In a booming eCommerce market where consumers now have unparalleled access to global brands at their fingertips, ironically traffic has never been so hard to come by and it’s having a knock-on effect on conversions – making them more important than ever.
There are two main reasons for this:
When presented with literally thousands of options, it’s human instinct to hesitate and want to carry out comparisons. How else can you understand how one differs from the next and which one is the best for your needs? But the downside of this is that it slows down the entire purchasing process, making it far less efficient for consumers and retailers alike. Not to mention that the whole saga starts again when it comes to repeat purchases.
This might lead you to invest heavily in customer acquisition as a proactive way to source new website visitors in the hopes of tempting them to stay – but that traffic needs to be optimized. This sentiment is echoed in Brightpearl’s Retail Tech Stack report, stating:
It’s a hauntingly familiar scene for many eCommerce marketers, traffic flowing in, but money still not changing hands. The issue lies in conversion, turning that web visitor into an actual customer by completing a purchase. But how is that achieved?
Read on as we delve deeper into what conversion rate optimization tactics are at play and how CRO is being leveraged within the eCommerce space.
The current state of play
According to Econsultancy’s Performance Benchmarks tool, the global average conversion rate for eCommerce retailers sits at between 1-3%. However, this does vary depending on the industry sub-vertical in question. As you can see in the chart below which displays data featured within Adobe’s Digital Index 2020 report, consumer electronics comes in at the lowest ratio of orders to visits at 1.4%, whereas gifts are at the top with an above-average 4.9% conversion rate.
There are many reasons for this disparity between the verticals. For example, it’s easier for consumers to impulsively buy cheaper products such as cosmetics. For products such as gifts there’s a time urgency attached, and deeply personal products such as home furnishings simply require more thought and consideration.
There’s also a similar disparity when calculating the average repeat purchase rate. Most estimates fall within the range of 20-40% and the higher the RPR, the better likelihood of your customers fully recognizing the value of your brand offering. This can, of course, be helped by tools such as email remarketing, and the Brightpearl Tech Stack Report shows that 62% of companies have invested in email marketing software over the last year. According to Listrak, initial emails, sent three hours after a consumer abandons a cart, average a 40% open rate and a 20% click-through rate. With this level of success, it would be criminal to simply let cart abandoners go uncontacted!
There’s also another key player in any eCommerce marketer’s technology stack, reigning king in terms of popularity and effectiveness for CRO: Website personalization. And, it certainly isn’t an industry secret – the Brightpearl Retail Tech Stack report suggests that approximately 64% of companies have invested in web personalization software in the last 12 months to tackle the conversion challenge. This indicates that brands are recognizing the power of personalization for conversion rate optimization. They’re using it to help them achieve their goal of improving conversion rates and increasing revenue through additional sales, with the help of technology.
So, with the technology available to solve the conversion conundrum, next, we need to take a closer look at who we are targeting. Conversion doesn’t just stop at new visitors. The key to sustainable business growth is to encourage repeat custom. However, each of these two user types carries their own set of challenges for retailers. Let’s talk more about that….
A dual-pronged approach to CRO
So, the reason that website personalization is particularly effective for CRO is that it is centered around the exact visitor in question. Whether they are new or existing customers, marketers need to be able to optimize the on-site experience in line with the user’s exact behaviors and preferences if we are to secure those all-important conversions.
There’s certainly a sense of ‘keeping up with the Joneses’ – with larger companies such as Amazon or ASOS able to offer a deftly personalized journey, it puts smaller e-commerce companies under pressure to offer a comparable experience. One-size certainly doesn’t fit all, and in that vein let’s delve deeper into the differences between the two types of visitors to your eCommerce website and the challenges at play.
1. New visitors
For new visitors, there really are three key actions that will determine the success of that customer journey for an eCommerce marketer. These actions are: sharing their personal data (thus allowing for remarketing), adding a product to their basket (indicating purchasing intent), and completing checkout (big tick, conversion achieved). Simple right?
Well, it’s rarely that easy. With the likes of GDPR and CCPA in play, tempting consumers to share their personal details for 100% compliance has become ever more challenging. Now that consumers understand the value of their data, they often expect something in return such as a discount or other incentive. But even then, consumers are simply not willing to share as much information as they used to. Many marketers find that the fewer the fields there are to fill in, the higher the rate of completion – so it’s a matter of prioritizing what information is most pertinent.
Add-to-basket rates are also important to track. They give marketers additional information about how appealing individual products are to consumers, based on the description and visuals on that specific product page. They also help to gauge the consumer’s intent to purchase by looking at their interactions with the site. According to a study by Little Data, an add-to-basket rate of anything more than 8.6% would put you in the top 20% of stores, so it’s clear that encouraging visitors to carry out this action is somewhat of a challenge.
But arguably the largest challenge of all comes with completing checkouts – approximately 60-80% of online shopping carts are abandoned before the customer completes the sale. Crazy fact: this means that your sales figures only reflect around a third of what could be achieved. Yet there is no single reason why customers abandon carts – ranging anywhere from unexpected shipping costs, a too complicated checkout process, having to create a user account, and comparison shopping. Many retailers simply lack the data to provide this clarity, meaning that they can’t effectively target users upon exit intent.
2. Returning visitors
For returning visitors, instead of the short and sharp wins, we need to look at longer-term results. The goals are simple, encourage your customers to buy more per session, buy more over time, and love your brand to the point that they’ll recommend you to their friends and family. But again, this is easier said than done.
When it comes to increasing AOV, there’s a balance to strike. As a brand, you want to introduce customers to other products they might like and of course attempt to upsell them and pull in additional revenue. However, the moment that this comes across as aggressive or ‘salesy’ the consumer switches off and can even prompt a visitor to abandon their cart. Remember that trust is hard to gain but easy to lose, so the impetus is on marketers to make sure that recommendations are spot on and in line with the user’s behaviors and preferences.
Next is CLV. Consider for a moment that 15% of all online shoppers are repeat customers. However, while they’re a relatively small percentage overall, returning customers actually make up about 1/3 of all online shopping revenue, and they spend 3x more than one-time shoppers on average. The challenge sits in improving the frequency of those visits and finding new and inventive ways to continually engage with customers over longer periods of time. Too much contact and the consumer feels harassed, yet too little and you risk being forgotten or pushed aside by the competition.
Finally, we come to building out brand advocates – aka god-tier customers that are worth 5 times more than your average customer. Brand advocates are not only loyal to your brand, but they also help to promote it, providing third party endorsements via customer reviews or word-of-mouth referrals. However, as you can imagine, brand advocacy is not something that is built overnight. To build a dedicated following takes time, effort, and resources – something not all retailers will have. The challenge is to find the most effective ways to have the most impact, whether it’s by testing out a loyalty program, online brand community, or competitions – the incentives need to hit the mark.
Turning your one-hit wonders into sustainable revenue streams
Earlier in this blog post, we touched on the effectiveness of website personalization when it comes to improving conversion rates. Well, the figures back it up. On average, Yieldify customers see an average improvement of 9.4% to their conversion rate, and this is achieved through implementing a methodology known as CJO or customer journey optimization.
But what is CJO?
At its very core, the definition of CJO is ‘Using a data-driven approach to improve the whole customer journey to get more conversions’.
But there’s slightly more to it…
Customer journey optimization or (CJO) is an evolution of Conversion Rate Optimization (CRO) that incorporates personalization but applies it to the customer journey as a whole. CJO looks at the entire lifecycle of each visitor and facilitates longer-term, higher yield relationships. This means customers get the experience they want, and marketers get the results they need.
Where does technology come in?
The Yieldify Conversion Platform is an award-winning solution for optimizing your customer journey. It delivers a combination of website personalization and email remarketing, both driven by behavioral segmentation, helping drive conversions, increase lifetime value and much more – all at 5x the speed of conventional personalization methods.
At Yieldify we believe that effective personalization starts with the right target (whether new or returning) and our technology platform allows you to easily create segments and adjust them in just a few clicks using a simple editor. As we established earlier, encouraging your visitor to add more to their cart can be risky, potentially even losing the conversion altogether. But by using behavioral segmentation you can target your up-sell and cross-sell messages only at those segments most likely to convert.
Using your segments that you’ve created using behavioral segmentation, you can then build your customer journey touchpoint-by-touchpoint. Thus, reacting to behaviors such as exit intent or reduced engagement to deliver content at the right time and place within the journey. The content you serve and how you serve it is what defines the impact of your website personalization. Use dynamic content – both In-Page and On-Page – to react to individual user behavior and test your way to your goals. For example, dynamic social proof is particularly effective for driving urgency and in turn, conversions within the session.
Finally, it’s also important to recognize that not every user is ready to buy. You can use this as an opportunity to build your email lists by gearing the experience towards email capture. Use flexible fields and the right timing to capture email consent and follow-up with personalized remarketing emails. That way you keep your brand front of mind, the user engaged, and heighten the chances of recovering any abandoned carts.
Ultimately, to effectively convert browsers into buyers and secure repeat business from returning visitors, the two categories of site users need to be treated differently. You need to serve them different messages at different points within the customer journey if you are to achieve the maximum level of impact.
The recipe for success is really that simple. When a customer reaches your website, give them exactly what they want by personalizing the customer experience, and leverage technology wherever possible to automate the whole process for you. The result? Saved time and resources, and higher conversions and revenue.
The key is to act now and utilize the tools available to help scale your business. Opportunity is rife right now in eCommerce for smaller players to really step up and take a slice of the pie. Ultimately, the brands that stay static and don’t adapt to the ever-changing consumer needs will be the ones left behind – no matter what size you are.
For more information on factors to consider when choosing a website personalization tool, check out Yieldify’s blog here which tells you all you need to know.