By 2040, only 5% of total purchases will be made from brick-and-mortar stores. While this may sound grim statistics for those who love the in-store experience, the trend is apparent since 2007. The share of eCommerce purchases from the total purchases then was 5.1%, which has tripled to 16% in 2019 since then.
If you are running an eCommerce venture, you will find these statistics exciting, including other predictions of the considerable growth in revenues. However, as the sector grows, so does the competition. As the competition increases, the cost of customer acquisition (CoA) also goes up. As the CoA goes up, you must ensure that you keep every customer with you for as long as possible. That is why Customer Lifetime Value (CLV) is one of the most crucial metrics that e-commerce companies track. As the CLV goes up, CoA goes down. As CoA goes down, you can acquire more customers without increasing the budget.
Trust Is The Foundation Of Engagement
But eCommerce sites do not enjoy the kind of engagement customers still have with their neighbourhood shops. Many factors make it easier for physical stores to retain their customers. Ease of access, distance, and visibility are some of the factors that work in favour of the physical shops. It is also easy for the owners or the staff of the store to create a personal bond with customers.
This personal engagement and physical presence generate trust. A survey established that 57% of customers will consider purchasing only if the business has more than a 4-star rating. In the physical world, the ratings might be used for the first buy, but all for all subsequent purchases, the customers will rely on their own experiences.
So for the eCommerce businesses, generating and maintaining trust becomes paramount. These efforts are a mix of process and technology efforts. It does not need to too complicated either. For example, Recchiuti, a marketplace for chocolate confectionaries that we helped build, has a whole page dedicated to describing their culture. They also offer behind-the-scenes glimpses to potential customers through their Instagram account. In general, for enhanced trust;
- Ensure that your supply chain can ascertain and control the quality of the merchandise you are selling from your eCommerce site.
- If external sellers are using your website to sell their merchandise, define service & quality benchmarks and enforce them. The factors should include delivery & shipping policies and time, return policies, a match between what’s displayed on the site and the actual product that gets delivered, and many others.
- Be transparent to the customers about these standards and policies.
- Establish mechanisms for a customer to register their grievances easily and if the need is, escalate those.
- Let customers share their honest feedback and respond to those in a truthful manner. Always maintain a human voice. Canned responses might be convenient, but not very useful. Of all the customers that read reviews, 97% of them look at the business response.
While this is not an exhaustive list, these are bare minimum steps you should take to generate trust in the customers’ mind.
Reward The Loyalty
Most of the ventures do understand that you should give customers an incentive to return to your business for their next purchase. With this incentive, they are more likely to purchase again as compared to when they don’t have any carrots. That’s why there are so many loyalty programs which offer discounts and memberships to other establishments, and a lot of different things. However, loyalty programs and materialistic rewards are not the core factors that bring customers to you time and again. If we assume the inspiration of returning customers can be represented as a pyramid, at the base is the engagement. Loyalty programs will be at the very top.
The core part of this pyramid is how connected the customer feels with your store. We connect with people and entities that identify our unique traits, that recognize what we like and what we don’t, and calibrate their behaviour to accommodate us. From the technology perspective, this is personalization.
While one may argue that eCommerce stores already offer personalized recommendations, everyone understands that those recommendations are for you to up-sell and cross-sell. The real personalization provides value to customers. It makes their interactions on the store easier. With the technology that’s available today, it is possible to offer advanced personalization by identifying various patterns of consumer behaviour.
Instead of just offering recommendations for the products with the same attributes, this kind of personalization is more valuable for customers.
Keep the Communication Open
The marketing has a rule of seven. It suggests that customers need to come across your product or business for seven different times before they make the purchase decision. In the era of incessant advertising, lower attention spans, and a variety of alternatives, it becomes even more important to remain visible. But mass advertising is no longer as effective as it was earlier. You must attempt connecting and communicating with customers at a personal level.
However, sales communication has changed now from the era of direct mail marketing. The fundamental remains same, but direct mail marketing was explicitly sales-oriented. It had only one action to place the order. But that communication is transactional. Today’s communication is more engagement oriented, especially when we are talking about loyalty. It needs to connect with the customer at a more emotional level. That is why you see the changing nature of TV commercials. This emotional connect is why influencer marketing is so popular. Many ventures are coming out with ways to add immense value to the customers while increasing the engagement. For example, NeoCocoa, an online portal which we developed, runs a podcast, Lettuce Wrap. Through this podcast, the entrepreneurs behind NeoCocoa, Christine Doerr and Tammy Tan share their experiences, suggestions, and advice to others.
The brands that can do it, succeed in ensuring the loyalty of the customers. This principle is true for businesses with physical stores as well as for eCommerce.
Technology Is There. It Needs To Be Leveraged.
Using technology to drive customer engagement through personalization and communication is neither difficult nor expensive. Often, instead of having a comprehensive, all-encompassing view, technology is adapted and implemented in a piece-meal manner. We at BillionApps will be happy to help you chalk out a holistic eCommerce strategy that enables you to acquire and retain customers by leveraging advanced technology capabilities. Reach out to us at [email protected]