eCommerce as a share of retail has been growing rapidly for some time now. But in 2020, at the start of the pandemic, we saw unprecedented growth. The equivalent of 10 years of eCommerce growth happened in just three months.
Source: Statista Report – Retail e-commerce sales worldwide from 2014 to 2025
This huge spike was driven by a number of factors, with a significant contributing factor being the rise in food and beverage retail moving online.
However, it wasn’t only this product area and importantly, the growth wasn’t just driven by younger generations, the habit change has run across all demographics.
Additionally, research shows that the growth in eCommerce over the next five years is expected to continue. Globally an increase of 8% of retail sales coming from eCommerce and in the UK specifically, a further 5% growth.
But the growth in eCommerce as a sales channel creates a few challenges:
- Increased competition from less sophisticated retailers driving up customer acquisition cost (usually seen in increased spend on PPC)
- For new eCommerce entrants, customer experience, which is now central to online success is something which takes time to deliver and get right
- With customer acquisition costs increasing, customer retention is more important than ever
- Remaining single channel in approach to eCommerce leaves retailers exposed
All of this means that eCommerce retailers need to:
- Get their customer acquisition strategies optimised and delivering
- Devote as much effort to customer experience as customer acquisition
- See customer retention as a marketing stream in its own right
- Ensure their systems can handle a multi channel approach in an intelligent way
Customer Acquisition for eCommerce
Effective customer acquisition for online retailers starts with sound SEO and PPC.
Whilst good SEO requires a strong combination of on and off page work, eCommerce retailers should look at a number of key areas:
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Is your website copy SEO friendly?
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Is your platform mobile friendly?
In the last few years we know that Google indexes websites mobile first. I.e. do you have a responsive design in place for your website. We also know that mobile shopping, particularly via social media is becoming more popular…
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Do you have SEO-friendly URLs?
Bad URL structure can severely hamper your SEO performance, is yours easily understandable and readable or is it filled with unintelligible text?
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What’s a good page loading speed?
About 1.5 seconds is a good rule of thumb, less than 3 is important. There are a host of page load speed test sites available, such as Google’s PageSpeed Insights.
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Do you have a product feed optimised for Google?
Ensuring your product feeds have all the information you need so that they’re appearing on Google shopping is becoming increasingly important.
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Does your platform have a built in blogging feature?
Regularly updated and relevant content is as important for retailers and eCommerce websites as anyone else.
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Do you use 301 redirects?
When a product is no longer available, don’t lose the traffic and don’t let it fill your site with bad links. Implement 301 redirects and ensure good site performance and retain traffic.
- Are your robots.txt files up-to-date?
From a Pay Per Click marketing perspective (PPC), you need to think about a number of key areas to get your strategy correct:
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Which platforms should you focus on?
Choosing the right platforms is about audience understanding. Where is your audience? How do they shop? Where do they research? This consumer understanding then creates a fit with the platforms for advertising you’re going to choose.
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Is your CMS linked to social media stores?
Social shopping via Facebook, Instagram, Pinterest, and soon to be YouTube is growing. Allowing your customers to order without leaving the platform they’re on is convenient and easy. Link up your CMS and make this part of your mix.
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Are you using shopping ads?
Shopping ads grab your customers at the buying phase. Ensuring you’re listed and your feed is well set up allows you to compete here.
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Why should you do remarketing?
Remarketing is providing online retailers with a cost effective conversion method for customers who have visited and left their websites. It’s low cost, and can often account for a high percentage of conversions.
Moving Multi-Channel
As we discussed earlier being ‘single channel’, given the increased competition in the market and the increased acquisition costs resulting from that, could well create a challenging scenario.
Multi-channel eCommerce, utilising the right software infrastructure, and the right marketing can answer the three fundamental questions eCommerce retailers need to answer.
- How can I acquire new customers
- How can I grow sales and profits
- How can I retain customers
Utilising Marketplaces as part of your customer acquisition strategy
“The margin I make on a sale on Amazon/eBay/Google Shopping etc isn’t worth the effort!”
What if we looked at this differently? What if we say multi-channel marketplace sales as a customer acquisition strategy, and your last margin was actually your cost of acquiring a new customer?
Not only does this answer the question of how to acquire more new customers, but it also leverages every online retailer’s major issue, stock, and turns into a customer acquisition tool.
Turning marketplace customers into your customers
With the first element of customer acquisition looked at, we then need to understand how we can transition marketplace customers into direct customers, increasing margins and allowing us to take control of that all important customer experience.
The key thing here is understanding the role that multi-channel is playing, and building a plan to transition customers to direct. The right software will give us customer data from all sales, wherever they happen, and we can leverage that. Whether that’s inserts into packaging, direct communication, customer surveys and feedback or other digital techniques, we need to make shoppers into customers, and then build the relationship for life time value.
Retaining Customers
The two fundamental pillars of customer retention for eCommerce businesses are Customer Insight (i.e. understanding of customer behaviour), and Customer Experience (delivering on that insight to give the customer great service).
Good software tools can give us great customer insight, such as:
- Behaviour – frequency/value/customer who bought this may also buy this
- Marketing – segmentation
- Personalisation – relevance
- Communication – feeds your marketing plans to retain and grow lifetime value
Once we have this data, our customer retention strategy can focus on:
- Customer care
- Reliability
- Consistency
Great – but where do I start?
Clearly there’s plenty on the to do list for an eCommerce retailer. Choosing what you focus on is going to depend on where you are now and the gaps in your business. Is it new customers, retaining existing customers, customer care, systems…?
The key thing is to have a plan to address the key issues in your business, but be aware of the wider environment and consider the changes that are happening and how you can take advantage of them.
To learn more about increasing sales for eCommerce businesses, you can download our recent webinar.
If you’d like to learn more about implementing customer acquisition strategies for your eCommerce business – get in touch with the Digital Marketing experts at Digital Glue.
