Stop Losing Sales! How AI and Automation Can Save Your Abandoned Carts
Preface
Many bystanders would tell you, “Starting an online business is a cakewalk.” Those who have never dared. Imagine someone bumping into you at McDonald’s and tossing your burger to the floor even before you had your first bite.
Despite growing at a 9.47% CAGR, the retail eCommerce industry suffers from an acute cart abandonment problem. This blog evaluates cart abandonment consequences. Let’s discover how AI and automation can help eCommerce businesses recover abandoned carts and convert losses into sales.
The Importance of eCommerce
In 2023, global eCommerce sales crossed 5.8, growing at a 7.6% annual rate. By 2027, eCommerce will be as massive as $7.9 trillion, with 25% of retail sales happening online.
Whatever the growth rate and hurdles it has faced since 1969 when CompuServe was launched, there is no looking back for eCommerce. Consistent technological upgradation and circumstantial changes in the global economy have stimulated digital commerce.
eCommerce has been among the fastest-growing industries across the globe due to the shopping convenience, multiple product choices, easy checkouts and shipping, and multiple secure payment options it offers.
- eCommerce transcends boundaries, attracting a global audience by offering a superior shopping experience to achieve new growth zeniths.
- eCommerce stores demand the least physical space, and eCommerce development services seek minimum investment to be cost-effective.
- eCommerce businesses’ ability to adapt to consumer demands and market trends makes them the most convenient shopping option for customers.
- Physical stores can’t easily elevate customer experiences without investment, whereas eCommerce allows 24*7 access, price comparison, and easy checkout.
- eCommerce businesses can leverage customer data with data analytics to devise robust marketing strategies and deliver personalized experiences.
Understanding Shopping Cart Abandonment
eCommerce businesses have witnessed the most significant change in recent years: transforming customer experiences. eCommerce businesses have exceedingly invested in enhancing customer experiences through various technological means.
Despite eCommerce businesses transcending customer experiences and making them a centerpiece of their growth stories, customers cause massive financial pain by abandoning their carts.
When customers do not proceed with the checkout and refuse to pay for the product, the customers abandon the cart. When customers abandon the cart, eCommerce businesses lose sales and forfeit customer acquisition costs. It leaves businesses with increased ad costs, logistics, and storage costs, lowers revenue and profit margins, and lowers brand value.
AI’s Power in eCommerce
Unless you have been hibernating for the last few years, you must have heard about artificial intelligence (AI). AI entered the public domain in 2022 when governments lifted lockdown restrictions. In 2023, people started embracing AI, knowingly or unknowingly, through their mobile devices, IoT devices, and special-purpose instruments and tools.
When discussing the eCommerce industry, AI started revolutionizing operations by optimizing business processes and workflows. AI and automation solutions are arming eCommerce businesses in two ways. On the one hand, they straighten the entangled business processes. On the other hand, they take customer experience to the next level, helping businesses surpass their competition and enhancing their bottom line.
Hyper-Personalization:
AI and automation solutions analyze and evaluate customer data to learn about their choices and preferences, recommend products, and engage effectively.
Virtual Assistant:
Chatbots are customers’ favorite AI tools as they respond to customers’ queries immediately and quickly resolve their problems on the spot, to the customers’ satisfaction.
Smart Search:
Artificial intelligence have enabled the search of products through images and voice commands. AI enhances smart search capabilities, which improve conversion ratios.
Intelligent Automation:
Robotic process automation streamlines order and dispatch processes and optimizes inventory management to enhance efficiency and reduce costs.
Predictive Analysis:
Big data analytics leverages data from market trends and customer behavior to predict demand and price fluctuation and devise robust business strategies.
Fraud Detection:
AI algorithms easily identify anomalies in orders and transactions to protect eCommerce businesses from data leaks and cyber-attacks and build trust in a brand.
Why Shoppers Abandon Carts
Imagine the frustration of knowing that 7 out of 10 customers regularly ghost eCommerce stores. Cart abandonment is an exacerbatingly common feature among eCommerce businesses. There are multiple reasons why customers ghost their favorite eCommerce store.
Unexpected Costs:
When the price on the product page differs from the one at the checkout due to additional shipping, tax costs, etc., customers find this unreasonable. An increase in cost at the checkout discourages customers.
Cumbersome Checkout:
On some eCommerce websites, the checkout process is much longer than expected. The website asks for too many details in too many steps, leading customers to give up on the product.
Account Sign-up:
Many customers don’t like to sign up to buy a product. When asked to create a permanent account and divulge too much personal information to collect data, customers are discouraged without having a guest checkout option.
Security vulnerability:
It is obvious that customers are hyper-conscious about their hard-earned money. Customers rarely complete their purchases if an eCommerce website doesn’t showcase enough security measures against customer data.
Inflexible Payment options:
Different customers are comfortable with diverse payment options. Customers will most likely abandon the cart when an eCommerce website has limited options, such as a credit card only, not a debit card, or no COD.
Technical Glitches:
Long webpage loading time is a major discouragement. Poor navigation and difficulty in finding the exact product are other red flags. The unavailability of image enlargement can also be the reason for cart abandonment.
Responsiveness:
Maximum online shopping takes place on mobile devices. If an eCommerce business has a poor web app or mobile app or absolute lack of it, customers won’t trust such an irresponsive website for shopping.
Long Delivery Time:
Suppose delivery time is not mentioned on the product page and is added only on the checkout page, which is more than reasonably expected by the customers. In that case, shoppers will abandon the cart.
Inefficient Customer Support:
When eCommerce businesses focus on sales and do not provide vital customer support to alleviate customer doubts and respond to their queries, customers abandon carts due to a lack of support and information.
Poor Return and Refund Policy:
An eCommerce business must clearly state its return and refund policy throughout the customer journey to educate customers about the dos and don’ts. A lack of clarity may discourage customers from shopping online.
AI-powered Cart Abandonment Recovery Strategy
For a customer, it is just one order that they abandoned, but for an eCommerce business, it translates into substantial financial and reputational losses. Therefore, online stores should be mindful of selecting the right eCommerce development service provider, who can develop features with AI and automation to address the issue of cart abandonment.
Cart abandonment recovery is a strategic issue requiring tactical and strategic answers. AI and ML solutions can digitally access the customer’s shopping approach to ascertain whether they will abandon the cart. Moreover, AI and automation solutions can deploy digital means in real-time to ensure the customer does not abandon the cart and completes the purchase.
Let’s look at how AI can help eCommerce businesses turn abandoned carts into sales.
Personalized Email:
AI algorithms can evaluate customers’ preferences and shopping history to send product recommendations with discounts or cashback offers through a recovery email, motivating customers to complete the purchase.
Chatbot Engagement:
AI can quickly deploy a chatbot conversion with a customer as soon as the cart is abandoned to understand the issues customers face. Chatbots can resolve the problems customers face and help them return to the cart.
Dynamic Discounts:
AI algorithms can analyze customer behavior, purchase history, and products in the cart to determine whether offering a discount may inspire customers to return to the cart and complete the payment process.
Cart Reminders:
AI and automation solutions leverage push notifications other than email to inform and continuously remind customers about their favorite product in the cart. AI can also share a few similar products with price differences.
Predictive Engagement:
Artificial intelligence can quickly evaluate customer movement and determine whether a customer will abandon the cart. Based on such predictions, chat support or an exit-intent popup can be deployed for engagement.
Checkout Assistance:
AI can quickly learn about the hurdles customers might face and eliminate them from checkout, such as submitting personal details, long forms, or limited payment gateways for smoother and faster checkouts.
Product Recommendation:
AI can identify your intent, whether you are serious about buying or just roaming around. Based on your previous search history, AI can recommend products and offer discounts on those products to inspire you to buy.
Retargeting Campaigns:
AI algorithms are extremely intelligent. They evaluate products in your cart and target your social media timeline with organic posts about abandoned products or run targeted ad campaigns to remind you of the abandoned cart.
Micro A/B Testing:
AI and automation solutions can compare multiple elements of eCommerce ads or organic posts related to abandoned carts and help businesses determine the ad title, content, timing, and offers to optimize marketing campaigns.
Measurable Results of Cart Recovery Success
Every eCommerce business will examine the value of adapting to the latest AI-powered solutions. However, businesses may be reluctant to adapt to AI and automation solutions, significantly if the cart abandonment recovery ratio does not improve or the improvement is ineffective in terms of ROI.
Notwithstanding the skepticism, AI has empowered eCommerce businesses to improve various metrics by deploying the cart abandonment recovery strategy.
Cart Abandonment Ratio:
eCommerce businesses have significantly reduced the number of abandoned carts, and its percentage has gradually come down after deploying AI and automation solutions.
Conversion Rate:
eCommerce businesses that deployed automated recovery emails, chatbots, and personal recommendation emails have significantly improved engagement and conversion rates.
ROI growth:
AI-powered cart abandonment recovery strategy and marketing campaigns have recently moved ROI metrics towards the north for many eCommerce businesses.
Customer Satisfaction:
AI-enabled customer support and virtual assistants have improved customer engagement. As a result, fewer carts are abandoned, and more customers are satisfied with their shopping experiences.
Conclusion:
We all have heard about the dot-com revolution in the millennium year. Artificial intelligence is a far bigger invention that will change the way businesses conduct their business and the way we live our lives. Revolutionizing the eCommerce industry is as good as revolutionizing individual life, as we are becoming dependent on eCommerce businesses for our daily needs.
FAQs:
1. Why do customers abandon shopping carts?
There are no specific reasons for cart abandonment, as several elements affect it, mainly the customer’s mood, needs, product prices, and thought of value addition. This blog explains the diverse reasons behind cart abandonment and how eCommerce businesses can overcome the problem by deploying AI and automation solutions.
- Unexpected costs at checkout (shipping, taxes)
- Cumbersome checkout process with too many steps
- The requirement to create an account
- Security concerns about the website
- Limited payment options
- Technical glitches (slow loading time, poor navigation)
- Unresponsive mobile app
- Long delivery times
- Lack of clear return and refund policy
2. How can AI help reduce cart abandonment?
There are many ways in which AI can help eCommerce businesses overcome card abandonment risks. However, not every tactic can be deployed by every eCommerce business. eCommerce businesses need to determine their nature, audience, and product categories to determine which AI tactic can be helpful to them. The blog explains several ways AI can address cart abandonment.
- Personalized emails with product recommendations and discounts
- Chatbot engagement to answer questions and resolve issues
- Dynamic discounts based on customer behavior
- Cart reminders with push notifications
- Predictive engagement with chat support or popups
- Checkout assistance to streamline the checkout process
3. What are the benefits of using AI for cart abandonment recovery?
The blog highlights several benefits of using AI for cart recovery, including:
- Reduced cart abandonment rate
- Increased conversion rate
- Improved ROI from marketing campaigns
- Enhanced customer satisfaction
4. Is AI expensive for eCommerce businesses?
The blog doesn’t directly address the cost of AI solutions. However, it mentions businesses might be hesitant due to potential return on investment (ROI).
5. Is AI the future of eCommerce?
The blog suggests that AI is a significant invention that will revolutionize businesses, including eCommerce. It highlights the potential for AI to improve customer experience and daily lives.
