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CASE STUDY Technology Small/Midsize Business Marketing & Sales Through Targeted Emails, Crocs Entices Customers Back to Their Carts A sk any online retailer: Abandoned Casual C73 M19 Y40 K1 C65 shopping M29 Y79 K22 C61 M20 K3 of their existence. carts are theY78 bane shoemaker Some estimates say at least 70 percent of online Crocs is shoppers leave items in their carts without ever clicking the “buy” button. Abandonment rates for recovering lost fashion and footwear sites are even higher. revenue by C0 M60 Y100encouraging K17 C28 M88 Y70 K19 C48 M89Most Y84 K49 M66 Y61don’t K52 do anything about it. But by onlineC61 retailers shoppers to June 2014, casual shoe company Crocs decided to take action to recover lost sales attributed to the dreaded return to their abandoned shopping cart. “Our goal was to reengage abandoned site visitors who placed products in their shopping online carts. carts and left before completing their purchase,” says Y28 K28 C78 M52 Y28 K6 1 BY L AU R E N G I B B O N S PAU L MISSION: CONVERT BROWSERS TO BUYERS Abandoned shopping carts have been a problem for Crocs ever since the company opened up shop online. In recent years, cart abandonment rates approached a disheartening 95 percent. Crocs is far from alone in facing this problem (see Figure 2, “The Scope of the Problem”), but that doesn’t do much to soften the blow. FIGURE 1 Crocs at a Glance HEADQUARTERS: Niwot, Colo. NUMBER OF EMPLOYEES: 4,000 Kelsey Vendetti, email marketing manager, North INDUSTRY: Casual footwear America, at Crocs. “We knew we were leaving money YEAR FOUNDED: 2002 on the table.” ANNUAL SALES: $1.2 billion (2014) Founded in 2002, Crocs shot to fame in 2007 when its colorful clogs were embraced by boaters, gardeners PAIRS OF SHOES SOLD: More than 300 million and children. Today, the company sells more than 300 POINT OF INNOVATION: Croslite™ material, a footwear styles, including boots, wedges and loafers. proprietary technology that makes Crocs shoes Closing more online sales in an ever more competitive soft, lightweight and odor-resistant, according to market was a matter of getting “the right content in front the company. of the right customer at the right time,” says Vendetti. SOCIAL RESPONSIBILITY ACTIVITY: Since 2007, With today’s busy lifestyles, some people need a the Crocs Cares program has donated more than 3 gentle reminder or an offer of help to get that job million pairs of shoes to people in need all over done. Providing that input in a non-pushy way was key. the world. Source: Crocs Toward that end, in June 2014 Crocs tested a 1. http://baymard.com/lists/ cart-abandonment-rate JUNE 2015 © Copyright 2015. Forbes Insights. All rights reserved. marketing conversion platform aimed at turning “Abandoned shopping carts are probably the biggest around its soaring cart abandonment rates. The system problem that e-commerce websites have,” says Glenn identifies shoppers who leave items in their cart Gow, CEO of consulting firm Crimson Marketing. without completing the purchase and sends targeted “[E-tailers] spend a lot of money trying to get people emails at specified intervals to encourage them to to the website and get them engaged. The Holy Grail finish their purchase. Since the full implementation of is the checkout. If the shopping cart gets abandoned, the tool went live at the beginning of 2015, Crocs has they struggle to try to figure out why.” improved its abandonment rates by nearly 5 percent— better than expected. Plans are in the works to expand the use of the marketing platform to tackle abandoned browse and abandoned search. FORBES INSIGHTS 1 FORBES INSIGHTS CASE STUDY Prior to implementing the marketing conversion solution, Crocs used a homegrown cart recovery program that triggered up to two emails, the first of which was sent 24 hours after a shopper abandoned Since the full implementation of the tool went live at the beginning of 2015, Crocs has improved its abandonment rates by nearly 5 percent—better than expected. FIGURE 3 Recoverable Revenue $4 TRILLION: Amount of merchandise forecast to be abandoned in online shopping charts this year the cart and a second that followed at the 72-hour 75%: Percent of shoppers who have abandoned mark. “This ‘send cadence’ was not optimized,” says shopping carts and say they plan to return to the Vendetti; in other words, 24 hours is too long of a time retailer’s website or store to make a purchase lapse before sending the first email. “By then, people had either moved on and bought something somewhere else or forgotten about it,” she says. “Our program was not serving our customers well enough 63%: Percent of abandoned cart merchandise that is potentially recoverable by online retailers Source: BI Intelligence and SeeWhy to get them back to the site.” Now, with the automated solution in place, browsers At the same time, the company did not have sufficient who abandon items in the shopping cart receive an internal technical development staff to devote to email shortly thereafter, followed by another message creating a solution. “We knew we needed an a day or so later and a final one, possibly containing a automated solution to help fight abandoned carts,” discount code, if the purchase is still unconsummated says Vendetti. up to a week later. ENGAGING WITH CUSTOMERS “We wanted these messages to be customer-focused When Vendetti and her team looked for a tool to rather than pushy,” says Vendetti. To that end, the first recapture cart abandonment revenue, their top message assumes something went wrong on Crocs’ priorities were ease of implementation, quick side with the transaction that prevented the purchase implementation and ease of use. Early on, they chose a from being completed. The second message is, “How full-featured marketing conversion solution that would can we help?” The third one—if necessary—introduces give them the functionality to expand beyond email an incentive, asking, “Does your shopping cart need a campaigns in the future. little push?” “We try to take the approach of ‘Let us FIGURE 2 The Scope of the Problem help you’ vs. ‘You forgot to buy.’ That is important,” she says. Forecasted online sales 2014 Crimson Marketing’s Gow applauds Crocs’ use of email $1.4 trillion follow-ups, particularly the one that blames the site. Abandoned online sales 2014 $3 trillion Source: Rakuten The pilot program took about six weeks to get up and “It’s an acknowledgment they may have made a mistake,” he says, even if the site most likely was functioning just fine. “They’re making their users feel good,” Gow adds. “I give them huge credit for that.” running. “That was on our side, creating the emails and setting up the tags,” says Vendetti. The tagging was However, he cautions all e-tailers against overuse of done on Crocs’ website so that the tool could link the discounts as an enticement. “Word gets out really fast, items the shopper had been looking at to the follow- and then your shopping cart abandonment rates will up email messages. The trial program offered a actually go up as people hold off on making the sufficient proof of concept, and Crocs went ahead with purchase until they get the discount,” Gow says. Save a full implementation in January 2015. these offers for VIP customers and use them sparingly, he advises. 2 FORBES INSIGHTS FORBES INSIGHTS CASE STUDY FIGURE 4 Email Effectiveness Fairly effective Marketers see email as one of the most effective digital channels (see Figure 4, “Email Effectiveness”), Very effective but critical to the program’s success, Vendetti believes, Email 2012 2014 31% “We are seeing incremental revenue grow month to month. It is exciting.” Online display —KELSEY VENDETTI, EMAIL MARKETING MANAGER, NORTH AMERICA, CROCS Mobile 2012 is that the messages avoid the hard sell. “Our 13% 34% 30% 2014 24% 36% 23% 2014 2014 service-level campaign and not come across as overly 19% 37% 24% Overall, the cart recovery campaign is generating additional incremental revenue each month and 32% 18% 33% growing. “We’re thrilled,” says Vendetti. “This program 25% Social media 2012 says. “It is important for our team to treat this as a marketing-heavy or pushy.” 33% 2014 2012 messages so they can return to the Crocs.com website at their own pace to complete their purchase,” she 19% Advertising search engine 2012 customers now receive timely, engaging, personalized 30% 18% 34% has proven the value of real-time triggered emails.” • ABOUT FORBES INSIGHTS 22% Base: 581 senior marketers Sources: CMO Insights/Accenture, 2013/2014 Of all the digital channels, email has seen the highest growth in perceived effectiveness (percent of respondents). Crocs’ email campaign nurtures customers as opposed to pushing them to buy. “It’s continual outreach to someone you know something about. You want to create a great shopping experience that will bring customers back,” says Gow. Studies also indicate that buyers who abandon carts are recoverable by savvy online retailers (see Figure 3, “Recoverable Revenue”). Forbes Insights is the strategic research and thought leadership practice of Forbes Media, publisher of Forbes magazine and Forbes.com, whose combined media properties reach nearly 50 million business decisionmakers worldwide on a monthly basis. Bruce Rogers CHIEF INSIGHTS OFFICER Brian McLeod DIRECTOR, NORTH AMERICA Writer: Lauren Gibbons Paul has written extensively on customer relationship management and customer experience management for more than 15 years. EXCEEDING EXPECTATIONS Certainly, the numbers suggest Crocs is very much on the right track with the cart recovery campaign. “We didn’t have a clear conversion rate goal so [the 5 percent boost] exceeded our expectations,” Vendetti says. Gow agrees that the reclamation rate is impressive. “The email cost is almost nothing because you automated it, so those additional sales go right to the bottom line,” he says. “We are seeing incremental revenue grow month to month,” adds Vendetti. “It is exciting.” FORBES INSIGHTS 3 CASE STUDY Technology SPONSOR’S STATEMENT Y28 K28 C78 M52 Y28 K6 C73 M19 Y40 K1 Small/Midsize Business Marketing & Sales Achieving One-to-One, Personalized Engagements Through Real-Time Contextual Marketing C65 M29 Y79 K22today C61 are M20more Y78 K3digitally Consumers and socially connected than ever before. In fact, according to a study by Vivaldi Partners Group, 48 percent of U.S adults can be considered “always-on” consumers: Contextual they use three connected devices everyday, get online multiple times a day and do so from at least marketing three different locations. As a result, they are much more knowledgeable about products and services. systematically Forbes Insights spoke with Rosa Hu, director of solution marketing at SAP, about how marketing can enables reach these new consumers. 0 M60 Y100marketers K17 C28 M88 to Y70 K19 C48 M89 Y84 K49 C61 M66 Y61 K52 How has marketing evolved to keep up with constantly changing customer expectations? mass-personalize Marketers have been striving to deliver highly personalized and relevant customer engagements at customer scale. With today’s technology, marketers can cost-effectively deliver one-to-one personalized experiences by engagements, using real-time contextual marketing. Contextual marketing systematically enables leveraging marketers to mass-personalize customer experiences by leveraging insights into customers’ unique insights into intentions and motivations, derived from relevant data sources in real time. Such data can include unstructured data and implicit online behavior to target and connect through personalized customers’ engagements with customers and prospects alike. unique intentions and motivations, What does contextual marketing entail? derived from Context comes from understanding who each customer is, what they are doing and what they are likely to do. Developing that full context enables you to market in a way that is uniquely relevant to relevant data each customer. Intelligent customer engagement cannot rely on predefined rules to anticipate every sources in real possibility; rather, it must instantly calculate the right tactic based on proper attribution and resource time. optimization. Contextual marketing enables marketers to engage the customer in an intelligent way, nudging them toward a purchase rather than distracting them if they are already on that path. How can businesses market to an audience of one through contextual marketing? An average marketing department has over 36 different customer management and interaction systems, often relying on separate tools for email, Web, social listening, social marketing, mobile apps, etc. Most of these systems offer little or no integration with other systems, and by the time it’s all pulled together, the customer data is no longer relevant. SAP’s hybris Marketing solution enables marketers to unify the customer view by consolidating key customer information from across internal and external data sources. Only then are marketers able to deliver contextually relevant experiences by leveraging in-the-moment opportunities across channels that facilitate customers along their journey. The hybris Marketing solution also helps align marketing teams and empowers marketers to run campaigns and programs with speed and agility. For more information about hybris’ Marketing offerings, please visit www.hybris.com/marketing. Sponsored by