Imagine you walk into a store and select something you really liked but at the last moment change your mind. After a day or so you are walking on the road and look at a poster or banner to see that very item being advertised specifically to you - that's re-targeting.
These days with increased competition and shrinking margins, e-commerce players are not letting any sales go easily. And that's where e-commerce re-targeting comes into the picture.
Whenever you visit an e-commerce website and put something into a shopping cart a piece of information called a ?cookie' is stored on your PC. This cookie carries with it information about what item you put in the cart, when etc. In case you did not complete the purchase and left the site, the cookie still remains on your PC, lying dormant.
When you go onto a site where re-targeting scripts are running they will detect that cookie and through some sort of banner mechanism will remind you about that item which you discarded in the shopping cart. In effect prodding you to complete the purchase. In effect re-targeting you.
Cookies have always been controversial as a semi-permanent pieces of information lying on your computer which can be accessed by any site you are visiting provided they have the cookie identifier/name. All browsers provide functionality to either block cookies or remove them from your computer. So we do have control over them but most of us do not have the knowledge or time to monitor cookies on our PC.
Cookies do play a vital role in our browsing experience by remembering sites we frequently visit or in storing vital information for site functionality. So the debate continues on the privacy issues of cookies.
Anonymity is very valued in our online world as we navigate through our favorite websites. When an e-commerce provider can track our behaviour outside their site then it may cross a few lines. How far are they allowed to monitor our browsing?
They might argue that by visiting their site and adding products to the cart (or even just viewing a product) you have tacitly given them approval to track and sell to you.
Or does the fact that you did not go through with the purchase indicate that you are not interested in the item and should be left alone.
Being an e-commerce developer I feel it comes somewhere in the grey area. It's not that black or white.
Statistics from various sources say that re-targeting has around 10% conversion rates. That is significantly higher than normal banner advertising or email advertising. The fact that the customer might be partially committed or in two minds might help. Since the re-targeted ad will be very specific to you it works better.
Re-targeting needs very specific banner technology to catch the cookie and serve the ad specific to that cookie. Most banner networks may not be able to handle re-targeting. But many new networks have come up with re-targeting functionality built-in. And these networks are seeing tremendous growth due to the various e-commerce sites in India and abroad. This might be one of the defining trends in e-commerce for the coming years.
In conclusion I think there are equal advantages or disadvantages to re-targeting. But for now I feel its a valid marketing tactic which should be explored fully but should also be done tastefully and non intrusively.