Digital retail opportunities are on the rise. 39% of UK consumers have been encouraged to buy products online that they hadn’t before considered, and 42% of shoppers intend to permanently do more shopping online. eCommerce will have been a lifeline for most brands, or indeed a new venture for FMCG embracing D2C online sales for the first time.
But with more players online, loss of market share is a real risk. In these trying times, staying competitive while preventing margin erosion is critical. Preventing revenue loss can help you create a more stable, viable and reliable business model.
Now that we’ve entered the social distancing era, mastering the specifics on online sales and ecommerce profit margins is critical. This article is about helping you do just that. Here are our top 4 ways for retailers to prevent revenue loss online in 2023 and beyond.
1. Provide customers with a strong incentive to buy
Sometimes, customers simply need a push to convert. Retailers should be trying to provide customers with incentives that benefit them, especially right now. If you’re not trying to understand your customers and give them what they need, you may lose revenue. Here are some examples retailers can use to increase ARPU online.
Reduce shopping cart abandonment
One scenario where customers often need incentive is with shopping cart abandonment. The rate of shopping cart abandonment is close to 70%, but there are a few ways that online retailers can reduce this rate. For example, when a customer abandons their shopping cart, send them an email with a promotional discount they can’t resist, whether that’s money off or maybe even a free gift with their purchase.
Pro tip: The help of a promotion engine to generate and distribute unique coupon codes would be great here. But more on that later!
Use browsing history
Unique offers can entice customers who have been browsing your site or that have previously purchased from you. Target the old spending habits of customers using their data history and use this to provide them with targeted offers that are geared toward what they want. This can be provided either through your website or as a direct email.
Utilise the right tools
To increase the power of these discounts, use promotion engines. These are automated engines that can create personalised vouchers, making it easier to come up with a cutting-edge campaign to increase revenue. Instead of worrying about the misuse of promotions, a promotion engine can provide single-use, unique offers that can be tracked — to see what works with customers and what doesn’t using objective data.
Once you’ve got potential customers on your website, you can then offer discount codes to incentivise conversions!
2. Utilise affiliate marketing opportunities
Affiliate marketing is a growing trend in the online retail space. During the past few months, it’s become even more popular. The affiliate channel is becoming more diversified as the world changes and adapts to COVID-19, including new channels and opportunities previously unavailable within the affiliate model, such as:
Closed-loop affiliates (e.g. Bluelight)
Influencers wanting to operate in the affiliate space
Content-led affiliates (bloggers, content sites)
These new channels are blurring the lines between traditional affiliate channels and models. In order to take advantage of these opportunities, retailers require advanced technology to monitor and track performance.
A promotions engine will help you provide a range of offers to affiliates and allow you to reach more consumers while retaining control of your unique codes, preventing code misuse and providing value to people. These can then be generated, validated and monitored all within the software, allowing you to tweak your affiliate campaigns as necessary.
3. Keep inventory under control
Online retailers need to make sure they stay on top of their inventory right now. This means thinking about items that might be selling at negative margins (or not at all).
Try to update the current inventory to reflect what people want — use data and feedback to figure out what that actually is. And then figure out what’s not selling. Heavily discount certain items to get rid of distressed stock, as this will open up more space for items that might be in higher demand right now.
Retailers who monitor their metrics regularly will be able to react in real time to changing trading conditions and be able to give customers what they need more accurately. This means you’re able to keep up with market trends and prioritise increasing revenue.
Use promotional software
Once you collect the data you need to see what customers are buying or what return customers are looking for, you can use promotional marketing strategies to push that inventory. The right promotional software can ensure you entice customers with great offers without eating into your margins. In fact, utilising the right strategies can increase revenue as discounts can often encourage customers to spend more.
4. Customer retention is critical
Gaining new customers right now is vital, and retailers should capitalise on the increase in changing online shopping habits. Once you get those customers, it's critical to keep them. Retailers are going to more easily prevent revenue loss and get more from their customers if they focus on customer loyalty. Retaining customers is simply cheaper than trying to acquire new ones.
Advance the customer experience
Prioritise trying to improve the eCommerce customer experience. Mass customisation is no longer working. In Raconteur’s Future of eCommerce, John Raap, chief strategy officer from AIM-listed Attraqt claims that retailers must “know each shopper’s true intent and know why they are there” in order to fully understand where customers are within the buyer journey and how to adapt to that. Retailers must be agile and use consumer psychology, merchandising and machine learning to better predict a customer’s next actions.
The right technology can also help you further the consumer experience both during and after the purchase. Retailers that invest more in the post-purchase experience — for example, by offering multiple carriers when it comes to delivery and returns, giving customers more choice — are more likely to satisfy customers and prevent revenue loss.
Suggested reading: Want to learn how to improve customer experience in eCommerce? Read our blog '5 Ways to Improve Customer Experience in eCommerce'.
Improve customer loyalty
Think about putting more time and money into your current loyalty tactics. The primary goal is to show customers that they are valued. Provide current, loyal customers with exclusive offers such as:
Regular or increasing discounts to encourage and reward ongoing engagement
A coupon for a percentage off of a large purchase
VIP access for new product lines due to launch soon
Free delivery codes at certain times of the year
A promotion engine can help you distribute these kinds of offers. It’s vital you provide these in the right way to show your loyal customers that they are valued — and offers like the ones mentioned can help encourage them to spend more with you. Retaining these customers will ensure you’re driving the revenue you need in these challenging times.
Predict what customers want and provide incentivises
Understanding what your customers want and providing it will help you stand out from the growing crowd of online retailers. You need to take advantage of changing consumer habits by monitoring them and reacting in real-time to offer value where possible — whether that’s by providing incentives in the form of discount codes on your site or by utilising the expanding affiliate marketing space.
Retailers need to refine the strategies they’re using to acquire new shoppers and then keep them while retaining their existing customers in order to protect their margin. This can be done with the help of promotion engines such as Uniqodo. This will help retailers provide controlled single-use codes on a large scale that can be monitored and tracked to find out what works best for your business.