Converted Carts: What Retailers Need to Get Right for Customer Acquisition

Bankruptcies and store closures are hitting once iconic brands like Gymboree, RadioShack and Payless, while ecommerce operators like Amazon continue to relentlessly bolster their power.

While it seems like an unfair fight, it’s certainly not the end of an era as it may seem. Indeed the challenges of today’s commerce landscape are significant, but the current digital era also creates tremendous opportunities. This is especially true when evaluating today’s evolving approaches to customer acquisition.

Companies like Walmart, Home Depot and REI are already leading the way. They have created omnichannel platforms, improved in-store experiences and have leveraged online platforms like YouTube, Facebook and Twitter to meet shoppers at every interaction point.

There are other positive trends in the retail industry. According to a report from the National Retail Federation, there was a net increase in store openings in 2017 of more than 4,000 locations. Further, during the latest holiday season, retailers benefited from a 4.9% increase in sales, which was the best performance since 2011.

Yet the retail transformation extends far beyond 5th Avenue. Industry experts also point to the revitalization of Main Street. If anything, small and mid-size retailers have many advantages to succeed. They are nimble and creative and eager to adapt to changes, such as providing unique experiences to shoppers. They are also unafraid to take bold moves, turning themselves into laboratories for innovation.

But even with the most progressive of thinking, the key will be finding ways to improve customer acquisition to fuel revenues and profits. The good news is that – with the ubiquity of affordable new technologies – there are tremendous opportunities for scale.

Embrace Data Collaboration: Data is the coin of the realm when it comes to customer acquisition. Retailers must know their prospects in order to make a relevant, compelling product recommendation. But unfortunately, individual retailers do not have enough scale to build an effective personalization platform. One proven workaround is to form data collaboration alliances, which allow for better reach and ROI. The most successful collaborations do require in-depth planning. Who are the best partners? Is the data fresh and relevant for purchase intent? There must also be a focus on compliance to avoid data breaches, which can expose a company to enormous legal consequences. Finally, there must be a strong omnichannel marketing strategy in place to ensure the data is used effectively across all customer touch points.

Audit Current Shoppers: The strongest applications of customer data result in acquisition strategies that are in a constant state of change and improvement. Seemingly inconsequential details – such as the color of a “Quick View” button – can have a significant impact on a shopper’s experience. This means retailers will have to experiment and experience some new obstacles, which can be unnerving. But a willingness to change and adapt is certainly worth the effort. Pinpointing how to influence the consumers with the highest propensity to convert once will likely yield a core target with the intent to buy again—filling the pipeline with a far more robust set of targets for the full lifecycle of the retailer.

Reactivate Inactive Customers: This can be a great strategy for cost-effective customer acquisition. In this case, retailers already have data on the customer and understand their needs. The customer, on the other hand, also understands the product and may have even demonstrated a certain level of intent. If the customer left because of issues like pricing, then this could be an opportunity to provide a discount or competitive incentive. Brands with new or improved offerings can reactivate a past customer as a way to reintroduce their catalog altogether. To understand the power of these approaches, look at UK global fashion retailer, New Look. By marketing to lapsed customers, the company was able to generate four times more orders with a 74 percent lower cost per order.

 A Steady Path to Scale: There is quite a bit of noise in the digital marketplace. As a result, it can be easy to get sidetracked, spinning resources on less impactful initiatives. To win in the omnichannel ecosystem, taking the long view is the best approach – and will provide retailers the greatest payoff for sustainable growth.

Jess Breslav is Managing Director, Mid-Market Americas for Criteo

 

Partner Content

Hincapie Sportswear Finds Omnichannel Success in the Cloud - Netsuite
For more and more companies, a cloud-based unified data solution is the way to make this happen. Custom cycling apparel maker Hincapie Sportswear has leveraged this capability to gain greater visibility into revenue streams, turning opportunities into sales more quickly while gaining overall operating efficiency. Download this ecommerce special report from Multichannel Merchant to more.
The Gift of Wow: Preparing your store for the holiday season - Netsuite
Being prepared for the holiday rush used to mean stocking shelves and making sure your associates were ready for the long hours. But the digital revolution has changed everything, most importantly, customer expectations. Retailers with a physical store presence should be asking themselves—what am I doing to wow the customer?
3 Critical Components to Achieving the Perfect Order - NetSuite
Explore the 3 critical components to delivering the perfect order.
Streamlining Unified Commerce Complexity - NetSuite
Explore how consolidating multiple systems through a cloud-based commerce platform provides a seamless experience for both you, and your customer.