Is the writing on the wall for eCommerce? Customers have relied on online retail for 18 months, with repeated lockdowns contributing to an extraordinary spike in growth – online now contributes 36% of retail revenue compared to just 16% pre-pandemic[i]. Yet, while some of this new buying behaviour is likely to stick, online is no longer an emergency destination and retailers have failed to take note.
People are missing the quality of shopping experience. Buying online is mechanical process at best, excruciatingly frustrating at worst. With growing confidence to return to the high street, the decline in online retail is inevitable. The big question is just how steep that decline will be.
As the peak season excitement of Black Friday and Christmas approaches, retailers have one last chance to take a serious look at the online experience and deliver the level of personalisation customers expect. As Russell Loarridge, Director, ReachFive, explains, it’s now or never to capture and retain this new customer base.
Now or Never
Over the past 18 months, online retailers have worked hard to scale up to meet customer demand. Websites are more robust and can handle increasing customer numbers without delays. Logistics processes have been overhauled. From diverse delivery options to an improvement in picking accuracy, fulfilment is more efficient.
But the essential buying experience remains the same – inadequate, perfunctory, exasperating. Why are individuals still compelled to wade through piles of irrelevant items in an increasingly desperate bid to find the required product… only to discover it is out of stock? A jumble sale would be more fun – and more productive. Is it any wonder basket abandonment and product returns continue to spiral?
Online is no longer an emergency destination – and consumers expect something better. A lot better. Yet retailers have simply accepted the new customer base and assumed it’s here to stay. There has been no attempt to truly discover who these customers are – over and above uninformative email address and telephone number. From gender and size to preferences and hobbies, a good retail experience has always been predicated on providing a product that meets a customer’s needs. Yet, the vast majority of online retailers still have no real understanding of the individual preferences of each customer.
The pandemic-induced sales growth is masking the reality: online retail isn’t working. It’s not working for customers who are missing the quality of a personal interaction in store. Moreover, it isn’t working for retailers facing an ever escalating cost of sale. From the logistics disruption due to both inbound shipping delays and a critical lack of HGV drivers, as well as an escalating cost of sale with labour, fuel and marketing costs on the rise, already small margins are under pressure.
Something has to change – and fast. How can retailers create a loyal customer base that is also profitable – one that doesn’t eradicate profits by using now expected free returns to order multiple products and return at least half? How can retailers create the positive brand loyalty and environment that actively encourages customers to come and browse – both online and in store? What is the best way to move from the chaos of the online jumble sale to a virtual store that can use customer knowledge to take customers straight to the products they love?
It’s all about creating a personal connection. Asking the customer their gender and age bracket, for example, immediately allows the retailer to present a far more relevant subset of the overall product mix. Request an ideal colour palette or preference for fell running over treadmills, and the retailer begins to create a valuable profile that can be used to nudge customers towards the most suitable items. Add in a ‘only show available stock’ button and time pressed customers will avoid the frustration of clicking on items only to discover at check out they are no longer available – or not available within the timeframe they want them by.
Make it Personal
Customer information can transform the quality of the shopping experience. This is not, however, about using super intuitive AI tools which may, at best, conclude a customer has a 98% chance of being female and a 12% chance of being a prima ballerina. Why not just ask the question? People aren’t ordering multiple items because they are desperate for a trip to the Post Office or courier collection point; with inconsistent sizing and inadequate online descriptions they have no choice.
Why not use this behaviour as a trigger to engage and interact? If a customer puts multiple sizes of the same product in a basket, a pop up can suggest they provide measurements to help the retailer recommend the best fit. This information can then be captured and used to enhance the customer experience every time, with a personal identity that becomes deeper with each visit.
It sounds simple but encouraging customers to provide their accurate measurements provides a huge step forward in the quality of the online experience and, critically, in reducing returns. Some online-only retailers are offering innovative virtual measuring services, while those with online and physical presence can make it an event. Inviting customers to a pop-up shop opening where they can have a free cup of coffee, a chance to preview a new collection and a chance to be measured at the same time, is a great way of building engagement and improving personalisation – and ensures the customer knows what size to pick next time.
So Many Opportunities
Personalisation could and should be built into every stage of the online experience. Why, for example, are retailers not using returns information to improve their individual customer understanding? While some companies capture that data at a generic level to provide insight into issues with product quality and sizing, linking it to each individual customer is also hugely valuable.
Adding it to a customer’s profile will help individuals with their next buying decision. They can check their buying history, including sizes, what they kept and what was returned, which will help them choose the correct size first time, improve the experience and minimise the need to buy – and return – multiple sizes. Or why not present a simple pop up reminding the customer which sizes he or she tends to keep, to provide a quick nudge in the right direction?
A customer searching for children’s football boots at the end of summer is probably getting ready for the new school term. Why not make the process quick and simple with a pop up saying – looks like you’re buying back to school gear, here are the items in that size we have in stock now and can get to you before term starts. Creating a personal connection isn’t complex – it just requires the right mindset.
The speed with which online sales increased when the pandemic hit shows retailers just how quickly customer behaviour can change. And, right now, what is the reason for customers to keep buying online while the quality of experience remains as perfunctory and impersonal as ever?
Having invested heavily in online operational processes, retailers now face a rapid decline in demand at a time of eradicating margins. Nurturing a loyal customer base should be a priority. With peak season rapidly approaching, retailers are in the last chance saloon – action is required now.
[i] Source: Brendan Wichter, VP Principal Analyst, Forrester