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How We Solve
Ep 126: How to Outsmart Cart Abandonment Using A.I.
Problem: In e-commerce, cart abandonment is shockingly high.
Your marketing is compelling. Your site UX and UI is sharp. Your prices are competitive. But, if you’re like most e-commerce businesses, you still struggle to seal the deal. Thankfully, new AI solutions are emerging that aim to reduce the lost revenue from abandoned carts.
There is a common value that you can read pretty much everywhere that’s around 72% of shopping carts being abandoned. And by shopping carts, I mean like not customers who come to your store, but like customers who add products to the cart and then they abandon the cart. So that’s around like 70% which is a huge value, taking into consideration that a lot of money’s spent bringing these customers to the side right on ads and advertising and marketing and emails. And this number is even higher for luxury brands.
Solutions to Avoid Bringing Businesses Back to the Stone Age
Even as e-commerce grows increasingly competitive and sophisticated, cart abandonment remains a persistent, pesky problem. That tells you one thing: the tactics everyone else is using to combat the issue aren’t working.
Brands that have this 70% cart abandonment rate have in place, which means that they already implement these procedures, but still the cart abandonment rate is at 70%. And these procedures are like removing these generic frictions, simplifying the checkout process, maybe implementing a one-click checkout process. They’re like solutions to fit all problems, which again, they don’t really work in general because they fit the average problem, but not like all the customers.
Tip #1: Don’t Rely Too Heavily on Coupons
If you try to buy back every lost customer with discounts, you’re only wasting your time– and your money. Instead, dig deeper to think more holistically about how to draw them back in.
Everything goes around discounting. Discounting and the promotion seems to be the only way right now to drive customer behavior, which shouldn’t really be the case, because there are so many things within the shopping experience that are really important aren’t related to the pricing.
Tip #2: Harness AI to Decipher Each Customer’s Unique Preferences
Not everyone thinks– or shops– the same. With the power of AI, you can personalize each customer’s shopping experience.
We found out that there are also many reasons that the customers abandon the carts again, which are not linked to the price– which we can actually solve if we can predict these issues reasonably beforehand. So that’s why we want built the AI– which is behind Behamics– which with where if it clicks in the beginning, can predict with a 95% accuracy if the customer is going to abandon the cart.
Tip #3: Streamline and Simplify User Experience
In certain cases, maximalist marketing techniques like aggressive product recommendations may do more harm than good. Use Behamics to understand the nuances of your customer’s preferences and deliver the experience that works best for them.
Some shop owners they’ll think like, ‘hey, let’s offer as many personalized recommendations as possible because the idea is that you want to grow the cart value as much as possible until they check out. Instead of making, like, just $10, let’s aim to get $200 worth of products in that card. But you’re right. If I came in with a mindset of I was ready to spend maybe 30 to 50, and I ended up walking out with like 200, now I have to spend the time to think about items I want to remove. Now I have decision fatigue, and I don’t necessarily want to do that. Then it’s like, okay, bye-bye.
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This interview is part of the How We Solve podcast. To hear more from industry experts who are solving everyday business problems, check us out on Spotify, Apple Podcasts, and on our website.
About the guest
Valon Xhafa
Valon Xhafa is the Founder of Behamics. Valon previously worked as an AI scientist at Google and at other research institutes, developing advanced AI approaches and algorithms. At Behamics, Valon is constantly working on finding new ways in applying AI to take the online shopping experience to the next level.
How can people reach the guest:
Linkedin: Valon Xhafa
Official Website: Behamics
LinkedIn: Behamics
Facebook: Behamics
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