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Why Does Segmentation Matter?
We’ve discussed the power of push notifications in previous blogs. The open rate is superior to e-mail and can be used strategically for very targeted messaging. While a mass blast to all your subscribers may be effective in terms of number of people reached, it can come back to bite you.
One of the key features of mobile commerce that shoppers gravitate towards is the ability for brands and retailers to personalize the shopping experience for their customers.
Yes, your notification will reach a large number of customers, but you run the risk of customers opting out of notifications, if they feel they’re being spammed with irrelevant and/or too many messages.
Irrelevant notifications can lead to:
- Customers unsubscribing
- Fewer return visits to your app / e-commerce site
- Lost revenue
This is where segmented push notifications come in. Yes, it’s exactly what it sounds like. Rather than a ‘shotgun’ approach where you send out a wide blast and hope to hit something, segmenting your messaging enables you to target more relevant promotions and communications to your intended audience.
The ability to selectively focus on groups of customers who share similar interests is a game-changer in terms of customer experience. When customers view content that’s relevant to them, it reinforces the perception that your company understands their needs, which in turn, strengthens customer loyalty.
Social selling, also referred to as social commerce A BizRate Insights survey revealed that (34%) of adults (18+) said they purchased something via social media. This is up from 29% a year ago. The survey showed an additional 27% of adults surveyed were interested in social commerce.
Shoppers in the range of 18 to 34 years-old are the most likely to shop through social media, with over half that demographic saying they had purchased through a social channel. To break that down even further, 42% of those shoppers were women.
It’s arguable that the “newness” factor of social commerce is responsible for a portion of the interest. But don’t dismiss it as a passing fad. Facebook, Pinterest and Snapchat have invested considerable time, money, and effort to ignite direct-to-consumer sales on their respective platforms. Instagram (owned by Facebook), now gives brands and retailers the ability to tag ‘shoppable’ content directly on their Instagram feeds. Customers can buy directly from the retailer without ever leaving the Instagram app. It’s part of the evolution of omni-channel shopping.
Snapchat added a shopping channel called “Shop and Cop.” Pinterest also expanded their partner program to support more shopping experiences. Social media companies are in a race to expand their shopping features to compete with e-commerce juggernaut Amazon, which has emerged as a big-time competitor in digital advertising.
While technologies like augmented reality (AR) and virtual reality (VR) are certainly cool, they don’t appear ready to take off on a large scale, and thus the traction isn’t there. Given the immense popularity and usage of social media, it only made sense for it to become a new sales channel for brands and retailers to capitalize on.
The way we shop has evolved, and as usual, consumer behavior and expectations dictate the direction that businesses take. Modern shoppers expect brands to have apps, and they expect to a seamless shopping experience across multiple devices. Throw social media into that mix and brands now have an essential component of omni-channel shopping that should not be ignored.
Raise your hand if you like paying full retail price. Wait, you don’t? Obviously I can’t see you right now, but I’m willing to take a chance and assume that you do not, in fact, like paying full retail price.
As modern shoppers, we’re conditioned to be on the lookout for discounts. A quick Google search allows us to compare prices to find great deals. If we’re subscribed to marketing materials for a particular brand, we may see a mailer, or an e-mail with a discount code or promotional offer.
And let’s not forget the undisputed champ of great deal days…Black Friday. Black Friday may as well be a national holiday by itself.
Many customers won’t make a purchase unless they have a coupon in hand, or a discount code to enter at checkout.
If you’re a retailer trying to attract new customers, and cater to your loyal customers, you’ve no doubt offered plenty of discounts and promotions over time. It’s a necessary and effective tool to bring in business. You take a small profit hit from the coupon, but ideally pull in enough revenue from additional purchases to cover the cost and then some.
Discount-savvy customers are trained to wait for your coupon before they make a move. Knowing that your customers are waiting for and expecting discounts, your promotions but be strategically-delivered.
One problem you may run into is flooding potential customers with TOO MANY discounts. Sounds strange, right? A customer turned off by getting too many discounts. You may have a customer who only shops periodically, and s massive amounts of e-mails may usher them towards the ‘Unsubscribe’ button.
Another problem is that your effort to reach a large amount of customers may reach the wrong people. I don’t mean people who aren’t interested in purchasing. I mean people who WOULD HAVE purchased WITHOUT a discount.
To avoid this, try to send promotions only to shoppers that you believe need them in order to convert, and select the most relevant promotion for each person.
Try testing different promotions for your high-value customers and your new e-mail subscribers. For example, send a general discount to your new subscribers to encourage immediate action, but send each high-value shopper an email that promotes new items in their favorite category. You may find that many of those loyal customers will be willing to purchase new items without a discount.
Then you can start segmenting further. Create a segment of shoppers who have purchased in the last 90 days and run a promotion to encourage them to make a repeat purchase. Segmented push notifications are a great way to execute this strategy. Combine the high open rate of push notifications vs e-mail, and a strategic set of targeted customers, and you could see considerably more success than your broad approach promoting everything to everyone. This is another key reason mobile commerce should be part of your omni-channel strategy
Let’s begin by defining each:
- Omni-channel e-commerce (meaning, “all” channels) unifies sales and marketing to create a single commerce experience across your brand.
- Multi-channel e-commerce (i.e., “many” channels), while less integrated, allows customers to purchase natively wherever they prefer to browse and shop
Developing a successful business strategy means understanding the differences between the two and picking the one that’s right for your business.
Multi-channel marketing and sales enable customers to not only interact with your products through whatever medium is most natural to them, but to purchase through that medium directly.
The best metaphor for a multi-channel marketing is a wheel with spokes.
At the center of the wheel is your product (i.e., a sale). On the outer rim of the wheel are your customers where each channel offers a separate and independent opportunity to purchase.
In Omni-Channel Retailing, Tommy Walker from Shopify offers what is easily the most expansive summary of the term:
“Omni-channel as a philosophy is about providing consistent, yet unique and contextual brand experiences across multiple customer-aware touch points, including brick and mortar, marketplaces, web, mobile and social.”
“It’s about allowing consumers to purchase wherever they are while communicating in a way that is in tune with why they use a given channel and showing awareness of their individual stage in the customer lifecycle.”
When making the jump from single-channel to multi-channel marketing, there are a few things you need to keep in mind at all times.
Most importantly, you absolutely need to know which channels your target customers typically utilize. For example, it would make no sense for a company whose target demographic consists of baby boomers to become present on Snapchat; similarly, a company targeting teens and young adults likely wouldn’t fare well by focusing on direct mail marketing and radio advertisements to generate a buzz.
Similarly, you need to consider which channels your target customers expect your brand to be present on, as well. When you have identified your channels, you then need to optimize your message each device accordingly.
When it comes to omni-channel marketing, the tenets mentioned above still apply – but there’s more. In addition to knowing where your customers are, knowing what they expect from you, and optimizing your presence on each channel your brand is active on; you also need to focus on using each of these channels to enhance the customer experience, as well.
It’s not just about being present on multiple channels – it’s about the value your presence brings to the customer via each of these channels.
If you’re familiar with e-commerce, and/or have read our other blogs, you know that e-commerce is being re-shaped and overtaken by mobile commerce. For brands and retailers who haven’t come aboard and launched a mobile app, there’s no better time than the present to get started.
With that in mind, let’s take a look at some things to consider about your app, that will attract your loyal customers, and more importantly, keep your app on their mobile device.
Good User-Experience (UX)
This is a pretty obvious element, but it bears mentioning. Put yourself in your customer’s shoes. Better yet, think of apps you have on your own mobile devices. Are they difficult to use and navigate? Probably not. Screen space is valuable real estate, and nobody is going to keep an app on their device that isn’t simple to use.
Some Elements of a Good UX
- Make things easy to find
- Clearly identify and provide detailed descriptions of your items
- Fast, secure, checkout
- No hidden costs
Just because you’re using technology, and aren’t face-to-face with your customers, doesn’t mean you can’t add a personal touch to their interaction with your app.
This is a prime example of why capturing rich customer data is important for understanding your customers interests and buying tendencies.
One example to take note of, is personalized push notifications. Amazon Prime does an excellent job with this. They will make personalized recommendations based on past purchases or related to items you may have left in your cart.
Flash Sales and Discounts
F.O.M.O…An acronym that stand for ‘Fear of missing out’. It’s that gut-wrenching feeling that everyone else is taking part in something, or getting something, and you’re on the outside looking in.
Flash sales are a business model in which a company offers a single or limited product selection for a discounted price over a short period of time. Sales typically last anywhere between a few hours to 24-36 hours.
You may not even need/want what’s being sold, but the idea of scarcity, and losing out on great deals is too hard for many customers to pass up.
Discounts are obvious. Why would anyone NOT want to save money? This is likely THE reason your customer downloaded your app. Make sure they’re seeing the benefits of having your app on their device. Also consider offering certain items as ‘app-only’ purchases.
Alternative Payment Options
Aside from secure payment options, digital customers demand a variety of payment options.
The reason is two-fold: Simplicity, and security.
Popular modern payment options include:
- Amazon Pay
- Google Pay
- Apple Pay
Simple check-out with minimal steps, and protected personal information. That’s what your customers expect.
Even cryptocurrency options like Bitcoin are gradually becoming payment options with retailers.
This was not by any means an exhaustive list. Consider these a solid foundation to build upon if you want to launch and maintain a successful retail app.
The internet has changed the way we work, the way we socialize, and the explosion of eCommerce has most definitely changed the way we shop.
Over the past decade, the evolution of both tech hardware and data networks has had a direct correlation with eCommerce.
Powered by tech giants like Amazon, who joined the space in 1995, and later Google and Paypal who launched their eCommerce initiatives in 1998, the overall journey of online shopping is far from finished, and is undoubtably accelerating.
If you’ve gone…well…anywhere, you’ve seen people’s eyeballs glued to their mobile devices. We have a mind-blowing amount of functionality, literally at our fingertips. You can stream digital content, order just about anything, navigate to places near and far, and of course, take selfies.
The point is, humans are seemingly as connected physically to their devices, as the devices themselves are connected to data. Whether that’s a good or bad thing, is certainly debatable.
In 2019, e-commerce sales are expected to account for 13.7 percent of retail sales worldwide.
Digital commerce is rich with customer data that provides valuable insight into the successes and shortcomings of your e-commerce business. Capturing and analyzing this data is key to your ability to be strategically agile. Even a minor change in your tactics can sometimes yield significant positive results.
Here are just a few of numerous key metrics that e-commerce professionals should track:
- Revenue by traffic source
- Average order value
- Shopping cart abandonment rate
- Sales conversion rate
- Percentage of mobile visits
- Social media engagement metrics
Analyzing such key data points empowers you to create buyer personas, understand where to increase/decrease marketing spend, identify which campaigns are impactful, and much more.
The number one reason people shop online is that they’re able to shop at all hours of the day. (KPMG report)
As customers, We’re more likely to spend our money on something we want, but most of us will also pay more if better service comes with it.
This isn’t a small distinction, either. You ignore it at your business’ risk.
86% of consumers will spend more if it involves a better customer experience. By 2020, customer experience is expected to become a bigger brand differentiator than price and even the products themselves.
If you want better retention and more conversions, you want to invest in engaging your customers.
- Enable Customer Feedback and Allow for Reviews
One easy way to improve your customer engagement in e-commerce is to let your customers give feedback. Provide them with a comments section or let them leave your company ratings.
- Provide Easy Access to Information
Across every industry, 81% of consumers will try to help themselves before asking a live representative to do so. 90% of them will go to your site first.
You can use these facts to improve your customer engagement in e-commerce by providing your visitors with a self-service portal that offers as many resources as possible. This could include everything from buyer’s guides to an FAQ.
- Immediately Engage Unhappy Customers
Customer churn is a serious problem. Lowering this number for your company could increase your profitability by as much as 125%.
Unfortunately, unhappy customers don’t always let you know before deciding to take their business elsewhere. For every 1 customer that complains to you, 26 don’t say a thing.
- Increase Account Creations
Most people would rather make purchases without opening accounts. So while they give you profits, they don’t help you improve your customer engagement on your e-commerce platform.
The key here is not to look for that account creation right away.
Wait until they make that initial purchase and then offer them the opportunity to start that account. At that point, you’ve earned a bit of trust, and they’ve proven they like what you have to offer.
- Leverage Technology
Ikea is using augmented reality to let customers preview how furniture looks on their smartphones before they buy.
In Ikea Place, customers can view 3-D renderings from different angles of over 2,000 products before reserving the ones they want in the app, which directs to the Ikea site to complete purchases. Currently, large furniture for living rooms such as sofas, armchairs and storage units are available to preview in the app, with more products in the pipeline.
Aside from the ‘cool factor’, empowering customers with the latest retail technology is an impactful way to engage and most importantly, retain them.
Whether data, engagement, or both, are your focus for leveraging e-commerce and mobile commerce, you need the tools to do it.