Tips for Beauty Brands To Reduce Online Order Abandonment

Digital-first brands, many born on Instagram or YouTube, have shaken up the retail beauty industry. Established legacy brands that remain fixtures at large department stores like Macy’s, Saks Fifth Avenue, and Bloomingdales are taking notice of how quickly some of the up-and-comers have gained momentum and captured market share.

However, there are many lessons that emerging cosmetic companies and legacy brands can learn from each other. While new brands have an active presence across social media channels, legacy “beauty counter,” brands have established trust and gravitas among their customers, some of whom have been purchasing their products for decades.

When it comes to nimbleness, online-only brands have a head start for a variety of reasons. They typically have a much shorter product development cycle, as well as smaller catalog sizes and product ranges, which makes it easier to stay relevant and on top of the latest trends, such as ethical, environmentally conscious products and culture.

Conversely, legacy brands tend to have lengthier product development cycles, making it harder to gain momentum and trust within eco-friendly, sustainable, and conscious culture movements.

With all the differences between the latest beauty brands and the more traditional legacy cosmetics businesses, there is one issue they have in common: a loss of e-commerce sales and revenues due to abandonment.

Order abandonment is not a new problem for online retail, and 2020 was no exception. In fact, according to Statista, online retailers experienced an 88 percent global cart abandonment rate last year. At more than 85 percent, abandonment for beauty brands isn’t much better.

The million-dollar question that beauty companies are trying to answer is: how can the issue be addressed effectively to reduce the potential for cart abandonment and increase the likelihood of conversions?

Abandonment Quandary and Remedies

The past 12 months have marked an especially brutal year as the world was forced to adapt to contain a global pandemic. Retailers were forced to temporarily close or make a complete pivot to keep their business afloat. Brands are now trying to recoup losses from 2020 and re-engage with customers as we all adjust (slowly) and look forward to life after Covid-19.

One bright spot last year was the astounding growth and popularity of online shopping. According to the retail analyst group NPD, while there was a 19 percent decline in retail sales in 2020 as compared to 2019, there was a 46 percent growth in online sales overall.

However, the beauty retail segment struggled because of plummeting demand for cosmetics during the pandemic. This aligns with findings based on consumer data from 52 of our retail clients, which assessed shopping behavior across more than 25 million purchases made early in the pandemic (April to September 2020). Our data showed that visits dropped by 11.52 percent, and revenues decreased by 3.7 percent during this timeframe.

Now that the pandemic is waning in many places, the demand for beauty products is rebounding, and brands have a new, much larger, more digitally-savvy audience who will continue to shop online for the beauty products they’ve come to love.

Solutions To Curb Cart Abandonment

Both legacy and newer beauty brands can leverage the latest technology advancements to decrease the perpetual cycle of cart abandonment that negatively impacts top-line revenue.

There are proven and effective strategies that combine the personalization concepts of social proof, scarcity, product recommendations, and others with improving conversion rates and driving revenue gains dramatically.

The tactics, which are most effective when layered, include:

Discount offers: When a visitor displays behaviors that might indicate they’ll exit, such as a sudden click to a different page, a pop-up discount can help the shopper think twice before abandoning their items.

This strategy will be most effective if the messaging delivered is based on user data. For example, if the customer is a sales shopper, the offer could be 20 percent off the entire purchase or the ever-popular free shipping.

Encourage regular product replenishments: Because beauty brands are in a unique position to understand the average replenishment times of products, such as foundation, lipstick, or eyeshadow, this data can be used to re-engage customers who may have added an item to their cart but then “bounced” from the site.

Sending an email reminder that it’s time to stock up on a previous purchase increases the chance they’ll return and buy both items.

Leverage the FOMO: The fear of missing out can be a major motivation for customers not quite sure whether they want to buy a specific item. Alerting customers that the product is in low stock may help buyers make the decision to buy because they may not get the chance to later.

Re-target returning visitors: It’s common for shoppers to add an item to their cart and then leave the site, only to return later. When they do return, deliver a message reminding the customer of their basket details and encourage them to checkout (or continue shopping).

Use email to invite customers back: If a shopper left items in their cart and then left the site entirely, trigger an email via your email service provider (ESP) to encourage customers to come back and complete their purchase. Be sure to set rules for email opt-out (or opt-in) lists, the frequency of emails, and other considerations that will ensure a “light touch” and avoid annoying the shopper.

Final Thoughts

Abandonment is an ongoing issue for all multichannel retail brands. However, because of the nature of cosmetics, which many shoppers prefer to try on first, this is an especially challenging issue for beauty retailers.

To decrease the potential for abandonment, brands must use a combination of personalization tactics that encourage the shopper to give a new product a try, delivering a shopping experience that engages the customer and lets them know you appreciate their business.