On January 12th, Nosto’s E-commerce Specialist, Jan Soerensen presented a webinar focused on conquering 2016 by surviving Q1 and setting a plan for the rest of the year. Since Nosto is one of Vaimo's eco-system partners and many Vaimo clients utilise Nosto services, we would like to share with you a recap of the webinar.
Jan strated the webinar by illustrating the revenue drop that inevitably occurs during the first few months of the year with statistics gathered from Nosto’s large client base. He then shared a few tips on how to turn adversity into opportunity.
Problem #1: High Level of Returns Due to Gift Drive Sales of December
Jan suggested combating the first issue of revenue drop by identifying items with a high-return rate before the high season. As a retailer, you can place them lower in the online product catalog, hide them altogether, or perhaps only show them as a cross-sell item. It’s possible to save money by determining troublemaking items and excluding them, or even eliminating those products from your return policy. Keep in mind that returned products will end up costing you, via repackaging expenses, and because returned items may keep you from accepting new inventory.
IRL (in real-life): M&Co saved €415,000 after determining the top 10% of their commonly returned products and removing them from their active promotions.
Problem #2: Excess of Old Stock that is No Longer of Priority to Shoppers
Nosto suggested utilising well-advertised flash sales that encourage buyers to react quickly and create excitement and urgency, instead of having one longer drawn-out sale for the whole month. According to Nosto’s statistics, flash sales can drive a 35% increase in transaction rates. Jan encouraged retailers to consider outsourcing flash sales by going through a third party flash sale company or hosting them within your store. Jan pointed out that the length of the sale is important (3 hours seems best) and effective communication with your buyers beforehand is key.
IRL: Caliroots uses a flash sale banner on their site, thereby attracting all attention to their speciality sale items.
Problem #3: Lower Margins Caused by Discounting Stock
Jan explained that retailers can increase their AOV (average order value) via automated, personalised recommendations which include utilising up-selling, cross-selling and browsing history. Up-selling should ideally convince a buyer to spend more than they originally planned, such as advising a shopper to buy the same model but with higher specs. Cross-selling increases the AOV by suggesting complementary items to the product a shopper is already considering. While cross-selling drives less revenue than up-selling, it's extremely easy to automate. By utilising a customer’s browsing history, retailers can simply remind buyers what products they have previously viewed.
IRL: 54% of merchants that utilise automated product recommendations have increased their AOV year after year.
Problem #4: High Number of Abandoning Shoppers
Jan suggested using pop-ups to combat abandoned shopping carts. He discussed discount pop-ups that entice shoppers to check-out with a reduction in total cost. Nosto has discovered that 32% of shoppers leave because they feel the overall price is too high. Jan also advised using pop-ups for buyers with items in their carts that ask for the shopper’s email, which improves chances that the shopper will return later.
IRL: Greatdays increased their conversion rate by 60% and their AOV by 18% through utilising pop-ups.
Problem #5: Standing Out Above the Noise
As we all probably know, a great deal of companies send out promotional emails on a daily basis. So how can a retailer catch a potential shopper's attention in their email inbox? Nosto recommended using personalised newsletters, as personalised triggered emails have an average click-through rate that is 10 times higher than the industry standard. Jan hinted that retailers should use a customer’s browsing history, what they have previously bought or looked at, and personalised top lists that highlight the trending items which are ordered according to the shopper’s previous purchases.
IRL: Vaimo's client, Björn Borg, keeps their newsletter up-to-date by displaying the current best-selling women’s and men’s products.
Problem #6: Low Customer Retention Caused by Sale Driven Buyers
Again, Nosto suggested using personalised and triggered emails to keep shoppers on your site. For example, “We Miss You” emails can be sent automatically to customers who have not visited your site during a set time period. Additionally, be sure to customise the email with recommendations based on previous buying and browsing behaviour. Jan also recommended sending an order follow-up email as a chance to suggest further purchases based on the items the customer bought. This is also great customer service!
IRL: Yumi Kim tempts customers back to their store with emails containing items they have previously viewed along with similar current top items.
Problem #7: Acquiring New Customers in a Period When Shoppers Aren’t as Active
Jan conveyed that the solution to this issue is just to increase and further personalise advertising efforts. When retailers use retargeting correctly, they are utilising online advertising that is targeted to buyers based on previous online activity. In fact, 54% of shoppers deem personalised ads engaging while 45% of them find the ads more memorable. Different ad types can use best seller products, personal re-engagement, abandoned cart recovery, and post-purchase to re-engage shoppers.
IRL: Nosto preached that automated, dynamic product ads can increase performance up to 400%.
Problem #8: Low Traffic Contributing to Low Revenue
Nosto advised retailers to attract consumers to their store with social competitions, since the average web surfer spends about 1.72 hours per day on social media platforms. Jan encouraged retailers to endorse their brand by boosting social media interactions with your store via photo or video contests. By getting consumers to interact with your store, you are actually getting them to advertise for you and spread the word about your brand.
IRL: Om Nom Nom motivates social media followers to take a photo with their products and share it for a chance to win a T-shirt.
Problem #9: Taking Advantage of This Natural Lull to Build your Brand
Why not start a blog to lure customers to your store and thereby better your site’s SEO? This approach also allows retailers to create stories around their products, brand and industry that will attract and convert traffic. One tip to keep in mind is to keep the content relevant, but not boastful. There are different blog types to consider, such as “behind the scenes,” “company vision,” and “commentary pieces.”
IRL: The CEO of Whole Foods, John Mackey, keeps a personal blog on the store’s site and utilises it to promote causes important to him and the company.
Problem #10: Converting Shoppers into Long-Term Sales
Jan suggested implementing a loyalty reward programme to encourage shoppers to repeat purchase. By granting points for purchases, a retailer can increase a consumer’s annual visits to their site by up to 20%.
IRL: Estée Lauder rewards loyalty programme members with a discount and a chance to gather points, which in turn motivates repeat purchases.