Five pitfalls you should avoid while building your customer-first strategy for ecommerce

Shopping online is now a regular habit for many people. Much has been said about the rise of ecommerce and how retailers are focusing their efforts on infrastructure, expanding the assortment coverage and delivery capacity, or about how valuable an omnichannel customer is. But not so much has been said about the importance of having critical mindset for the omni-channel customer. Instead of simply replicating what is in place for physical stores, it’s important to have a Customer First strategy across  all the channels, and to consider their difference as and particularities.

So how can you put the customer at the centre of your ecommerce strategy?

Here are five pitfalls to avoid.

1. Segmenting your customers the same way you do offline

It’s important to have deeper understanding of your customers’ needs, preferences, habits and intentions. Equipped with such detail will allow you to create better communications and offerings across the whole digital landscape.

Keep your mind open to considering new segments. Besides understanding the behaviour through engagement, price sensitivity, and demographics, it’s also important to understand how your customer is navigating through your website. Which are their shopping missions? Which type of products are they looking for? Depending on the market and product segment, for example, customers interested in launches and new products are more valuable and tend to have higher profitability than other segments. With one of our non-food retail clients, customers who predominately focus their spend on new products can equal up to 15% of the customer base and 25% of overall sales. Try to discover your hidden gems.

2. Don’t using a single view of your customer

Overlooking the omnichannel behaviour of your customer can lead to many mistakes that they might not forgive. We’ve found in multiple clients that multichannel shoppers are three times more valuable than the average shoppers. There are added costs with increasing digital customer and you must consider their overall profitability, larger share of wallet, and driving a larger amount of quantum profit when assessing their importance. You need to have an individualised, but holistic view to better identify your most valuable buyers. Thanks to detailed information about your site visitors’ habits, their clicking behaviour, purchasing history across channels and lifestyle preferences, you can clearly see when, where and why they engage. This allows you to communicate with them at relevant points in the buying process and improve your conversion rate.

3. Using the same business category hierarchy in site navigation

Product categorisation or hierarchy is the basis for how shoppers navigate and discover products. For customer experience, hierarchy is the intricate layout of intuitive, searchable navigation. If your online category flow is unclear, business-oriented (instead of customer-oriented), difficult to interpret or poorly arranged, shoppers will have a harder and more frustrating experience.

Users may have a difficult time if you don’t consider online behaviour, with cumbersome navigation options and an often overwhelming categorisation structure that are either overly narrow or too large. This will result inevitably, in less conversion and fewer sales. Developing a shopper-friendly navigation, arranging the taxonomy through the consideration of customer clickstream data and need states, can drive 5% increase in number of shoppers. Additionally, customer centric taxonomy also encourages shoppers to spend more, with uplifts reaching 7%, based on client results in grocery retail.

4. Ignoring the power of reviews

Online reviews are an effective word-of-mouth marketing strategy that provide outside perspectives on products and services. If an ecommerce store doesn’t have product reviews or doesn’t manage them, customers will go elsewhere to find them. And if they go elsewhere for reviews, the brand loses control.

Nearly all (99%) of today’s consumers read reviews, and nearly as many (98%) consider them essential. And indeed, reviews are driving shoppers to purchase. Analysis found that when a shopper interacts with ratings and reviews on a product page, it lifts their conversion rate by 120%.

And indeed, reviews are driving shoppers to purchase. When a shopper interacts with ratings and reviews on a product page, it lifts their conversion rate by 120%. Want to build a winner process to manage customer reviews? Ask for them, make the process easy and frictionless, reward your customers and keep them engaged.

5. Using low personalisation in promotions

Your competitor is no longer a store one mile away, it is one click away. In a world where customers can price compare at the click of a tab, maintaining price perception is vital. As many as 44% of shoppers shy away from brands that don’t offer them personalised, relevant offers. Use relevancy algorithms to curate your promotions list at the customer level using their previous behaviour and show each customer the offers that actually matter to them. Successfully implemented, uplifts of 2% as well as greater long term loyalty have consistently been realised. The importance of being competitive is unquestionable, but it will be a race to the bottom unless you effectively target customer and personalise to their needs. This is essential to ensure that any offers provided are helpful and relevant.

At dunnhumby, we’ve been advising grocery retailers on digital best practices for over 10 years, led by over 30 years of leading experience in data science and we have developed a range of products for retailers to deliver exactly these kinds of industry-leading customer experience online, powered by retail data.

References

• catsy.com/blog/product-categorization
  
• baymard.com/blog/2021-grocery-ecommerce-benchmark#grocery-performance-overview
  
• piwik.pro/blog/what-is-single-customer-view-and-how-does-it-work
  
• bossdata.be/resources/implementing-an-omnichannel-mindset-in-7-steps
  
• dunnhumby.com/resources/blog/covid-19/en/you-won-new-online-customers-during-covid19-how-will-you-keep-them
  
• bigcommerce.com/blog/online-reviews/#online-reviews-are-essential-for-your-online-store#
  
• powerreviews.com/blog/review-volume-conversion-impact