3 Things You Need to Know about Growing Online Retail Sales
The five marketing channels we covered in one of our previous posts, represent the main funnels among which you allocate your marketing budget. However, finding ways to continually drive e-commerce revenue is still a constant challenge. In order to decide on the best marketing budget allocation, it is important to understand the three fundamental ways in which online retail sales can be boosted.
1. Find new buyers
Paid media, social media, affiliate marketing, and search are all designed to increase your customer base. Social media, paid media and, to some extent, affiliate marketing accomplish it primarily through brand awareness and demand stimulation. Search does it by capturing customers right at the bottom of the sales funnel.
Retailers are often willing to pay extra to acquire new customers (for example, most retailers pay affiliate marketers a higher commission rate for new customers). They do so, foregoing the immediate ROI with the expectation that the initial investment will be recouped over the lifetime customer value. However, if you choose to do so, you need to make sure your email marketing channel is designed to maximize the customer lifetime value to justify the extra investment up front.
2. Boost conversion and upsell
As any good waiter will tell you, the best way to increase a diner’s bill is with alcohol and desserts. While these items typically don’t exceed the cost of an entree, they do well to drive a significant portion of the bill.
For those in e-commerce, upselling has a similar effect. In 2012, Amazon reported a 29 percent increase in sales that was directly attributed to their recommender system. A good recommender system can not only tie related products to those a customer has purchased—and hence upsell—but find items that are similar to the ones the customer has browsed. If a customer has not yet made a purchase and is still in the decision making process, suggesting items similar to the one a customer has browsed can help increase conversion rate.
These suggestions can be delivered via different channels: on-site, email, or retargeting ads. However, in spite of the greatness of this technology, there is not much you can do unless the user is active on your site looking for an item. So, how can you get more of your customers to be actively shopping on the site? Re-engagement.
3. Increase engagement: Transform dormant users into active ones
Everyone loves a repeat customer. It’s a sign of a thriving business. Repeat customers also become evangelists for your brand and, of course, drive sales. For these reasons, re-engaging inactive customers is a must.
Marketing to inactive users is a cost effective way to drive sales. Although 50-80 percent of your customer database may be inactive, they’re already customers who have shopped on your site, and email provides a direct personal way to reach out to them. Email is the easiest and cheapest way to reactivate such customers and increase their lifetime value. But often poor execution makes email campaigns ineffective. Think about the number of times you've ignored flyers with screaming discounts handed out in the streets, but were compelled to stop in front of a shopping window that called your attention?
When it comes to email marketing, it is important to avoid the trap of static brochures and learn from the store windows example. Be smart with email by showcasing the freshest and most relevant merchandise to entice your customers to come back. This is what Jetlore’s “PageRank” for products is designed for. Working and learning from top-tier e-commerce brands, Jetlore’s email merchandising algorithm has increased the number of customers who re-engage with an online retailer, driving repeated sales.
[Note: Keep in mind that merchandising email newsletters is fundamentally different from Amazon-style on-site recommendations—we’ll cover this in detail in one of the future posts.]