Improving financial margins is one of the main priorities for ecommerce retailers. Not only do investors in public companies demand it, but it’s also key to survival for privately-held ecommerce companies.
Global ecommerce continues to accelerate. In 2020, it reached £3 trillion and is expected to achieve £4.5 trillion in sales in 2024.
There are now more opportunities than ever to seize large chunks of the market. Businesses are investing in innovative new technologies, international expansion and multichannel initiatives. However, one core focus of these investments directs attention to the customer experience. Ultimately, that’s the best way they can differentiate themselves in an increasingly crowded marketplace.
Here, we explore nine ways in which your business can grow its share in the competitive ecommerce market.
Improve website performance
Digital performance is key to the success of online retailers. If you force your customers to wait as your page loads, you’re probably going to lose them. According to a Google study, two seconds is the absolute limit of time you can expect your customers to wait before they’ll abandon you.
Even the BBC found it lost an additional 10% of users for each additional second its site took to load. Every second counts online. Invest in tuning your website so that it loads properly – especially on mobile platforms. It’ll pay off for you.
Personalise the customer experience
Almost every consumer realises today that personalisation is a two-way street. They have to give you data – voluntarily – and agree that you can use it in the ways you specify.
In fact, 63% of consumers are interested in personalised recommendations from the ecommerce stores they shop at, according to Accenture. Plus, most of them are willing to share their data in exchange for some additional benefits:
- Coupons and loyalty points: 64%
- Exclusive deals: 60%
- Gain points and rewards: 56%
- Special offers for items that interest them personally: 53%
In 2019, Nielsen reported that 24% of shoppers will buy from an overseas retailer for premium goods. This is up five percent from 2016, showing a clear trajectory of growth for international markets. If your customers aren’t shy about crossing borders to get the goods they desire, why should you remain focused on your own backyard?
Although international ecommerce expansion is a key growth opportunity for retailers, it can be a daunting prospect. You have to deal with:
- New currencies
- Different languages
- Different buying habits
- Unfamiliar fraud threats
- Logistical and distribution challenges like taxes and trade agreements and customs paperwork.
Luckily enough, a number of service providers have stepped up to do these things for you. You shouldn’t have to worry about getting on the global ecommerce stage.
Establish (or expand) your physical presence
Despite all the rumours of its death, physical retail is actually in a period of transformation. But little has been made of the fact that a large number of new physical stores opened as well. Boring retail might be dead. But exciting, innovative hybrid brands like Apple, Sephora and others are thriving.
Why is this happening? Because stores that have survived the collapse of retail space are places people want to visit. If you provide the right customer experience and make a true commitment to omnichannel retail, the customers will come.
Be socially responsible
Consumer sensitivity to sustainability and diversity are also creating new revenue opportunities for ecommerce retailers. Today, consumers will pay more for:
- Ethical business practices
- Branding that mirrors their diversity
A 2015 Nielsen survey investigated consumer behaviour of 30,000 people across 60 different countries. Across the board, consumers are willing to pay extra for one thing: sustainability. This is especially true for millennials. Impressively, while 66% of all global consumers are willing to pay more for sustainable goods, a further 73% of millennials are. Who said it ain’t easy being green?
Offer ultra-convenience and gratify customers instantly
Convenience was an early driver of ecommerce. Most signals indicate that it remains a deciding issue when consumers are weighing whether to shop online or in stores. It also determines how much they are willing to pay.
Today, convenience is at the core of the success of digitally native retailers. They offer friction-free ordering interfaces, liberal return policies, or try-and-buy programs. This makes it simple to try out several pairs of jeans before picking a winner.
Don’t treat your customers like fraudsters
Fraud continues to eat into online retailers’ margins. And it isn’t just because of fraudsters making off with goods without paying – it’s the fear of fraud causing merchants to erect barriers that degrade the customers’ buying experience.
In fact, false declines, or withholding legitimate orders for fear of fraud, costs retailers more than what they spend on trying to prevent fraud, according to Business Insider.
In a Signifyd survey of 2,000 consumers, 65.5% of respondents said that they would not shop with an online retailer again if that retailer declined an order for no apparent reason. This is a typical false-decline scenario.
Forward-thinking retailers, including many of the digitally native operations, have turned to a relatively new model of fraud management called guaranteed fraud protection. The model combines big data, machine learning and a financial liability shift to transfer the burden of fraud from the merchant to the fraud-protection provider. While the guarantee is a strong positive alone, the machine learning aspect can sift good orders from fraudulent ones in milliseconds. Ultimately, this means more good orders for you and your business.
Remove barriers from the buying process
The fear of fraud is just one barrier being built by online merchants. Other barriers include the requirement to either create an account or log into social media accounts before ordering online. A consumer experience survey by Signifyd showed that 37.6% of consumers found needing to create an account or log in annoying or very annoying.
So how do you reduce this frustration? Well, the best thing you can do is remove barriers to checkout. This means having a guest checkout method where no account is needed. You should also accept as many online payment options as possible.
More than six in ten smartphone users have used their phones to buy online within the last six months. Major retailers have offered dedicated apps for years to improve the mobile experience for their customers.
Now, mid-sized and even small online retailers are developing custom apps to drive sales as well as customer loyalty. One study by mobile app platform Poq showed that conversion rates among dedicated storefront apps are approximately 40% higher than those of mobile sites. Average session duration and average order value were both considerably higher.
As you can see, there’s no one way to grow your ecommerce margins. In fact, employing any one of these techniques can help your business sustain some healthy profits. Whether you improve your website performance, promote your sustainable strategy, or prevent fraud and encourage genuine purchases, you can ensure that your business survives in this competitive and large marketplace.