strategies to maximize the effectiveness of your online merchandising and promotions plan
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1 WHITE PAPER strategies to maximize the effectiveness of your online merchandising and promotions plan Executive summary Now, more than ever, the lines between corporate sites and online stores are blurring and online stores are becoming a true window into your brand. When designing a merchandising program, it is important to know your end customers and the levers that influence their purchasing decisions whether premium product, pricing or brand loyalty and then think about how to increase either close ratios or order value. Readers of this paper will gain insight into some of the best practices they should consider when looking to create an online purchasing experience that is relevant, dynamic, and personal to the consumer. Best practices Acquisition Retention 1 Capitalize on seasonal traffic spikes via name capture. 3 Treat your customers like VIPs. 2 Keep products and promotions front and center. 4 Offer online exclusives. Conversion conclusion 5 6 Use shipping as a lever. Give customers control of their basket. Conclusion About Digital River
2 Best Practices for Customer Acquisition. The more eyeballs on your site, the better. By casting a wide net when spreading the word about a new promotion and aligning your acquisition channels, your business has a much greater chance of getting those eyeballs to move beyond a fleeting glance. Driving a consistent message everywhere consumers are online through paid search, SEO, and your homepage, helps entice visitors and turn them into customers. 1. Capitalize on seasonal traffic spikes via name capture. With the holidays comes an influx of first-time visitors to your site. While some may only be interested in purchasing gifts for friends or relatives, others have the potential to be long-time customers. Make the most of the spike in traffic by capturing as many names and addresses as you can so you can include them in your marketing plan. One of the easiest name-capture strategies to implement is to add a visitor overlay message to your homepage. The moment a new visitor lands on your site they are presented with the option to quickly enter their name and address, or are directed to a branded landing page that enables them to opt in or opt out of follow-up communications. Leading commerce platforms provide custom integrations to support the data flow from the visitor overlay module or landing page to your contact database. Leading commerce platforms provide custom integrations to support the data flow from the visitor overlay module or landing page to your contact database. Should a new visitor bypass the initial overlay, another best practice is to stripe the name capture module across the top of the homepage and landing pages, presenting a constant visual cue for the visitor. Or, by tying the name capture to a specific offer, a site visitor might be compelled to enter his/her name. Once you capture a new customer s addresses, one way to instantly engage them is with a discount or offer for joining your customer base. A welcome discount is a powerful tool to help business instantly build a relationship with a customer and make them feel special. Additionally, it is an opportunity to open up your preference center or capture additional demographic or preference information to help tailor future marketing activities and serve up the right content to meet their needs. 2
3 2. Keep your products and promotions front and center. Most shoppers have short attention spans. If they can t find content that s compelling or products that spark their interest instantly, they move on to the next store. And, according to a Shop.org study conducted by Forrester Research ( The State of Retailing Online 2013 ), more than 50% of those online shoppers use mobile devices like tablets and smartphones to research products, compare prices, and make purchases,. So, it s no surprise that businesses spend a lot of time perfecting the art of product and promotion placement on their sites and landing pages, and making sure that content is easily consumable across all devices. Another statistic of note from Forrester s survey is that 72% of retailers have earmarked product detail page enhancements as one of the top five merchandising priorities for the year. One way that businesses are adapting their online stores to meet the demands of omni-channel commerce and enhance shoppers sensory experiences is by shifting to a flat site design. This type of site design offers a simple and clean look and feel, and enables product photos and graphics to take center stage. Combining amplified visuals with the use of video and 360-degree product experiences also helps create a sensory-focused experience for the buyer, helping them connect to a product like they would in a brick and mortar store. 72% of retailers have earmarked product detail page enhancements as one oftheir top priorities for the year. - Forrester, State of Retailing Online 2013 In addition to an optimized site design, a report published by Gartner, Effective Use of Online Personalization can Increase Digital Profit, cites that the customer shopping experience is optimal when consumers have the ability to see what other shoppers have purchased or viewed. Consider creating a section on your homepage that highlights your top five products. Some multi-tenant SaaS commerce platforms have built-in technology that uses purchasing data to automatically pull in products that are purchased most frequently. These types of platforms have settings that enable you to dictate the products that appear within the module, so that you are highlighting those that offer the highest margins. With the right predictive analytics program in place, you can serve up complementary products based on past purchases from other shoppers or based on the individual shopper s past purchases. Gartner further asserts that the customer experience is enhanced when a business offers recommendations specifically designed for a customer, because the buyers start believing that the seller really knows and cares about them. 3
4 Best Practices for customer retention After capturing the attention of your new customers, keeping them engaged becomes the next challenge to overcome. The trick is to provide them with the right mix of communications and offers that help deepen your relationship and keep them coming back. By providing your customers with the opportunity to self-select into an elite group of shoppers and creating demand for a special set of products only available online you can keep them wanting more. 3. Treat segments of customers like VIPs. Consumers have come to expect a personalized shopping experience no matter what device they are using. According to Forrester, online retailers are spending time integrating the commerce capabilities needed to create site modules that are dynamic and tailored to information gathered about a customer ( State of Retailing Report 2013 ). Using data associated with purchasing or browsing history, via name capture, businesses can create dynamic site elements; programs that are customized for a specific set of customers. Making it easy to enroll in your VIP program helps build your base, and makes your brand more approachable. One way to cultivate strong relationships with customers and provide another layer of personalization is through the development of a VIP program. This type of program enables you to give your best customers early access to your key promotions and reward them for their business. Not only does this provide an air of exclusivity and connection with your brand, but you have the ability to serve your VIP audience a select set of products and preferred pricing. Consider the creation of a landing page tailored to your VIP audience. Today s leading commerce platforms provide functionality to help you create a unique shopping experience that is not searchable on the internet, and enable you to set business rules regarding price and quantity restrictions, custom discounts, and authorizations. You can set by address, IP address, or friends/family contact information, depending on the model you have set up for your program. While a VIP program is a great way to deepen your relationship with your best shoppers, it can be a delicate balance not to alienate other segments of shoppers. That said, making it easy to enroll in your VIP program helps build your base, and also helps make your brand more approachable. Add a name-capture opportunity right on your homepage or as an overlay to keep the program top-of-mind and easily accessible to all site visitors. 4
5 4. Offer online exclusives. When your products are available at brick and mortar stores and other online properties, you need to look for ways to differentiate your online store. One of the ways to draw buyers to your site is by offering a distinct set of products that are unavailable through those other channels. Many companies in the gaming, high-end retail, and entertainment industries have used this approach quite successfully. Whether it s a completely new product, new color, or new bundle, you can use that point of differentiation as a draw to your site. For instance, you might offer a game that is not available in stores or throwing in a unique colored controller with the purchase of a console. Making it easy to enroll in your VIP program helps build your base, and makes your brand more approachable. Around the holidays, in addition to exclusive product sets, consider providing service offers only available online, like signature gift wrapping or personalized engraving. This creates the perception that your products and offerings are unique one more reason for your shoppers to stay on your site instead of going to the brick and mortar store down the street. Additionally, you can use online exclusives as a way to test out a limited quantity of products on your buyer base before committing to the production and fulfillment of large quantities of product. Best Practices for Driving conversion.. Lastly and most importantly, how do we make the purchasing process easy for the consumer so that it they purchase your products again and again? While your online store is a window into your brand, it also is a significant source of revenue. Once you ve gotten visitors to your site and convinced them to return, it is key to turn a browser into a buyer. The purchasing process needs to be simple and compelling for your customers, so that they buy your products, Use meaningful offers as a tipping point, and give your customers the autonomy to customize their basket of goods. 5. Use shipping as a lever. 40% of respondents picked free shipping as the number one reason that they spent more than they doriginally budgeted for holiday purchases. - Shop.org, Strategies to Help Retailers Win the Web s Free Shipping War 5
6 Customers tend to spend more when they receive free shipping. A Shop. org survey of spending in Q4 2011, Strategies to Help Retailers Win the Web s Free Shipping War, showed that close to 40% of respondents picked free shipping as the number one reason that they spent more than they d originally budgeted for holiday purchases. When you create a shipping offer, make it sticky by promoting it sitewide. By incorporating the offer within the header of your product and landing pages, as a static placement on the left navigation, on the product page, and within the cart, consumers are constantly reminded of it. Leverage promotional space, , landing pages, and social media to further communicate shipping timing and expectations to your shopper base. This is especially crucial during holiday time, when arrival times are critical. Not only does a shipping offer need to be well-placed, but it also needs to be compelling and differentiated. For instance, Saturday is the day that residential customers are most likely to be home to receive a package. FedEx SmartPost, which utilizes the U.S. Postal Service for final delivery, delivers on Saturday. By tying that shipping method into your offer, you have made a strong case for a consumer to purchase from you, because it may be a more convenient option for them than making a trip to a physical store. When you craft the messaging around your offer, use language that will elicit an emotional response or connection. That means knowing your customer and what is most beneficial to them. For example, many customers shop online because it is so accessible, but shipping can often be expensive and returns can be complicated. Make it clear that shipping and returns will be quick and easy. If you can get your customers to sing praises about products that they ended up sending back, you know you are doing something right. And you ll have an advantage over brick and mortar stores and other sites. Because the discount is striped across the entire bundle, you can not only streamline your messaging, but also avoid channel conflict keeping your customers happy, and your channel happy too. 6. Give consumers control of their basket. One of the ways to drive up order revenue and provide customers with a preferred set of products is to provide them with the ability to create a custom bundle. A custom bundle provides shoppers the opportunity to select products from various groups that you have created within your offer. Depending on how you configure the offer, you can provide shoppers with the option to select a certain number of products, or require that specific products be included within the bundle. You can also dictate the minimum or maximum products that can be selected. For example, if you are a branded manufacturer, your customers might have the opportunity to purchase a television and DVD player, and with that purchase, they can select two movies from a variety of titles for a discounted price. 6
7 Leading commerce platforms provide you with the technologies and tools to help you easily configure combinations of products and pricing specific to the offer. Ultimately, you have control of the restrictions set on the products but you provide the consumer with enough autonomy to create their own shopping basket. Because the discount is striped across the entire bundle and not attributed to a specific product, you can not only streamline your messaging, but also avoid channel conflict, keeping both your customers and your channel happy. Once the shopper has fulfilled the requirements for the offer, they can check out and complete their purchase as usual. And they will have likely purchased a few more products than they originally intended. conclusion While these best practices work for many businesses, every company and consumer set is unique. It is important to know what your customers want, and also important to test any new program that you put in place to make sure that it is resonating with your buyers. By building a robust analytics program that spans each phase of the customer journey, including A/B and multi-variate testing, you can better measure and manage the effectiveness and understand the true ROI of your merchandising and promotions efforts. about digital river Digital River, Inc. builds and manages online businesses for software and game publishers, consumer electronics manufacturers, distributors, online retailers and affiliates. Its multi-channel commerce solution, which supports both direct and indirect sales, is designed to help companies of all sizes maximize online revenues as well as reduce the costs and risks of running a global commerce operation. The company s comprehensive platform offers site development and hosting, order management, global payments, cloud-based billing, fraud management, export controls, tax management, physical and digital product fulfillment, multilingual customer service, advanced reporting and strategic marketing services. Digital River is headquartered in Minneapolis with offices across the U.S., Asia, Europe and South America. For more details about Digital River, visit the corporate website, follow the company on Twitter or call
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