The key to maximizing online holiday returns this year is — not surprisingly — to leverage the social and mobile channels to present a unified channel experience, and more importantly, cater to the “omni-channel consumer,” who is pressed for time and expects access to desired information on her terms, according to IBM Coremetrics in its recently released Fourth Annual Online Retail Holiday Readiness Report, an analysis of key trends in online shopping and usage based on data from more than 500 U.S. retailers.
With the holiday shopping season approaching, retailers are challenged to map out a blueprint for effective customer-facing strategies to win at every touch point. Focused on providing best-practice insight, the report uncovers the trends driving a customer-centric approach to e-Commerce for the most critical shopping period of the year.
E-Commerce retailers are more optimistic about the 2011 holiday season, following a successful 2010, which resulted in double-digit increases in total site sales and average order value, as consumers shook off the effects of the recession. Those increases have continued into 2011, indicating potential for record-setting online retail sales for the holiday season. Further validating this forecast, 21% of online shoppers expect to spend more over the web in 2011, according to the report.
“Consumers are super savvy and they know that if you don’t have what they want, when they want it, at a price they’re willing to pay, odds are they can get it somewhere else,” noted John Squire, Chief Strategy Officer, IBM Coremetrics. Squire told Retail TouchPoints that this heightened consumer demand manifests itself in higher bounce rates — the percentage of people who arrive at a site and leave immediately (presumably because they don’t find what they’re looking for). This, Squire said, means that retailers must subscribe to a “tailored approach” to reaching their audience to decrease the risk of shoppers bouncing away to competitors.
Consumer Spending On The Rise
Shedding a much more positive light on holiday spending, the report noted that average order value (AOV) surged to a record $204.58 in April 2011, up 70% from a low of $120 in June 2008. Given this spending shift, retailers have a golden opportunity to capitalize on consumers’ newfound willingness to spend, the report said.
To capitalize on the economic rebound, Squire asserted that retailers must enhance every aspect of the e-Commerce experience. “Retailers also need to take a look at targeted display ads to keep their brands, products, and special offers top of mind among consumers who visited a site but didn’t buy anything,” he noted.
The report noted that retargeting browsers and abandoners with personalized emails and targeted display ads is a proven way to prompt return visits and conversions among would-be buyers. Also, product recommendation technology can contribute an additional10% or more to total sales, Coremetrics Benchmark data has shown, boosting both AOV and items per order. To exploit this, retailers must leverage social and mobile channels in order to be omnipresent.
Strong mobile device support also is essential to satisfying the fast-growing population of mobile browsers and shoppers, while social media offers an emerging channel to deepen consumer engagement and trigger site visits, according to the report.
“Consumers don’t distinguish between a mobile site versus a web site versus an in-store experience when they’re evaluating their experience with a particular brand,” Squire said. “So the most important thing for retailers to remember is that a consistent brand experience is critical. Do not treat mobile as a nice-to-have. If your web site gives consumers a rich, immersive experience, then you need to make sure your mobile experience is just as compelling. Most people keep their phones either on their bodies or within a few feet at all times. Use that proximity to your advantage to drive sales and build brand loyalty by treating mobile as a key element of your marketing programs.”
Social Reigns Supreme
Social media has been growing rapidly for the last few years, and now more retailers are moving toward monetizing the channel as a forum for customer ratings/reviews and peer feedback. Social visitors are more than twice as likely compared to the overall population to convert, at a rate of 10.7% versus 5.2%, according to the report. Many of these social visitors are likely responding to offers, as their bounce rate (62.8%) is high and their time on site (3:26 minutes) is low.
“Social media is about authentic conversations,” Squire said. “That means you’ve got to be willing to take the good and the bad, and that you have to have a strategy for dealing with the hard questions people will ask. Ratings and reviews are the classic example of this point in action. Don’t even attempt a ratings and reviews program unless you’re willing to deal with some hard truths and to engage in a very public conversation with your consumers. But also recognize that there’s money to be made in those truths.”
Squire pointed to a case study example of a large pet supply retailer, which found that ratings and reviews significantly reduced the percentage of returned items that required assembly. “The reviews painted thorough pictures of what it was like to assemble the product, which in turned enabled people to decide whether they wanted to invest that kind of time,” he noted. “The net-net for the retailer was happier consumers and lower return costs.”
The report offered five areas of strategic focus for retailers to apply these best practice principles, further profiled in the report:
- Focus on the customer lifecycle
- Capitalize on the mobile channel
- Retarget your browsers and abandoners
- Use personalized product recommendations
- Cultivate the social media channel
A complimentary copy of the IBM Coremetrics 4th Annual Online Retail Holiday Readiness Report is available for download here.