Digital retail: 5 tips for success

Comments Comments

Solutionists managing director Frank Gilbert forecasts what’s ahead for digital retail.

With a few exceptions, most of the low hanging fruit of new technology and new customer growth has been harvested. In 2016, it’s going to be more about optimising and improving efficiency and profitability of ecommerce operations.

Targeting offshore markets

Australian retailers will begin targeting off-shore customers to offset encroachment from the big overseas brands. The influx of big overseas brands into Australia has shocked the local players and there is no doubt that it has reduced their ecommerce growth rate. However, there is a huge market outside of Australia provided you have a unique offering at a globally competitive price. Competing in the global market or even a subset of it, will cause ecommerce operators to refine their offers and potentially rediscover the benefits of old fashioned marketing techniques such as positioning and value propositions versus 70% discounts.

Expanded shipping options

Click and Collect will become a required fulfilment option. Since the majority of customers choose this option simply to eliminate the shipping cost, there may well be situations where it’s more cost effective to simply ship free rather than ship a single order to a store, just so the customer can pick it up for nothing. To optimise stock turn and minimise freight costs, you ideally want to ship directly from the closest store. To make this work efficiently, stock count accuracy is paramount so we may see RFIDs start to become a serious consideration.

Focus on CRO

Conversion rate optimisation (CRO) will take over from SEO as the primary site building strategy. Not because SEO is any less important, but there is a declining return on the investment once you have got yourself onto the first page of Google for all your major keywords. Conversion rate can start to payoff big time when traffic growth rates slow down.
A site that was state of the art 18 months ago will no longer be converting at the rate it used to or that the latest sites do. However, it’s important to A/B test your ideas where possible, so it becomes a response to what the customers are telling you, not a guessing game. While everyone knows the stories about changing the colour of the buy button, marketers will be focusing on automated life cycle email systems such as abandoned cart remarketing, refer a friend etc. The impact on conversion rate and sales will be significant.

Using Big Data

Open and click through rates are declining as the novelty of consumers receiving 10 special offers a week wears thin. It will become increasingly necessary to segment email databases so you only send relevant messages to each subscriber. This way, marketers can still deliver all the key messages without drowning customers in emails. Ecommerce websites have the potential to collect a huge amount of data about each customer. This data will be mined to identify preferences and desires which will allow the delivery of a smaller number of highly targeted communications.

B2B ecommerce

More and more distributors are seeing the cost and convenience benefits of offering B2C style ecommerce to their business customers. While the ordering interface and pricing model might be different, the product catalogue, category, search and filtering tools of a modern ecommerce platform are so familiar that business customers want this ease of use too. From a purchaser’s point of view, knowing that your order is being loaded directly into the suppliers manufacturing or warehouse system and that stock availability is real-time and accurate, gives confidence as well as saving time and reducing errors. B2B ecommerce will bring the benefits of enterprise level EDI ordering to all suppliers and their retailer clients.

comments powered by Disqus