Alan Chester, VP of eCommerce at Luzern explores how to be successful in a multichannel sales world.
Fueled by the pandemic, changes in shopping behaviour have touched virtually every corner of the globe. In fact, the UK is experiencing the fastest eCommerce growth rate in the past decade. With up to 87% of UK households making online purchases in 2020, eCommerce sales grew by 46.1%. Although this represents the highest eCommerce purchase penetration rate in the last 11 years, UK online shopping is forecasted to grow an additional 34.5% by 2023.
As these figures indicate, the UK eCommerce market is poised to experience unprecedented growth and the consumer electronics space is no exception. Today eCommerce sales in this segment account for 33% of total sales. According to Statista, in the Consumer Electronics segment, a whopping 43% of total market revenue will be generated through online sales by 2023.
Take online sales to the next level
In the UK, shoppers generally prefer to make purchases from eCommerce marketplaces rather than directly from brands. This makes it imperative for consumer electronics’ brands and retailers to reimagine their eCommerce sales strategies in order to be part of what experts predict will be a $1.787 billion industry by 2024. Today, many consumer electronics’ brands and retailers lack an end-to-end eCommerce solution. This is a necessity in order to attract buyers, convert browsers into customers, fulfil orders, deliver products purchased, and provide exceptional customer service for online purchases.
To be successful in our multichannel sales world, the long-term viability of consumer electronics brands rely on the following seven strategies:
- Optimise product listings to attract buyers: While product feeds (or product data feeds) are used to varying degrees by all industries, it’s an essential component for the success of online consumer electronics sales. A product feed is a file that consists of all of your products, product details, product images, marketing copy, product attributes, etc. Content quality and optimisation of product listings are critical in building brand equity and developing customer loyalty.
The key to attracting shoppers and converting them into buyers is through quality imagery and copy, including titles and bullet points which improve algorithm rankings to maximise the product’s visibility. In addition, video has been proven to be particularly effective in creating brand and product awareness, as well as being a successful sales conversion tool. Finally, comprehensive product and keyword research and an in-depth competitive landscape analysis further assists in developing persuasive sales, style, and backend keywords – all of which aid in optimising your products within search results.
- Increase average order value: Having a high average order value (AOV) can offset your advertising costs and create higher profit margins. Instead of offering blanket discounts you can bundle products based on buyer preferences, offer new products, and create unique bundles based on customer insights. When you give customers what they want at an attractive price, you’ll be in a position to pique their curiosity and interest. In addition, another way to increase AOV is to offer exclusive seasonal bundles at various times of the year such as Prime Day, Black Friday, etc.
If you’re in the consumer electronics business, you already know that Prime Day is one of the most popular shopping days for consumers. What happens when your competitors undercut your prices and whisk your customers away from you? It goes without saying that pricing can be the difference between a purchase and customer churn.
Your competitors are most likely already using pricing tools to increase their customer base. While repricing your products using automated tools is becoming a common strategy, there are other factors you need to be aware of to grow customer loyalty and receive premium payment. The two most important strategies for you to embrace are shipping time and product reviews.
To start, take a look at your track record of customer satisfaction. Typically, customers will pay more to a brand they trust and will guarantee delivery faster than the competition. Be sure to look at your shipping processes and partners and do what you need in order to reduce delivery times. Next, check your social media standing. If you’re receiving less than ideal reviews or if you’re receiving a mix of high and low ratings, the first order of business is to promote positive customer feedback and ensure that it’s easy for potential customers to find the new and positive reviews and ratings you’re receiving.
- Enhance underlying technology: Attracting customers to your online site requires a user-friendly interface (front end), however what’s “under the hood” (back-end) is of equal importance. Headless commerce is the decoupling of the front-end website presentation layer from the back-end eCommerce functionality. In order to effectively track sales and competitor performance, brands require a technology that provides experience-driven commerce that is underpinned by an analytics platform in order to receive accurate demand forecasts by product and the market. By using shopping behaviour data, brands will be in a better position to understand their customers’ digital footprints and will have the insights needed to improve their selling strategy.
- Provide frictionless delivery: As the number of online shoppers continues to rise, “last mile” delivery services will be key in meeting customer demands. Brands and retailers need to provide more flexibility when it comes to providing buyers with options for deliveries, pick-ups, and returns. In fact, customers are increasingly requesting drop shipments, which is compelling brands to modify their fulfilment models and supply chains. The move from traditional warehouse fulfillment to using drop-shipping companies provides benefits for both the customer and the brand. Essentially, the brand simply sells the product and passes the sales order to a third-party for fulfillment and shipment.
- Build trust through social commerce: Brands with exceptional social media are better able to build trust with target buyers, as well as use the platform to showcase their products. Although social commerce is still a growing trend for consumer electronics brands, those that are using the platform are in a better position to drive sales and increase the lifetime value of customers. This trend is being encouraged by social media platforms that are optimising in-app eCommerce features. For example, Instagram recently launched an in-app checkout, which is already showing success.
- Reduce Cart abandonment: Based on eCommerce studies, shopping cart abandonment rates continue to be high, with the average between 68.8% and 74.5%. Although buyers with low-value orders are more likely to abandon their trolley, the most common reasons for abandonment include higher than anticipated shipping costs, complicated ordering or checkout processes, long delivery times, and websites that are either poorly designed or lack functionality.
To reduce trolley abandonment, brands should inform customers at the start of the shopping journey of shipping costs and other fees. In addition, by using the data you collect you can track abandonment, benchmark these figures and experiment with A/B or split testing to make changes that will reduce abandonment rate.
- Determine the right eCommerce marketplace: With more than 60% of product searches beginning on Amazon, this marketplace can’t be ignored. Regardless of your industry, brands and retailers are unlikely to survive if consumers can’t find their products on Amazon. However, selling on this platform is not without inherent difficulties.
Research determined that of the nearly 70% of UK online shoppers, more than half prefer to buy from eCommerce marketplaces, with Amazon being four-times more popular than retailer sites and apps. To meet consumers on their platform of choice, brands need to have a presence on Amazon or risk financial decline.
Overcome the challenges of selling on Amazon
Whether selling direct to Amazon (first party sales or 1P) or selling through third-party vendors (3P), brands face a multitude of challenges, which is making it difficult for them to remain viable and profitable. While the challenges are not a new phenomenon, the pandemic, which has given a rise to online shopping, has made it imperative for brands to be on their target market’s platform of choice.
Recent research found there were several frequently encountered issues that brands have the most difficulty in overcoming, which are listed below, as well as the strategies needed for them to remain competitive.
- Almost half (45%) of eCommerce decision makers said that gaining and keeping control of their brand on Amazon is challenging, and more than 50% stated that navigating Amazon is extremely difficult.
- 42% of respondents highlighted the importance of being able to set AOV that aligns with their pricing strategy.
- Although 80% agreed that eCommerce is vital to their digital transformation, 40% cited that navigating the ever-changing landscape as problematic.
- 40% are encountering problems in reaching their target markets.
- Over one-third (39%) encounter difficulties in being able to competitively price their offerings.
Although more than 86% of eCommerce decision makers agree that selling on Amazon is critical to their long-term survival, the complexities of the Amazon platform continue to create barriers that are prohibiting brands from reaching their goals.
Thriving in today’s eCommerce world requires the right Amazon strategy. To address the complications of selling on Amazon, brands are increasingly embracing a hybrid 1P and 3P sales approach. By harnessing the power of this strategy, brands are able to achieve a level of autonomy that was largely elusive with just a 1P sales approach.
The flexibility of the hybrid sales model is giving brands more control over their products and pricing, while protecting their 1P relationships. By partnering with an Amazon specialist, brands can quickly adopt the latest technologies, which aids in future-proofing their business against the ever-changing eCommerce landscape and providing them with a competitive advantage.
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