6 Ways Your Online Business Can Increase Conversion Rate and Basket Value
As the pandemic lock downs and restrictions caused people to stay inside, people turned to the internet to make their purchases. A trend which was already in full force, the pandemic has accelerated an existing shift towards online shopping. This shift has created both opportunity and struggle for those involved in the world of E-commerce.
With more time on people’s hands and an opportunity to take advantage of the shift to online shopping, E-commerce has boomed in recent years. Storeleads shows that the number of active Shopify stores being made has more than doubled from pre pandemic levels to post pandemic levels, with active stores per quarter increasing from around ~3500 to 8000 stores respectively being made per quarter.
As shown by the chart below, this has led to exponential growth in the cumulative number of stores. Now all this means that competition is growing more fierce and to come out on top stores are going to have to use a number of different strategies.
In the following blog post I will walk you through some factors to consider to help your online business succeed. Remember, no one strategy will be enough. To succeed, online stores need to use a combination of these recommendations, often at the same time, to position themselves against the competition.
1. Personalise Content and Offers
If you keep up with our blogs here at Bazar, you will be aware of the importance we put into online businesses personalising the shopping and marketing experience to get the best results. In fact, it's one of the pillars of our business and why online businesses using Bazar Surveys can better segment and target their customers.
Personalisation comes down to understanding who your customers are, what profiles they fit into and most importantly what kind of interests and content types are these people most receptive to. Online businesses should be doing a variety of advertising and content creation to get their message out there. Social media, digital advertising, content marketing, newsletters, email marketing, all of the above should be used when building a brand around your business.
But, the most common mistakes online businesses make is going broad and shallow with their digital marketing efforts. Basically, online businesses have the tendency to try everything and anything across all social media platforms in the hopes something sticks.
This is the wrong approach to take. Not only are you diluting your brand and your message but in the content you create that does resonate with one type of audience you may be alienating and disinteresting three other groups.
What you want to do is add depth and narrowness to your marketing efforts. Creating hyper relevant content for the right audience and getting it to them in the right manner. This may involve creating different newsletters for different customer types, different promotions for different audiences and creating different types of content for different social media platforms.
2. Sell on Digital Marketplaces
If you are an online business and you are not leveraging the other digital marketplaces that are on offer then you are missing out on a big opportunity. I am living in Indonesia whilst I work with the development team for Bazar and have a friend who runs a successful fashion E-commerce store. The success of the store increased leaps and bounds when she launched her products on Shopee, the Indonesian equivalent of Amazon/eBay and now the majority of all her sales come through Shopee as opposed to her own website.
The reason why is because Shopee has organic reach and organic traffic, it has the ability to run ads and promote her products directly through the platform and another big bonus is the fact that Shopee runs their own promotions which will provide customers discounts on her products at no cost to herself.
This is no different from the UK, Amazon has Amazon Prime which a growing number of consumers now have allowing for free shipping. eBay frequently runs promotions and I have personally had discount codes or even £5 off orders that benefit the sellers of the stores I'm buying off.
But again, there may be a need to have some personalisation here. For example, to benefit from Amazon prime you need to use their fulfilment services, so, you may not want to provide all your products on Amazon for example. But finding out what customers want and where else they are likely to shop beyond your website can help you put the right products on the right marketplaces.
3. Sell on Social Media
This is still a fairly new trend but one I expect to grow exponentially in the coming years. I won't go into it too much as it follows the same premise as point 2, but, think about Facebook Marketplace as a place to sell and especially the likes of TikTok and Instagram which are launching features which will make direct to consumer transactions a lot more seamless.
Don’t wait until these are established avenues to sell on, jump the gun and get ahead of the crowd and start using them now. This will establish your brand early on and have you well positioned to take advantage of them as they grow.
4. Offer Discount Codes
E-commerce stores should be using online discount codes as an important and effective marketing and pricing tool. They are seen as a way to both attract new customers and retain old customers.
Discount codes are a common tool used by online businesses but one problem with them is that consumers are getting somewhat desensitised to them. It is all too common nowadays for online businesses to have a pop up to new customers offering them 10% off their order if they sign up to the newsletter or to see a coupon banner at the top of an E-commerce website.
It’s because there is an expectation that this will be there which means its purpose, to drive sales and conversions, is somewhat diluted. This isn’t to say that discounts aren’t still an effective tool, but, there needs to be a rethink about how to make them effective.
To do this, personalisation comes to play again. To make discount code strategy effective, you want to offer the customer a discount code at the time it counts. This is often when you are attracting a customer through digital advertising.
The idea here is to again segment your audience and understand what segment is interested in what product type. You then want to advertise this product to that segment accompanied by a discount code so, if they click on the ad, they click on the ad with the intent to make a purchase for that product. Then you would hope they have a browse on the website and make other purchases too but regardless their intent is clear and it's the discount which bridged the gap between them liking the product and them wanting to buy it.
This sense of reward is lost when the consumer is offered the discount as soon as they land on your website before they know if they like a product you're offering or not.
5. Enable Product Review
Product reviews are an effective way to increase conversion rate. They firstly promote customer engagement which helps build brand loyalty with your current customers. Secondly they increase the trust someone has for you and your product which then in turn promotes the sales of products.
Product reviews can be embedded into your website or you may want to ask people to leave reviews on sites such as TrustPilot. It is a well known and effective tactic for E-commerce stores to promote their TrustPilot score on their website (if it is good, that is) and then link to the TrustPilot forum where people can go and read the reviews themselves.
6. Implement Recommendation System
Recommendation systems are an effective tool E-commerce stores can use to increase the basket value of customers orders. It can even help promote purchases themselves with complementary products increasing the desire the consumer has for the initial product they are looking at.
Recommendation systems rely on stores promoting complementary products when customers are browsing on their website. So for example if you are a fashion store you may recommend a pair of jeans which go with a top that a customer is browsing. Or if you are a hardware store you may recommend drill attachments when someone is browsing a particular drill.
What to Do Next
Now we have gone through the six recommendations to help drive your online businesses conversion rate and basket value, it's time to implement these recommendations into your strategy. You may already be implementing some of these strategies already, whether this is the case or not, what you want to be doing now is building an integrated strategy.
An integrated strategy involves combining all the recommendations above in a way which allows each recommendation mutually beneficial to another. This can be done in various ways, so instead of writing an exhaustive list in each different way it is better to help you think about how you can best do this yourself. This way you can think which method would be best for your business's current needs.
Personalisation should be an overarching theme which ties into all the other strategies as if you are able to personalise, then the integrated strategy you use will become far more effective. So let's say you have identified a target market for a particular product and you want to use a discount code strategy to increase the conversion rate. You would advertise this product to the target user and accompany it with a discount code for the product.
Remember, as we mentioned above, if the consumer clicks on this ad their intent to purchase is already quite high, helped by the discount code. So, using an integrated strategy, you could then use the recommendation system to recommend a product that would go well with that product advertised.
Now, we know the customer likes the original product as they clicked on the ad and they have a good chance of converting as you offered a discount, if they now see a complementary product that they also like then we are not only increasing their basket value, but, also there conversion rate as now the discount they are receiving is increased as the basket value is higher.
Creating these virtuous circles along the customer journey is what an integrated strategy is all about and personalisation in the sales cycle is an integral step to get the customer to start the journey in the first place.
If you want to understand more about your target customers, check out our solutions page, where you can see the types of surveys you can be asking your current and future customers to get a better understanding of your target customer segments.
For more information on how Bazar can help your online business get to know your target customer better, contact us here.