Adapt to Survive: 3 Ways Retailers Need to Reset for E-Commerce
2018 was a year of discontent for the retail industry, which saw several formerly formidable brands, including Toys"R"Us, succumb to external pressures — not least the increased migration of consumers online. Seventy-nine percent of Americans now shop online, and 30 percent do so at least once a week, according to 2018 data from Pitney Bowes.
This trend is only going to accelerate, and this means that multichannel retailers must put relentless focus on optimizing their e-commerce stores to maximize online sales. Here are three ways that retail businesses need to reset to improve online performance:
1. Evaluate marketing priorities.
The retail category is now the world’s fourth largest advertising spender, according to AdAge’s latest analysis of global advertisers. And in the U.S. alone, the retail industry represents nearly 22 percent of all digital ad spending ($23.50 billion).
Yet all too often, retailers are spending millions on attention-grabbing advertising campaigns, only to drive consumers to a website that disappoints — whether through poor mobile optimization, patchy on-site search functionality, confusing navigation or lackluster product content. This represents a huge lost revenue opportunity for those retailers.
To address this critical issue, brands need to re-evaluate their marketing budget priorities, which in many cases have yet to catch up with the realities of e-commerce. Yes, advertising is obviously important for brand awareness, but having a subpar online store will simply lead to diminished return on investment on all spend further up the funnel if users ultimately fail to make a purchase.
2. Deliver an exceptional online customer experience.
Closely related to the point above is the need to improve the online experience for customers. Though shopping online brings a host of benefits in terms of convenience, it’s also more challenging in some ways — e.g., the often vast range of similar products to choose from, and the absence of human sales assistants to aid customers in their purchase decisions.
To deliver an experience that’s commensurate with what consumers could expect in-store, retailers need to provide all the information that their customers could possibly need. This spans a whole range of different content types, from FAQs and delivery/returns policies to buying and how-to guides, to comprehensive product descriptions.
Product descriptions, in particular, are often shockingly neglected, even though they’re an absolutely crucial driver of conversions. Despite the fact that we’re now, as an industry, over a decade into e-commerce maturity, it’s still not uncommon to see product descriptions with formatting issues, missing fields, or incomplete/cursory information simply copied from manufacturers’ product details.
A 2016 survey by Quill found that 90 percent of consumers are more likely to buy a product if the description contains specific, valuable details. This sounds obvious, but seems to rarely to be the case. A further 71 percent of consumers also prefer description copy that explains the benefits of the product and its features. These are no-brainer improvements that are easy to implement and, in our experience, can generate significant conversion rate uplifts.
3. Reduce product return rates.
One of the biggest existential threats to online retail is the margin drain associated with high levels of product returns, which are projected to cost U.S. retailers $550 billion by 2020.
Unfortunately, returning items bought online is now habitual behavior for some consumers. Sixty-three percent of shoppers now check the retailer's returns policy before making a purchase, often with the active intention of buying multiple colors, sizes or specifications and then returning surplus items.
Some retailers — notably ASOS and Amazon.com — are addressing this issue by introducing more punitive blocking policies for serial returners. Though this is likely to be a successful deterrent for the worst offenders, a more effective long-term solution is to invest in technology and content that makes it easier for customers to choose the right item for their needs, the first time.
For fashion retailers specifically, this might include interactive "fit finder" apps that invite users to input information about their measurements or body shape, and then utilize this data to provide sizing recommendations (see here for some great examples).
From a content point of view, for retailers across all categories, buying guides — i.e., editorial pieces that offer helpful advice, inspiration and targeted product recommendations — are another effective way of steering customers towards a satisfied purchase, reducing the likelihood of returns.
As we’re witnessing on a now routine basis, unless retailers address these e-commerce challenges head-on, they make themselves vulnerable to disruption and, ultimately, displacement by better prepared competitors. Optimizing online performance is the best thing retailers can do to guarantee their survival in an increasingly e-commerce-dominated future.
Ed Bussey is CEO and founder of Quill, the leading online content production platform for e-commerce businesses.
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