Promotions, Discounts and attracting customers back
Promotions, Discounts and attracting customers back
Sales sales everywhere, but how do we know what is a bargain, what appears to be on special and what is simply good promoting by a business? Consumers wised up last year realising times were tough, and a frugal spending nature was required. Many turned to online where bargains were a plenty, and bricks and mortar sellers returned fire by promoting heavily reduced stock more often than before. And now we have the market as it stands with retailers filling page after page of our newspapers and letter boxes and TV with sales – and online sellers need to re-attract and re-engage the bargain savvy consumer. Consumers have increased their ability to find value for money, retailers are desperate to lure them back or introduce their brand – so how do we as online businesses gain the ability to stand out of the crowd.
Recently I was in the US as part of my employment with ChannelAdvisor and it struck me how well traditional bricks and mortar retailers link business through their websites – and how simple it for them to do so. Whilst the Australian market has some way to go to catch up to the ecommerce adoption by traditionalists there are several ways that current sellers online can further enhance the prospect of return shoppers. Current market trends with Australian eCommerce have seen a move to free postage; the largest local online market eBay has strategies and policies in place to promote businesses offering free post over others. But what other promotions or discounts are being offered out there to bring business back as well as luring new shoppers.
When I went into a GAP store in North Carolina, I purchased some pyjamas for my daughter and received a voucher on my docket – the shop assistant explained that if I was to go online and complete a survey; I would get a 20% discount of my next purchase; too easy. I went back to the hotel filled in the survey and voila a code word to present on my next visit to the GAP; and I could have also redeemed this online if I chose. What a brilliant concept; I give five minutes of my time regarding their store layout, staff friendliness and general shopping trends and I have 20% off. So did this work, you bet – I returned to the bricks and mortar store the next night and brought a coat for my wife; and would you believe it another voucher to do an online survey and receive another 20% off – further discussions with the shop attendant revealed that the survey invitation is random.
The above example highlights one method that can help a retailer enhance return traffic in a very cost effective way; but what about gaining the conversion in the first place – after all traffic doesn’t pay the bills.
ChannelAdvisor conducted some survey’s of online shoppers are found that consumers now spend less money online than they did from our survey in Q1 2009, with 11 percent more consumers reporting they spend $0-$20 per month on online purchases. At the same time, consumers reporting they spend over $76 per month on online purchases declined by nine percent. This trend coincides with a change in how consumers spend their time online. While we found that consumers did not materially increase or decrease the overall time spent online, browsers are devoting a higher percentage of their time to researching products and prices. This is contributing to a growth in search volume dedicated to online retail, the amount of time spent on retail-specific sites, and more effort devoted to seeking out coupons and promotions. For example, consumers are using more sophisticated, specific searches to seek out the exact products and deals they want. As a sign of this trend, Google recently reported an increase in searches comprised of three words or more; a good Google ad words campaign is critical to capturing customers early; as most shoppers begin their research and subsequent shopping with the search giant.
ChannelAdvisor also found that consumers are becoming more trustful of brand-independent retailers and are more apt to make product buying decisions if given enough information and a comfortable shopping experience. Almost 80% of survey respondents were likely or very likely to purchase from an unknown store if they were presented a product with a perceived advantage over another known store. Lower prices, better return policies, lower shipping costs, etc. were more important to consumers than previous experience with an online vendor.
This finding should convince retailers of any size that it’s worth the effort to offer the best value they possibly can to consumers. For instance, less well-known retailers can be satisfied that consumers are less susceptible to splashy marketing and are diligently looking beyond the well-known online brands for the best offer and product information. This finding plays directly in to the hands of the current Australian online market maturity!
Free shipping, peer reviews/ratings, free returns and the ability to view products from multiple angles are the most influential purchase drivers on a retailer’s storefront, consumers report. Free shipping and returns have increased the most in influence since our last survey – as did the ability for consumers to verify the validity of a retailer through “trustmarks” such as Hacker Safe, Verisign, etc.
These trends should not be surprising – consumers want to ensure they are maximising their time by purchasing products from retailers that offer the best price and the best value. Furthermore, they want to feel secure in their purchase decision, as evidenced by the increase in influence of rich imaging product views and trustmarks. Consumers not only want to ensure they’re going to receive the product they sought out to purchase, but also want a guarantee that their personal data will be safe.
Online consumers are using the Internet in new ways. Most of them start their product searches with Google, and are focusing more on perceived overall value. As shopping habits evolve, consumers have became comfortable in more online places; they look for more information in the exploratory phase of the buying process; and they seek out the most compelling online experiences, value propositions, brands and promotions. In 2009, consumers traversed the full breadth of the e-commerce landscape using marketplaces, search engines and comparison shopping sites interchangeably ensuring they receive the best possible price.
How can modern retailers leverage consumers’ evolving shopping habits for certain profits in 2010? Retailers need to put their products on multiple channels to ensure they’re directly in consumers’ paths. This strategy encompasses three vital steps:
1. Distribute your products to all the online marketplaces so you can present a convincing value proposition to shoppers early on, while they’re still in the exploratory phase of the purchase process.
2. Drive these highly qualified consumers to your website with the right product, the right pricing and the right timing to take consumers further down the conversion tunnel.
3. Convert shoppers into customers by influencing buying behaviour on your website with compelling product presentation, pricing, shipping costs and promotions.
The time is right online shoppers to start making the necessary changes so that all is in place for the second half of the year; and bricks and mortar guys – have a look at Big W’s online store – a good example of presenting more products to more shoppers; and with some smart cross promotions and points of difference who knows how well it could perform.
Christopher Morley an employee of ChannelAdvisor; ChannelAdvisor helps the world sell online with applications that enable retailers to efficiently distribute their products across multiple online channels, drive shoppers to those products and then convert those shoppers into customers. The ChannelAdvisor platform empowers retailers to distribute their products across multiple online marketplaces, comparison shopping sites and search engines. With application features such as keyword generation, to in-depth reporting, to our merchandising engine, retailers gain the tools they need to easily fine tune and analyse their marketing efforts to drive more shoppers to their products. Rich media offerings and storefront applications enable retailers to provide an engaging online shopping experience that represents their brand and is optimised to convert shoppers into customers. In 2008, ChannelAdvisor managed over $2.6 billion in gross merchandise value (GMV) on behalf of leading retailers around the world including Vodafone, Brother, HP, B&Q, and Schuh. www.channeladvisor.com.au