Shoppers don’t want a mediocre, dated experience, they want one that will excite them and keep them coming back. This means you have to be on top of your game throughout the entire sales process.
eCommerce can be divided into three categories: grabbing the consumer’s attention, convincing them to check out, and getting them to return to your store. These categories are made up of six simple steps to succeed in online retail. The steps revolve around data mining to make more informed decisions.
1. Assortment Optimization
Attracting consumers to your store requires you to have the products they’re looking for. It can be hard to make sure you have the products that shoppers are looking for, especially if you have to project for different seasons months in advance.
Using competitive intelligence to perform a gap analysis on your inventory against the competition is a great way to see where you stand out and where you have some product overlap. This is useful when it comes to measuring your current inventory, but how can you plan ahead and order the right items when you’re planning your assortment?
It’s also important to make sure that your products can be competitive. If you see a product climbing the best seller ranks but you can’t purchase it at a low price, it may not be worth selling. It’s also important to analyze the prices that your competitors are selling it at. If you can’t offer it at that price yourself, you might be better off passing on the item.
2. Price Optimization
In 2016, mindlessly competing and undercutting your competitors is definitely not the name of the game. Retailers used to tell horror stories of attempting to chase retailers like Amazon on price, and in return taking a loss on sales. This price warfare demolished margins and provided retailers with a sense of anger against Amazon.
Dynamic pricing takes various factors into account to change your prices and test the results. These factors include seasonality, competitor prices, time of day, and more. Machine learning algorithms used in a dynamic pricing strategy recognize if a change went well, makes note of the various factors at play, and remembers that for future changes.
Algorithmic repricing is the future of pricing strategy. It can curb price wars substantially and provide retailers with competitive prices while reaping the benefits of wide margins. It’s no longer about having the lowest price, it’s about having the right price at the right time to draw shoppers to your store.
3. Optimize Promotions
Mobile commerce is on the rise, as is social commerce. Twitter’s partnership with Shopify allows retailers to sell using the social platform and connect directly with shoppers via their timelines. Pinterest’s buyable pins are another great way to get the word out about your business, while directing shoppers to your site to finish making a purchase.
Comparison shopping engines (CSEs), like Google Shopping are other fantastic ways to promote your store. Google is the most frequently used website in the world, and if you aren’t advertising on it then you’re missing out on a huge opportunity. Make sure that you optimize your prices, especially on CSEs, since you’ll be going toe to toe with numerous retailers.
4. Optimize Merchandising Strategies
First, you need to make sure your site’s layout is designed to appeal to the human eye. Your homepage needs more visuals than text, and it needs to be easy to navigate. Make your webstore clean and concise to prevent a high bounce rate. Simple navigation tools and categorizing your store’s offerings logically are two of the easiest ways to do this.
Speaking of your offerings, leading a shopper to an out of stock page is only going to infuriate them. Make sure your inventory levels are managed properly to prevent out of stock situations. If you look at your stock levels as a line graph, it should look relatively flat with little to no volatility. Don’t wait until you’re almost out, establish a stocking threshold and automatically re-order when that threshold is reached.
5. Optimize Shipping and Return Policies
So you’ve attached all the necessary bells and whistles onto your site, good for you. Your price is right, and you’re practically on your way to the metaphorical “showcase showdown,” or in the frame of retail, the checkout screen. But the battle is far from over, as there are plenty of things that can go wrong from this point forward.
Free shipping can be as effective as a seasonal sale. In a way, free shipping is a discount or promotion in and of itself. No one wants to pay for the service that comes with the delivery of their respective item. There are a couple of ways to absorb the shipping cost. The easiest way is to implement a free shipping threshold. Roughly 58% of shoppers will actually add more items to their cart to qualify for shipping, so capitalize on their yearning for free shipping and offer it to them.
The best way to combat buyer’s remorse is a liberal, hassle-free return policy. Approximately 58% of shoppers look for a hassle free return policy when checking out, and for a good reason. If they can just return the item, they don’t have to worry about being stuck with it if they don’t like it. If you’re a multichannel retailer, offering free returns in-store is the easiest way to do this. That way you can help the shopper steer clear of the frustrations of the post office.
6. Optimize Retention Policies
Congratulations, you’ve won over the customer! You just acquired so much data from your customer, and it’s time to use it to your advantage. It’s seven times less expensive to sell to a pre-existing customer than to acquire a new one, and here are a couple of ways you can improve customer retention and loyalty.
When your shopper checks out, give them the option to either check out as a guest or create an account. Incentivize them to become a member with personalized discounts and notifications when new items are in stock. Use their email to send them promotional material, since 70% of shoppers want discounts emailed to them for items based on their purchase history.
If you didn’t win over the shopper, there’s still plenty you can do. One of the most effective ways to get a shopper back to your store is with retargeting ads. These ads use browser cookies to advertise items in their cart and follow them around the internet. They aren’t intrusive, they just sit calmly on the side bars of different sites as banner images.
All of these steps are possible with the help of data. Whether it comes from a customer or a competitor, data is gold for online retailers. The future of online retail lies in the act of data mining. It’s the oil of the 21st century, and it’s fueling your store to optimize your various selling strategies.
We aren’t saying that you’ll become an eCommerce powerhouse like Amazon overnight, but these steps are crucial to increasing sales, profits, and conversion rates. If you’d like to know more about how data can improve your eCommerce presence, learn what Wiser can do for you.
Contributing writer: Brian Smyth