How to Boost Your E-commerce Business Without Reducing Prices
The growing popularity of ecommerce has attracted many sellers to the digital platform to sell their products. Gone are the days where a huge capital was required to select real estate, set up the store, and buy products in bulk. Ecommerce has given sellers of all scale the opportunity to do business irrespective of their size and financial muscle. Additionally, this has also encouraged the market to be filled with new product ideas and innovations and elevate customer satisfaction. According to new data, ecommerce business transactions could rise as high as $5 trillion by 2020. Although that seems to be a bright prospect for ecommerce businesses, the majority of them still struggle to take off within their first year. So what are some of the challenges faced by companies when entering the ecommerce business?
Attracting the right customer
There’s a vast difference between an online shopper and offline shopper. Most offline purchases are driven by impulse buy, packaging, and brand recall. Online shopping is driven by user recommendation, product research, social media feedback, and product review. A lot has changed in the way consumers consume content and communicate online. Retailers should figure out who their audience is and how they can effectively attract them without overspending. Since e-commerce gives businesses the chance to segment their customers and show targeted ads, it becomes difficult to pinpoint the right customer to send promotional messages.
There are multiple channels and tools available in the digital medium to reach out to the customers. Businesses should leverage PPC, SEO, email, display ads, native ads, remarketing, mobile, social, and affiliates to help drive qualified traffic to their online store. They should be visible when their target audience is online on the internet. Since all similar competitors are competing to grab the attention of similar target audience, generating quality traffic for the website is a challenging task.
Building brand and trust
In the traditional store format, consumers would build trust with the companies only through their physical presence. The store layout, size, sales representative, and support employees would all work together to build the brand and trust amongst the consumers. However, in the digital world where physical presence is almost nil, it’s hard to build brand trust. Also, customers are very demanding, and failure to deliver on one aspect of the customers’ demand would lead to failure in retaining them.
We have come a long way in product personalization since the days of Henry Ford’s mass-produced black cars. Today, customer demand personalization and companies are judged on their ability to provide a personalized experience. Although ecommerce companies have the data of their customers, it can get challenging to understand how to use that data. One of the biggest ecommerce challenges faced by businesses is the delivery of customized content and promotion in the form of advertisement, special offers, coupon codes, and so on.
Increasing conversions and retention
One of the most effective ways of increasing revenue for a business is to widen the conversion funnel and retain the customers. Online customers browse thousands of products and use the cart to bookmark items. At a certain point, it is necessary to convert such customers into paying ones. Additionally, leads generated from website and emails should also be converted into customers. Once the customer is onboard, it is necessary to retain the customers and increase their lifetime value, which, in turn, delivers revenue to business in the long run.
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The introduction of ecommerce has brought disruption to the traditional markets and marketing techniques. Traditional market tools and concepts such as STP, 4P’s, and advertising doesn’t seem to be sufficient to excel in the world of ecommerce. Today, a marketing manager has a foray of tools available to succeed in the ecommerce marketspace. E-mail marketing, Google Adwords, remarketing, SEO, and affiliate marketing are some very powerful promotional mediums to name a few. Such tools weren’t in existence or unheard of a decade back. So how can one master ecommerce marketing and grow their online customer base driving their business revenues?
Growing your e-mail list
E-mail marketing is still the most cost-effective marketing tool available out there. The best part of this tool is that e-mail is free, the sender only needs to incur a fee to get hold of e-mail database or for automated e-mail services. By paying a nominal fee, a marketer can get their message across a large number of audience. However, the email open rates and click-through rates are relatively lower. So it is essential to growing the email list in order to increase your chances of success. E-mail marketing can work wonders when people browse specific items but not complete the purchase. In such a case, email marketing can serve as a reminder or provide an incentive to the customers to complete the purchase. So it is essential for ecommerce websites to place opt-in forms in the right place and use exit-intent popups. Additionally, they can also use giveaways to urge people to give away their email address.
Upselling and cross-selling
Upselling and cross-selling opportunities have been limited in the traditional retail setting. However, with the advent of ecommerce, such activities have been made a lot easier. Ecommerce websites upsell products by listing similar high-end products that meet the specifications. It also provides an option to choose a higher specification or newer model of the same product. Additionally, features such as “Customers who bought this also bought” and “recommended for you” provides a list of complementary products which can be bought alongside the intended product. Also, ecommerce websites such as Amazon also show bundled pricing for products and its complementary items.
Garner product reviews
Today’s consumers are very smart and do a lot of in-depth research before buying the product. They tend to trust and base their purchase of customer review for the product they are looking to buy. Greater the number of reviews and its positivity, higher the chances of conversion. Additionally, for technology-related products and new brands, people are not willing to take the risk, which is why they go through numerous product reviews before finally deciding to buy. The reason is straightforward, customers trust words of other customers than the brand itself. To increase product reviews, ecommerce companies should send out an e-mail and in-app reminders to ask if they liked the product and are willing to write a review for it. If that doesn’t work out, then a good ecommerce marketing practice is to send out a discount code for their next purchase for leaving a review.
In ecommerce marketing, it is much easier to sell to past customers than to acquire new ones. The average conversion rate for a repeat customer is much higher than a first time customer. Additionally, if people buy from your website, they are likely to buy again given they have a positive experience with their past purchase. Consequently, it is essential to retain a customer and introduce loyalty programs to persuade them to buy more. Loyalty rewards can be in terms of points gained against spends, discount coupons, free shipping, complimentary gift, early access to new product, or upgrade to premium membership.
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Ecommerce is one of the most booming industries in the world. In 2018, it is expected that the e-commerce sector will cross the $50 billion mark. Every online retailer in the market dreams of being a successful and well-known brand. However, the scary truth remains that the more popular your brand is, the more likely it is to attract unwanted fraudsters’ attention. Online stores are undoubtedly a more comfortable and easier way to reach out to the target customers. However, security of confidential user information and other forms of ecommerce fraud have always been a significant concern. Although the ecommerce fraud rates and security threats have stabilized in recent times with merchants becoming more vigilant, it is always better to stay prepared for the worst.
Four Strategies to Reduce Ecommerce Fraud
Automated transactional risk scoring
Online retailers can utilize specific logic and settings to distinguish normal purchase behavior from risky transactions. Ecommerce fraud risk is calculated based on multiple data factors and assigned a numerical score for each transaction. The scores, which serve as relative risk indicators, determine the next course of action for that transaction according to a merchant’s preferred operating procedures.
Transactions with risk scores exceeding certain thresholds can be determined by either the merchant or the ecommerce fraud solution provider. It can then be automatically placed into different categories for further action. In the usual case, a transaction is either immediately accepted or rejected. However, in case a transaction falls in between these two categories, it can be flagged for manual review.
Post-purchase transaction management
It is important to note that the life cycle of ecommerce fraud management does not begin and end with the purchase attempt. To continue handling ecommerce fraud attempts proactively (as well as to resolve chargebacks and disputes efficiently), merchants need to have a database that can maintain detailed records. This can be used to understand transactions trending over an extended period. Re-presenting and resolving fraudulent chargebacks can be a complicated and time-consuming effort. Databases of detailed records can also help easily extract details about a transaction to help win re-presentment attempts. Also, it is essential for online merchants to evaluate the appropriate level of risk management they can administer internally versus outsource, depending on the budget, staff, and other resources available.
Adjusting fraud rules and parameters
One common pitfall to avoid is the “one and done” mentality. Too often, merchants dedicate a resource to configuring fraud parameters once but fail to ensure that the parameters are still relevant weeks, months, or years later. Fraud trends evolve rapidly, and detection tools need an equally quick response to remain effective. Regardless of which tools merchants are using to prevent ecommerce fraud, those tools should be referenced against reports and analytics on a regular basis. Online retailers must train their staff to react to critical occurrences, such as a sudden attack from a fraud ring in a particular geographical location. These may require significant—but temporary— changes to the existing ecommerce fraud settings.