Online Communities: The Secret to E-Commerce Success?
Online shopping surpassed a significant milestone last year when Cyber Monday generated more revenue than Black Friday. While online shopping has taken off in terms of popularity, brands are still facing numerous digital challenges, including poor interfaces, inaccurate inventory and more.
Online Shopping Challenges
Recent research from Forrester revealed that 70 percent of companies are seeing 10 percent or more of online purchases being returned for reasons other than damaged goods (e.g., product didn’t meet expectations). However, this same research also identified a strategy for retailers looking to reduce the number of returns from online purchases: develop an engaging online community, filled with a mix of branded and customer-generated content. By increasing the quantity of customer-generated materials, retailers can enhance buyer confidence which, in turn, will boost online sales and drive brand loyalty.
Online shoppers with high levels of confidence tend to be more satisfied with their orders, yet the Forrester Research found that only 33 percent of companies ranked their customers’ confidence above what they considered the minimum threshold. Furthermore, the data unveiled that businesses aren't able to provide the necessary content buyers need to assuage their confidence.
Cracking the E-Commerce Code
A full 70 percent of respondents believe that buyers who utilize community-generated content have greater satisfaction when using their purchased products than those who didn’t leverage communities. Additionally, 69 percent of respondents also agreed that buyers will depend on access to community-generated content when making a purchase decision.
As evidenced by this data, brands should look for ways to use online communities to improve buyer confidence and grow loyalty. These digital warehouses should offer third-party content at the right time and in the right channel to ensure shoppers have the information they need to make an informed purchase.
Instilling Buyer Confidence
There are three types of content that are critical to improving buyer confidence. This information also tends to be the most difficult for brands to provide, which is likely why it’s so important to consumers when making a purchase decision.
- Live support via phone or web chat: Consumers will sometimes struggle with a purchase, resulting in questions that need to be answered in real time to capitalize on their intent to purchase. Offering live support will enable buyers to resolve any hesitations.
- Buyer ratings and reviews: Shoppers tend to trust their peers, so offering reviews from past customers is a good way to validate products, solutions and services.
- User Q&A threads: Similar to buyer ratings and reviews, customers like to review FAQs and Q&A threads to reduce the likelihood of purchase dissatisfaction and give them confidence in their decisions.
This type of content is best kept in an online community, as this is where customer-generated and branded content meld together. In fact, it’s crucial for customer communities to have unbranded content that's tightly integrated with the brand’s website so shoppers can seamlessly make a purchase if they so choose.
Succeeding With Online Communities
Online communities should be living properties that are updated in real time, all the time. The key to success for this type of asset is encouraging shoppers to continually interact with content on the site. Engagement can come in the form of writing product reviews, asking questions before a purchase, and sharing post-purchase tips and tricks. The more parties contribute to the site, the more information available to help potential customers make the right decision.
Brands can also glean insights from users within the community to identify new market opportunities, such as expansion into new product lines or services, and address negative feedback. The data generated from these communities can also be mined to identify the profile of brand ambassadors — i.e., those shoppers that keep going back to the community to purchase a product or share positive feedback — to improve market segmentation.
More consumers are turning to digital tools (e.g., computers, tablets, phones) to research and buy goods and services, which will only increase the importance of online communities moving forward. Brands will need to begin enhancing their communities by engaging with shoppers throughout their journeys, working with brand ambassadors to encourage contributions to the site and tightly integrating the content with the branded website. This will make for a seamless experience and, as a result, a confident and happy customer.
Steve Hamrick is the vice president of product management, collaboration software for SAP.