It’s been known to happen — possibly only in Israel — that you get to the supermarket checkout with a big box of out-of-season strawberries, only to find the cashier asking: “Are you sure you want to buy these? Do you know how expensive they are?” That sweetly voiced query is sometimes enough to cause you, blushing, to take the fruit out of your shopping cart and leave it behind.
Online, there is no shopping cart-shaming. But there is lots of what is dubbed by professional marketers “shopping cart abandonment,” largely because the checkout process for online purchases can be prohibitively annoying, and it’s a huge problem for e-commerce retailers.
The average shopping cart abandonment rate is around 68 percent for online acquisitions. This jumps to a near-total 97% for acquisitions made through mobile phones, according to data compiled by Ventureburn.
There are a number of reasons for failure to follow through on an online purchase: lack of time, lack of patience, frustrating popups. And some barriers that are surmountable for website visitors become nigh unbearable for those using smartphones to shop, who also have to contend with small screens and keyboards and possible connectivity issues.
So companies that figure out how to bridge the gap between consumers’ wishlist and their final checkout will be in a very sweet spot.
Enter Israeli startup Datacrushers, which says its technology has the “secret sauce” that is able to identify who these shopping cart abandoners are, at what stage they are doing the abandoning, and why. And then the company helps ka-ching that final sale.
The nine-man firm, set up in 2014 by its CEO, James Oppenheim, a digital market and business development specialist, and Jonathan Schler, its CTO and a PhD in computer science and machine learning, uses algorithms to “detect what shoppers are doing on the site and then to turn that information into analytics that are presented to the merchant and allows them to take action,” Oppenheim said in a recent interview with The Times of Israel at the startup’s Jerusalem offices. “We identify abandoned revenue on the site, we show this virtually to the merchant — and then we provide the merchant the tools to go ahead and recover that revenue.”
What the company does, he said is help lead “that horse to water as far as we possibly can, after that horse has developed an interest in the product.”
Businesses that are already using Datacrushers technology include Affirm, which enables consumers to buy products online and pay for them over time; coffee producer Segafredo-Zanetti Spa; and Skiddoo, a travel website, according to the startup’s website.
The suite of software developed by the company can be easily integrated with any online platform, has multilingual support and works with any currency, Oppenheim said.
Unlike several technologies out there, “we are completely language agnostic — our tech will run across any language, any currency and any platform. Those are very big stumbling blocks for technologies out there today and our integration process is just about flawless — we can get a customer up and running the same day,” Oppenheim said.
The combination of data and the analytics provided to the vendors helps boost sales by up to 40%, the firm says.
“Most merchants are blind about their site,” said Schler — about their visitors, the average purchase per user, their most popular product. “We provide a whole set of tools and insights for the merchants so they can see; they are not blinded anymore.”
Similar tools already in the market are usually “very complicated to set up — over 70% of the merchants don’t have them set up right,” he said. In addition, some e-commerce platforms may have tracking tools, using a variety of apps, “but usually they are fragmented — they don’t talk with each other and their performance isn’t as good as ours. So, there are tools out there, but there is no single platform that combines the data.”
Trawling sites, gleaning information
Using artificial intelligence and machine learning, the software developed by Schler crawls the sites it is installed on and gleans information at three levels: the user level, the site level and the product level. The software understands how the products are categorized, and without any kind of human involvement produces insights for the merchants. For example, the software allows the merchants to see if the shoppers purchased or abandoned their cart; they can see what they searched for and what campaigns — email or mobile messaging – brought them back to their cart. The software can identify the platform used for shopping — whether it was a mobile phone or a PC and the operating system.
The software then provides marketing tools to better target customers, using automatically triggered emails and onsite messaging. Automatic emails are sent to shoppers when they have abandoned their carts to recover revenue; messages display the items that have been left in the cart, prompting users if perhaps they want to resume their shopping process; post purchase emails reach out to past customers – who are more likely to buy again – sending them an email with a value offer after a predetermined amount of time. Shoppers can also share their carts across multiple platforms – via email or Facebook messenger.
The software monitors the overall performance of the vendor’s marketing campaigns as well. The data collected can show if there is a decline in sales in a particular product and perhaps a price downgrade is advisable; or, conversely, that at a particular price range a product is doing great.
“We are probably one of the first or the only company in the e-commerce space who makes sure our analytics are actionable,” said Jeffrey Tower, the chief revenue officer at the firm. “Because what good are analytics if you can’t do anything with them.” And most importantly, he said, “we do it on a massive scale.” Datacrushers works both with individual e-commerce merchants/sites and with major e-ommerce partners and aggregators who have hundreds to thousands of client sites, he said.
Competitors to Datacrushers include US firm Bluecore, which has developed an automated marketing software for ecommerce brands; and conversion optimization platforms MaxTraffic, based in Latvia; Canada’s Granify, and Boston -ased Rejoiner, which operate in the cart-abandonment space.
“Datacrushers operates in the crowded market of e-commerce software solutions. Specifically, the company provides a cart abandonment recovery and analytics solutions,” Zirra, a market and company analysis firm based in Tel Aviv, said in a report on the company.
And while Datacrushers is in an industry that is predicted to grow rapidly within the next few years and the firm has a client base that includes “market leading companies from the relevant industries,” the firm must “display a strong differentiating factor in order to surpass the clutter,” Zirra said in the report.
According to a Forrester report, the annual spending on e-commerce software, implementation, and maintenance by US firms is predicted to be worth some $10 billion by 2019, up from an estimated $5.1 billion in 2014.
Markets and Markets reports that the retail analytics market is growing at a compounded annual growth rate of 19.7% and is predicted to be worth $8.64 billion by 2022. Factors facilitating this growth include growing internet penetration, increased use of data-intensive platforms, the rapid adoption of social media, and advancement in such technologies as machine learning, artificial intelligence, and augmented reality.
Annual growth in electronic payments will grow in the “high-single digits range for years to come,” wrote Citi analyst Josh Levin in a July 2016 note. As merchants adapt to this trend, there’s “a lot of low hanging fruit” for payments companies “to pick, given that much of today’s merchant payment acceptance technology is surprisingly primitive.”
These companies have the opportunity to further increase their profitability by providing value-added services to merchants, Levin wrote.
Data Crushers has raised some $1.4 million from friends and family but is looking to raise some $5 million in a series A round soon, to further develop the product and to grow the business, including in the US, Europe and China, Oppenheim said.
“The way we see the industry going is that we are going to be seeing more AI layered into the e-commerce environment,” Oppenheim said. “Tech companies that are powering e-commerce are our natural allys and strategic partners. The dream of this company is to be an elementary part of the reconstruction of the new backbone of e-commerce.”
Full disclosure: James Oppenheim was chief revenue officer and in charge of business development at The Times of Israel from January 2012 to August 2015