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Young consumers know how to get deals online

Posted on Jul 6, 2015

By Don Davis Editor in Chief : Internet Retailer

Nearly half will intentionally leave items in a shopping cart in hopes of getting a better offer from the retailer.

 Many consumers put items into an online shopping cart and then leave, and enough e-retailers send follow-up emails to those shoppers offering discounts that consumers have caught on to the game.

47% of consumers ages 18-34, and 37% of all shoppers, intentionally leave items in an online shopping cart in hopes that the retailer will come back with a better offer, according to a survey released Wednesday by Shop+, the retail unit of Mindshare North America, a global media agency that’s part of worldwide advertising conglomerate WPP.

That’s just one example of the many ways consumers—and particularly younger ones—have figured out how to get better deals online. Here are some others:

  • 36% of millennials—those in the 18-34 age group—and 24% of all adults survey share an Amazon Prime account with friends to get free shipping. (Amazon.com Inc. allows members of the same household to use a single Amazon Prime account, which costs $99 per year to get free two-day shipping and other perks.)
  • 39% of millennials and 30% of all adults sign up for price-tracking services that notify them when a good they covet has gone on sale.
  • 70% of millennials and 59% of adults overall search the web for promo codes before they purchase anything online.
  • 39% of millennials clear their Google search history in hopes of getting a better price from an e-retailer, versus 31% of total adults.)
  • 36% of millennials and 30% of all adults have a separate email address just for online shopping, a tactic that lets them receive marketing offers without cluttering the inbox they use to communicate with friends.
  • 26% of the younger age group and 17% of adults overall say they entered a phony birthday when signing up for an email newsletter in hopes of getting a quick discount.

"Every day, consumers are growing savvier and savvier in their online shopping habits," says Joe Migliozzi, Shop+ lead for Mindshare North America. "That's not necessarily a bad thing for retailers—it's a different kind of engagement. But brands do need to understand this shift in behavior, and adapt their marketing plans in creative ways." The results are based on a survey of 1,000 U.S. adults.

Sending follow-up emails to consumers who leave items in shopping carts can be an effective tactic, as many of them do come back and buy. Email service provider Listrak says the conversion rate on those types of emails averaged 21.73% last year, versus 3.69% for a standard broadcast email to a retailer’s entire list.

But offering a discount in those emails is a bad idea, says Chad White, author of “Email Marketing Rules” and research director at Litmus, a provider of email analytics and design services. In fact, White made rule No. 93 in his book: "Avoid offering special incentives messages triggered by a non-purchase."

“The biggest problems with including incentives in shopping cart abandonment emails is that they train customers to delay purchases and train them to be more price-sensitive,” White says. “The former causes you to lose sales to competitors, while the latter causes you to give away margin needlessly.

“People abandon carts for a variety of reasons, only one of which is price. Rather than treating cart abandonment emails as a promotional tool, treat it as a service tool. For instance, customers will store items in carts as they comparison shop and search for the right product, so use these emails to simply remind them about the item in their cart and about the benefits of shopping with you, such as free shipping and easy returns. In many cases, a simple cart reminder will be as effective as an email providing an additional incentive.”

White says some consumers abandon a shopping cart because they’re not sure the products they selected are right for them. “So use cart abandonment emails to highlight related and alternative products,” he says. “Predictive intelligence tools can have a big impact here. Adoption of this tactic is growing quickly.”

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