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Customer Retention. Automated

eCommerce: Pillar of Growth for Retail

Posted by Polly Flinch on Feb 23, 2016 9:55:58 AM
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2015 eCommerce Sales Growth versus Total Retail SalesLast week the US Department of Commerce released new data on how retail fared in the 4th quarter of 2015. When looking at total retail sales, eCommerce saw the most growth not only in Q415, but throughout the year. eCommerce sales in Q4 accounted for 7.5% of the total Q4 sales, growing 14.7% when compared to Q414, while total retail sales increase 1.3% during the same time period. While eCommerce only grew a total of 2.1% Q3 to Q4, total retail sales for the fourth quarter were virtually unchanged with total sales around $1,184.8 billion.

For 2015, total eCommerce sales were estimated around $314.7 billion, an increase in 14.6% from 2014, while total retail sales in 2015 increased 1.4% from 2014, meaning eCommerce sales accounted for 7.3% of total sales in 2015 as compared to 6.4% of total sales in 2014. As eCommerce continues to grow at a much faster rate than traditional retail, we can expect to see an even larger shift to online from large brick and mortar retailers.

Let’s take a look at a few more metrics from Q4 2015.

Move Over Desktops

eCommerce continues to play a major role in the continued success and growth of the retail industry.  As more stores come online and as consumer technology keeps advancing, the pull to buy from the convenience of one’s home becomes greater. A recent benchmark report by Experian, states that mobile has grown significantly when comparing Q4 2015 to 2014, with a 16.6% increase in emails being opened on mobile and a 34.4% increase in emails being clicked through from mobile. Let’s break that down a little further. This report states that Consumer Products and Services saw an 8.1% increase in opens and a 7.7% increase in clicks via mobile, and multi-channel retailers saw a 7.0% increase in opens and a 30.0% increase in clicks from mobile in Q415 alone.

This change in how consumers are interacting with email on mobile, indicates that the customer point of view is shifting from one of “I can check email on my phone, but need to sit down on my laptop or at my desktop to make a purchase” to “I can check email and buy goods directly from my phone, easily and quickly.” Whether this is the expectation or the reality, is still a little unclear; however, the importance of making sure your eCommerce email marketing and your website are ready for mobile is key to being able to serve your customers regardless of what device they use to do their shopping.


Being Relevant Will Save You

According to this same study by Experian, eCommerce email volume for consumer products and services and multi-channel retailers increased 23.5% and 26.1%, respectively. Amazingly, unsubscribe rates for both groups decreased 25-30% when compared to Q4 2014. This could point to higher rates of eCommerce email marketing personalization; however, there’s also a chance a lot of emails were being buried in the inbox due to little to no change (or in some cases decreases) in opens and clicks. Regardless of why, retailers can take this information and use it to help inform their eCommerce email marketing strategy.

For starters, segment your promotions. Make sure your customers are getting offers and deals that are relevant to them. This will dramatically decrease unsubscribes as well as help ensure customer engagement with your emails. Last year I bought a house and did some furniture shopping at a well known retailer that has both a brick and mortar and an eCommerce presence. Since shopping with them, my inbox has been inundated with hundred of emails from this company. I receive 1-2 emails every day for everything from grills to prints and kitchen accessories. Now, the important information here is that I bought a lamp and two end tables in a particular style and, even with all of their emails flooding my inbox, I haven’t bought a single thing since. Why? Because they haven’t shown me anything that I’m interested in, and, on a subconscious level, they’ve annoyed me. Yes, I’ll tolerate their emails because there might be a good sale on some throw pillows for the couch, but if I’m looking for new pieces of furniture, they’re probably not the first place that I’m going to look. In fact, they’ve been relegated to my “Promotions” tab which gets a glance maybe once a month, twice if I feel like splurging.

The above experience could easily be fixed by simply segmenting customers based on products and categories they’ve made purchases in, pages they’ve browsed, or data-driven, predicted product recommendations. Maybe in some database, there’s a line item that says the stand alone grill is a frequently bought item by people who also purchase my lamp and end tables, but I highly doubt it.  Segmenting their promotional emails would also have ensured that the retailer had not been exiled to my promotions tab, meaning I would be engaging with their brand more regularly.

For retailers with a strong online presence, you are in a great position to continue to excel as eCommerce continues to grow and evolve. The good news for retailers who may be farther behind in building an incredible online brand, you’re not too late. If you take the time to invest in your eCommerce store, a strong, data-driven email marketing program, and some key acquisition and retention techniques, such as lightboxes and onsite tracking, you’ll be in a position to grow with the times.

Topics: Customer Retention, Best Practices

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