm not saying device switching is not important. But just when we're talking about retail sales, and again, keep in mind, we're talking about a British multinational retailer with over 500 stores. I mean, it's a major store. But what we're looking at would be things like clothing, footwear, sporting goods, sporting apparel, home wear, which probably aren't huge ticket items. I think if you look at the average cart size of things that were completed with this data set, it's not a huge amount of money. So I do think I have a hunch that the device switching would happen more on high-end items. Some people buy cars online these days. Like my students have told me they have no problem about buying a car over the internet. Maybe my generation and older, that's something that just seems like unusual. But my hunch is if you are one of those people who are going to be buying a big ticket item, i.e. a car or something

like that, absolutely, you would probably be more inclined to device switch, right? Because you're probably not just breezily sitting down and putting something like a car in your shopping cart and then just buying it on your lunch break. So I do think one of the next studies that my team and I would like to do, or at least I would like to do, or encourage my peers or someone in industry to do, would be to replicate our work. But also dig deeper into the actual type of things that are bought, big ticket versus a t-shirt or something and see if device switching plays a bigger role. Because if you read our data and our findings, device switching really didn't happen a lot. Do you have business insurance? If not, how would you pay to recover from a cyber attack, fire damage, theft, or a lawsuit? No business or profession is risk-free. Without insurance, your assets are at risk from major financial losses, data breaches, and natural

disasters. Get customized coverage today starting at $19 per month at zensurance.com. Be protected. Be Zen. You know, it's not just young people, though. My wife and I bought a Kia Carnival 2022 basically off TikTok. We saw a video. Someone did a video about it, the new model. And it happened to have the layout inside that we needed. And two months later, we had the exact same thing, which is kind of bizarre. And then you mentioned this showrooming and people shamelessly just sort of going out into the lobby to buy it. A friend of mine just bought a bookstore up in the north of Canada. And she was doing a book sale at like a like a mall and had a bunch

of her books out. And this woman apparently came up and was just taking photographs of books here and there. And my friend Jen said, what, what, what are you taking the things for? She said, well, I'm just going to go buy them on Amazon, like right to the face of the purse of the bookseller. You know, it's, it is getting kind of shameless in that way. Exactly. And maybe, maybe shameless is a bad word. In fact, I like almost want to retract to that when I said, I was like, oh dear, I'm not calling consumers shameless. But I do think like, so you and I are marketers, right. Or have the tendency to think like a business person and think like a marketer. And it's just like, I don't know, have you ever been a server or a host or like worked in the restaurant industry? So, um, it's

kind of like that. I feel it from both sides. So now whenever I go out to eat, it's like, I want to tip well, like I want to be polite. I want to be like not pressuring them because I've been a server and a host and I know what it's like on the other side. So I think now when I'm a customer, I, I almost have the sense of empathy for the salespeople a lot of times, cause they're just front line. They're the frontline employee. Right. And a lot of times they don't have the managerial decision-making ability to haggle on pricing, um, or, you pricing or explain away some of these bizarre fees and things like that. So yeah, no, you're right. The world is changing and it's almost like the etiquette or the netiquette is questionable. People don't know,

is this appropriate? And maybe it's because they're not thinking from the business's point of view. They're thinking rightly so from their point of view. Hey, if I can save, you know, five bucks ordering this book on eBay or Amazon instead of buying it from the author who's like sitting right there, maybe people don't understand that that is on that gray area of etiquette these days. Who knows? Back to shopping carts. I want to, you know, I was thinking about this last night. My wife and I were talking about it. She's also in the academic world. So we were sort of chatting about this interview coming up. She and I use our,

we have like a shared Amazon account essentially. And there is apparently a way to connect up a family version to it, but there are no Amazon families available in Canada. So we can't do it. So we have a single shared Amazon account, which makes it difficult when we're trying to buy gifts for each other on Amazon. But whatever. We use the shopping cart almost as a kind of placeholder, as a wish list, as a I'll think about this later list. Should we encourage consumers to do this? Does encouraging that behavior help or hurt eventual sales? It depends when, because keep in mind, our unit of analysis is one shopping session, which is defined as the second you log on to the second you close the browser or the app in some cases. So if we had long-term data, I think the question would be,

have a different answer than the way that I can answer it within that shorter window. Because based on our research on the long, the big picture of over the last 10 years, I think there are good things about this wishlist, right? Because it signals intent. And again, if it's a big picture item, you're more inclined to go back and buy that purchase. But from a short time period, it could actually be a bad thing because you're putting it in a wishlist and that's like a separate mindset. You're thinking like, okay, for this birthday coming up or for us, it's, you know, when, whenever Christmas comes, this is good to kind of put on a list. Also speaking as a mother, by the way, you know, for a second, not Professor Scheinbaum, but Corbin Barrett and Wesley's mama. I think it's a very smart idea to have this long-term mentality for the wishlist,

because if you're a parent too, if you're all the parents out there, you get this thing called pester power, which, which, you know, is like the, the kids are saying, oh, you know, I really want this like, you know, big $200 place, that thing. Right. And you want to get it for your kids. Uh, they continuously pester. So you want to put it on this list. Okay, this will be for Christmas or this will be for their birthday or this will be for their next big milestone, whatever that is. So I do think that there's a lot of good to these wish lists. But one kind of caveat to this, and I think Amazon has really mastered this and it's good and it's bad for us as parents and consumers in general, is the whole buy it now

feature. So if you're able to buy something now versus putting it on a wish list, that's a sale that the company is getting right that second within that session that we can measure as a conversion. So again, it depends on how you think of it long versus short. But from the long point of view, I think it's good to have these wish lists. But from the short term point of view, it would be much better from the company's point of view if we would just click buy it now. And I just don't I don't want my kids to know where that button is. Because then I would have Pokemon like shipped to the house regularly. If you were to do this study now or a year from now,

to what extent do you think this trend toward the cookiepocalypse and the removal of cross-site tracking would affect your ability, researchers' ability to collect this kind of data? Like, are we not only entering a time where it's going to be difficult for us to measure ad campaigns as marketers, but are we entering a time where this removal of cross-site tracking, the removal of third-party cookies, the enhanced privacy, is going to contribute to a loss in the research community of what marketing science can offer practitioners? Yes, I wish I had a different answer for you. But the truth is, from my understanding,

our data was modeled on shoppers who were registered. So not just browsing, right? But at one point, they had registered with this eTailor. So in order... Which bypasses the third party and the cookie issue. Right. So for us to really include people in this data set, we had to make sure they were registered, right? Otherwise, you had asked me earlier about multi-devices. We wouldn't be able to answer that question unless we had the ability to have that data. So yes, to your point, the more of these restrictions, the less we as researchers can really answer some of these very minuscule, like detailed questions,

such as what percentage of customers started with a tablet and then they went to their desktop. Right now we could answer that. But in the future, sometimes we're not going to be able to do this. What surprised you the most about your findings? I think we were pretty much set up for these, with the exception of the sold-out item scene. That one was something we ultimately just phrased as a research question, because there wasn't a lot of literature or common sense that probably would help us set that up either way. So in other words, the more items that you see that are sold out, how is that going to affect the shopping cart abandonment? That one to us was kind of surprising in the

sense that we weren't really sure how that would work. Another question that still to this day, I feel like there's really not a lot of clarity on is removing items from the cart. When a customer has 30 items and they put them in their cart and they are going to remove 29 of them. How is that different than the customer who's just putting one thing in and then they don't finish that transaction? So I think there's still room to address those two topics because to me anyway, those were a little bit fuzzy compared to the other ones, which were much more clear in terms of our reasons for studying them and why. So I guess the last question, it might be the single most

important one, and that is how should marketers change what they're doing right now in light of your findings? One is that marketers should understand or at least think about that there's a differential relationship of retailer-provided versus consumer-provided information search with the cart use and cart abandonment. So what e-tailers could do is to encourage customers to place more items in their cart. Online retailers should make consumer reviews more visible. However, the results are also showing that exposure to too much information could make what we call information overload. And then that could spark something called choice deferral. Again, kind of putting it off planned procrastination was an earlier word that we had used for that

so what customers can do and what companies can do is really think about those customer reviews and where they're going to be on that site and if they're needed at all because if it produces information overload in some cases it could actually be a detriment to closing that sale. Well, Dr. Scheinbaum, it's certainly interesting research. I'm delighted you could share it with us. Thank you so much. Angeline Scheinbaum is an associate professor of marketing at the somewhat hilariously named Wilbur O. and N. Powers College of Business at Clemson University in South Carolina. I always love the way American schools throw every donor's name on everything. She had other co-authors on the paper. Those

people are, and my apologies, I'm probably going to butcher these names, Monica Cukor-Kinley and Jeffrey R. Carlson from the Robbins School of Business at the University of Richmond, Larry Orimole from the Business School at the University of Southampton in the UK, and Hipping He from the College of Management at Shenzhen University in China.