Customer Relationships, Not Transactions, Key to Long-Term E-Commerce Success
Before making a purchase decision, 81 percent of shoppers conduct research online. Likewise, as consumers turn to multiple digital sources for product information and recommendations (61 percent read product reviews, 60 percent start their research on a search engine, etc.), it's incredibly difficult for retailers to stay top of mind with shoppers through the very end of their buying journeys
In the rush to earn shoppers’ business in the highly competitive e-commerce environment, it can be easy for retailers to get tunnel vision toward final purchase. Transactional commerce is a long-standing e-commerce model, and companies have used it for decades to drive immediate purchases primarily through SEO-driven search techniques (both organic and paid search marketing). Unfortunately, this strategy eliminates any opportunity to influence consumers at the top of the funnel, which is a critical moment in the buyer journey.
However, this isn't a long-term solution for companies hoping to sustain e-commerce success well into the future. The approach is too passive and dependent upon shoppers’ purchasing whims, and makes it difficult to remain competitive with leading online retailers.
How Relationship Commerce Can Improve Long-Term E-Commerce Performance
As its name suggests, relationship commerce creates valuable interactions and deep relationships with shoppers over time, starting at the top of the funnel. Rather than focusing purely on the singular moment of transaction, relationship commerce strategies foster long-term loyalty by providing personalized, algorithmically orchestrated digital experiences at every step of the customer journey.
It costs five times as much to attract a new customer than to keep an existing one, so forging long-term relationships with customers is critical to any e-commerce retailer’s bottom line and future company health. With increased e-commerce competition, retailers need differentiated experiences filled with sticky retention mechanisms to engage customers in valuable ways over time.
Relationship commerce makes it easier for retailers to ensure lasting customer loyalty starting at the top of the funnel. Rather than positioning search solely as a transactional driver, relationship commerce leverages search to first acquire visitors and then build long-term relationships with them, even when they're not expressing specific purchasing intent.
The Pillars of a Successful Relationship Commerce Strategy
To build these kinds of relationships with shoppers, retailers need to prioritize an ongoing dialogue with consumers, rather than driving one-time transactions. A quality relationship commerce strategy should include the following:
1. Eliminate guest checkout. Guest or anonymous checkout may eliminate momentary friction, but it doesn't encourage shoppers to create long-term user accounts. When retailers use guest checkouts, one-time transactions are too common. Companies miss out on opportunities to drive repeat purchases with guest checkout.
While some first-time buyers may be turned off by this unexpected step of creating an account before purchase, the approach pays off in the long run by earning the information necessary to extend communications and engagement, therefore driving repeat purchases. Small asks like prompting shoppers to enter an email address or sign up for a monthly newsletter provide retailers with valuable information that allow them to jump-start an ongoing personalized dialogue with the customer.
2. Keep shoppers logged in and active. A successful relationship commerce strategy also depends on keeping shoppers logged in. There are two main benefits of this. First, keeping shoppers logged in with something like a "Remember Me" button streamlines the online order process. Customers don't have to remember their passwords and usernames before making a repeat purchase.
Second, retailers can use logged-in traffic to further curate a personalized online shopping experience. For example, when a shopper returns to a retailer's site and is already logged in, that retailer knows his or her size, styles or products viewed in past visits.
3. Involve shoppers in the dialogue. To learn even more about shoppers’ desires and create the most targeted content, retailers should encourage customers to invest in their own online profiles. For example, companies like Wayfair and Etsy allow users to curate lists of their favorite items or follow preferred users and shops online.
Digital relationships cannot be one sided, but rather an ever-evolving dialogue between retailers and shoppers. When users contribute information to their own accounts, retailers can create individualized content experiences guided by users’ own interests and desires. With individualized content, as well as the social nature of connecting with others via a retailer's website, brands give shoppers more reasons to return and make repeat purchases.
With an e-commerce strategy centered on relationship building rather than transactions, retailers can engage elusive upper-funnel shoppers and transform them into lifetime customers. As e-commerce popularizes and grows even more competitive, acquisition costs for new shoppers will continue to grow, making these kinds of customers even more critical to retailers’ bottom lines.
Eldar Sadikov is the co-founder and CEO of Jetlore, a company that provides marketers personalized content orchestration.