Article

Five e-commerce revenue leaks you need to plug

The holy grail of 1-to-1 personalization presents a challenge that 55 percent of online retailers haven't even begun to address, although several key elements are easy to implement today.

January 26, 2015

By Ohad Flinker, Senior Editor at Dynamic Yield

The proof is in the pudding. In a poll from Infosys, 86 percent of consumers stated that personalization influences their decision to purchase. Similarly, 83 percent of consumers prefer a personalized cross-channel brand experience, while more than half of executives surveyed believe personalization will result in increased web traffic, higher conversions and increased revenue per order.

Online retail giants like Amazon, Netflix, and Staples have already assimilated this, and that’s part of the reason they are so successful. They all invest heavily in a personalized shopping experience. Amazon prides itself on shortening the path between you and the thing that you want, Staples has just deployed an entire personalization platform into their arsenal, and Netflix has transformed media production as we know it. Personalization is no longer a nice component to have — it's an absolute necessity for driving e-commerce success.

The holy grail of 1-to-1 personalization presents a challenge that 55 percent of online retailers haven’t even begun to address, although several key elements are easy to implement today. If you’ve just started your own personalization journey, a quick analysis of your analytics dashboard is likely to confirm these five missed revenue opportunities:

Target customers by number of visits

The chances of a visitor-to-customer conversion increase dramatically with every returning visit. Returning visitors are more likely to buy and click through offers, whereas most first-time visitors will never return. Personalized content is the best way to reach more visitors who would otherwise stay anonymous. A top priority when engaging the first timer crowd is to capture their email addresses so you can follow up with a relevant offer. Returning visitors are significantly more responsive to time-sensitive discounts, which have been proven to increase conversions. To capture those hesitant first-time visitors who aren’t ready to convert, devote significantly more screen real estate to a registration or sign-up call to action. Deeper down the funnel, your offers will become far more compelling once that initial relationship has been established.

Optimize for mobile and omni-channel experience

While mobile traffic is gradually gaining on desktop, conversions still lag behind. In a post-PC world, online retailers are feverishly optimizing mobile conversions in an effort to go beyond responsive design into a “mobile first” paradigm. Whether you set out to boost engagement or revenue, targeting your customers when and where they feel comfortable is crucial to sales uplift. As consumers embrace mobile — analysis, testing, and optimization initiatives must take second and even third screens into account. The goal is to achieve a seamless omni-channel experience, maintaining the same personalized experience across every device type.

Focus on shopping cart elements

The online shopping cart is the one of the biggest points of failure identified by most online retailers — and therefore the best opportunity for improvement. Increasing conversions is an obvious priority, but no e-commerce business can ignore other key performance indicators such as average order value and customer lifetime. Many retailers believe they must incentivize customers with discounts to ensure they check out successfully. Consumers don’t always agree. Studies show that flexible shipping and packaging options such as free shipping or even gift-wrapping could play an important role. Moreover, following thousands of variations generated by Dynamic Yield customers, we saw that even subtle changes to the shopping cart, such as enlarging a security icon on the payment page, or changing the size or color of CTA buttons, can lead to increased consumer trust and conversion uplift.

Look at the time!

Shopping volume varies based on time of day and the season. While an in-store experience is limited by standard business hours, the online consumer is driven by convenience. According to Adobe, Forrester, and even Google e-commerce reports, more retailers are finding ways to stretch popular shopping periods, encouraging browsers to hit the buy button anywhere and anytime while measuring results. Many websites have seen conversion rates skyrocket well after 10 PM, offering the perfect opportunity to test anything from upsell offers to increasing the average order value. Some have even created late-night edition content, specifically targeting after-hours shopping traffic.

Know your buyer

Some customers may be looking for a particular product, while others may be open to related offers (e.g. accessories, gift packages, or other popular products), but whatever their reason for visiting your site, it is crucial to take the time to understand what motivates your buyer. The more specialized your category, the easier it is to tap into your customer’s mindset. I might be looking for that perfect gift for my spouse, but if I’m also a parent — the hottest new toy might be just what I need to check off and complete my shopping list. To generate new insights, online retailers are tracking user flow across the site, including top product pages visited, browsing and buying history, and then following up with personalized offers that generate proven results.

Online retailers have unprecedented access to the critical data that can help them target buyers more effectively. The challenge remains to translate that data into actionable insights that get results. Data (Big or of any other size) in and of itself has no value unless you make it work for your business. Big Data offers tremendous opportunities in the right hands and when manipulated by the right technologies. Personalization data can become that competitive edge.

But don’t let the data fool you: Focus only on the information that will help you increase conversions and sales. One of the most efficient ways to deliver on the promise of personalization is to design a data-driven customer experience that transforms the buyer journey.

No matter where you are on your personalization journey, you can take the first few steps today with the data you have and expand on it as you see your efforts pay off.

(Photo by Jenny Romney.)