In this blog we look at four vital ecommerce benchmarks and share how focusing on customer loyalty and retention helps you improve your results.
As the barriers to market entry are decreasing, more and more ecommerce brands are launching daily. Reports estimate there are between 12-24 million ecommerce stores currently active. On top of that, fast-fashion and FMCG have made it difficult for brands to differentiate on the basis of their products alone. Consumers have a mountain of choice to pick from, making it difficult for e-retailers to stand out.
This is why cultivating brand loyalty has now become more important than ever. And since product alone no longer cuts it, customers are searching for brands that offer intangible benefits. The key differentiator is becoming brands’ ability to offer an elevated customer experience that becomes the basis of one-to-one personal relationships. To achieve this, e-retailers have to look at the following key metrics and ensure they keep them upwardly trending.
1. Revenue per visit: engage your customers beyond the first purchase
Ensure you keep engaging you customers beyond their first purchase and encourage them to increase their spending every time they return to your site. For example, beauty brand, SpaceNK, email their members points-available updates that remind customers they have points waiting for them in their account.
This encourages them to return to spend those points on another purchase sooner. You could even use point-reminder emails to showcase other products related to the customer’s first purchase, so they’re excited to add more to their cart.
By keeping the dialogue open, you’re ensuring shoppers will return to your site more often and purchase more while they’re there.
2. Average order value: grow the value of your loyalty program
On average, e-shoppers add 2.45 items into their cart per purchase. Austria, Germany and Switzerland, however, hold the highest amount of items (4.4) relative to the rest of the world. For retailers trading with these countries, a fuller basket means more cash passing through their digital tills.
Average basket size and value is one of the most important metrics for any online retailer. It shows who your most valuable customers are so you can focus on growing the relationship you have with them. As acquisition costs are rising, exploring new options that encourage existing customers to spend more is a cost-effective way to increase turnover and profits in the long term.
In fact, the average basket value of a customer who uses a loyalty reward in a purchase is 39% higher than those who don’t.
Encourage this positive behaviour by expanding the value of your loyalty program and rewarding customers for more than just purchases. Do this by including rewards for non-transactional activities within your loyalty program; such as product reviews or Instagram follows.
When your customers know how easy it is for them to earn rewards, they’ll be happy to engage with your brand and loyalty program to earn them. And, once they have more points or offers in their account, they’ll add more to their basket to use them.
3. Conversion rates: create relationships with your customers
Conversion rates show how much of your site traffic is completing a purchase. It is a valuable metric, but hard to achieve as it can be difficult to entice your customers to complete their purchase. This means that all your marketing efforts and expenditure to drive people to your sire could be a waste if the customers you’re attracting are not converting. Instead, focus on building relationships with the customers you already have to encourage them to make a purchase every time they arrive on your site.
Start by showing your loyal customers you care: give them one-off surprises, samples and discount vouchers. You could move them up a loyalty tier or give them exclusive access to discounts and new products.
By surprising and delighting them with offers they’ll want to engage with, your conversion rates will increase when they return to your store.
You can also re-engage customers you may have lost to competitors with an offer they can’t ignore. This could be a one-off, double points event that will grasp their interest and entice them back to your store.
Use offers to stimulate a dry sales period or re-engage estranged customers, but ensure you have a strategy in place to keep those customers coming back to your brand (rather than your discounted prices).
4. Cart abandonment rates
Cart abandonment is a challenge for every retailer. You can do all the leg-work to get shoppers to add items in their baskets and still have them abandon them at the checkout. In 2018 global cart abandonment rate hit 80%.
The culprit? Customer trust.
The solution? Use your existing customers to build confidence.
Encourage your already loyal customer base to champion your brand. 84% of consumers trust online reviews as much as they trust their friends. So an online review can go a long way in validating the integrity of your brand and your products – especially in the world of online shopping where customers can’t touch or try on your products. This method will build confidence around your online offering, so your customers will be less likely to abandon their baskets.
You could also reduce doubt by rewarding your existing customers for sharing their experience with your products on social media. By encouraging your existing customers to share how your products look in real life, curious shoppers will gain the confidence to complete their purchase rather than abandoning you at the checkout.
Eyewear brand, Iolla, use their social media channel to showcase customers wearing their products.
They reward clients for sharing their Iolla products on social media by giving them a free pair of glasses. By using their loyal customers to model products in actions, they provide new customers with genuine images to browse before completing their purchase. They also make existing customers feel valued by endorsing their posts on their social media channel, rewarding them for sharing and giving them the opportunity to be part of a larger Iolla digital community.
The Bottom Line
The ecommerce industry is ripe with opportunity. To keep up and differentiate from the crowd, online retailers need to step up their game and improve on the four metrics outlined above. By focusing on nurturing customer loyalty and retention, ecommerce brands can improve on these metrics while also building relationships with their loyal customer base and sceptical prospects.