The Double-Edged Effects of E-Commerce Cart Retargeting: Does Retargeting Too Early Backfire?

Abstract

Consumers often abandon e-commerce carts, so companies are shifting their online advertising budgets to immediate e-commerce cart retargeting (ECR). They presume that early reminder ads, relative to late ones, generate more click-throughs and web revisits. The authors develop a conceptual framework of the double-edged effects of ECR ads and empirically support it with a multistudy, multisetting design. Study 1 involves two field experiments on over 40,500 customers who are randomized to either receive an ECR ad via email and app channels (treatment) or not receive it (control) across different hourly blocks after cart abandonment. The authors find that customers who received an early ECR ad within 30 minutes to one hour after cart abandonment are less likely to make a purchase compared with the control. These findings reveal a causal negative incremental impact of immediate retargeting. In other words, delivering ECR ads too early can engender worse purchase rates than without delivering them, thus wasting online advertising budgets. By contrast, a late ECR ad received one to three days after cart abandonment has a positive incremental impact on customer purchases. In Study 2, another field experiment on 23,900 customers not only replicates the double-edged impact of ECR ads delivered by mobile short message service but also explores cart characteristics that amplify both the negative impact of early ECR ads and positive impact of late ECR ads. These findings offer novel insights into customer responses to online retargeted ads for researchers and managers alike.

Reality Check: Infusing Ecological Value into Academic Marketing Research

“…Reporting the raw data (especially in a visual format) is an important step in explaining that the focal effects are directly observable in the real world. For example, in their field experiment testing the effects of early versus late reminders for abandoned e-carts, Li et al (2021) show the raw response rates to these reminders before embarking on a more sophisticated analysis. Of course, if an outcome of interest has multiple drivers, it may not be that easy to offer model-free evidence for a focal main or interaction effect.…”

Why Do Some Consumers Still Prefer In-Store Shopping? An Exploration of Online Shopping Cart Abandonment Behavior

“…For example, by building realistic shopping environments where respondents operate the online shopping process in their natural state, scholars can assess inhibitors of OSCA that arise at any time by monitoring respondents' clickstream data or face-to-face communication (Rubin et al, 2020 ). Using experimental scenarios also allows the observation of differential responses by segmenting based on time (Li et al, 2021 ), product categories (Zhao et al, 2021 ), and selling platforms (Jiang et al, 2021 ), which would tap into more valuable information. In addition, future researcher can used experimental design to compared the different generations (Generation X, Generation Y, and Generation Z) toward the perception of OSCA and how it could have different behavioral outcomes on OSCA and intention to visit brick-and-mortar retail stores.…”

Online shopping cart abandonment: A review and research agenda

“…From the review, we found that OSCA (e.g., Cho et al, 2006;Jiang et al, 2021) and purchase intention (Li et al, 2021;Zhao et al, 2021) are the most frequently studied outcomes. To clarify the drivers of OSCA research, this study examined it as a dependent variable reflecting the non-purchasing behavior of consumers.…”

“…Both OSCA (Huang et al, 2018;Jiang et al, 2021) and purchase intention (Li et al, 2021;Zhao et al, 2021) were found to be the most frequently studied outcomes of the OSCA context.…”

“…(n = 21) of all studies, followed by China with 11 studies (21.15%) and India with 5 studies (9.62%). In the cross-national context, involved two or more countries as group comparisons (e.g., Cho et al, 2006;Huang et al, 2018;Li et al, 2021;Zhao et al, 2021), indicating that the importance and value of international are acknowledged by scholars.…”