What Role Does Loyalty Play in Online Shopping?

Customer loyalty has historically been formed largely through face-to-face interactions. However, with the advent of online shopping, retailers have found it significantly harder to build brand loyalty, instead focusing on factors such as product selection, convenience and lower prices to drive revenue.


There’s no doubt that ecommerce channels present many advantages to retailers and consumers alike, particularly given the rise of mobile and the added accessibility and convenience it brings. At the same time, being spoiled for choice has also had its effect on the consumer market – there is now so much competition that it’s easier to lose customers than ever before.


Transforming new customers into brand ambassadors can be challenging when you’re working with a medium as impersonal as ecommerce. Nonetheless, by guaranteeing customer satisfaction and taking steps to acquire their trust, you’ll be in a better position to turn a new customer into someone who will happily spread the good word about your business through social networks and other platforms.


Customer Loyalty Is Declining


Being spoiled for choice in an often extremely competitive marketplace, it shouldn’t come as any surprise that customer loyalty is dropping steadily. In fact, conversion rates have dropped by 28% in the last seven years. The rapid rise of comparison shopping and the relative ease of finding alternatives online have also made it more difficult for brands to hold onto existing customers. As such, many consumers don’t even consider brand loyalty to be a significant factor in their purchase decisions.


To overcome this trend, retailers need to work harder to better accommodate their customers through personalized loyalty programmes and excellent online content. After all, no longer is customer loyalty just about face-to-face interactions and competitive prices.


How Mobile Commerce Influences Customer Loyalty


Mobile commerce is rapidly catching up with desktop commerce, with more than 40% of online transactions now occurring on the small screen. Online stores that don’t provide an optimal experience on smartphones will likely be losing out on a great deal of potential revenue. Additionally, some digital loyalty programmes are not nearly as effective as they’re only tailored towards desktop users, or those using physical loyalty cards.


Studies show that 70% of consumers will develop a better impression of a company that allows them to save a loyalty card to their smartphone. From the consumer’s perspective, mobile loyalty programmes are far more convenient, since they can present things like personalized discount cards and digital loyalty cards in-store rather than having to print something out or carry around an additional card.


The same study also found that 83% of consumers appreciate a personalized approach whereby they receive specific rewards and promotions for events such as birthdays and anniversaries. By demonstrating to new customers that you’re aware of their individual needs and desires, you’ll be in a much better position to retain their business. If, on the other hand, a customer feels like nothing more than just another sales statistic, they’re not likely to feel any sense of loyalty to your business.


The Importance of Online Content for Building Brand Loyalty


One of the biggest challenges with building a highly visible online brand is getting heard amongst all the noise. However, according to NewsCred Insights, 62% of millennial consumers consider meaningful online content to be a major driver in brand loyalty. Every day, millions of people, particularly those belonging to the millennial generation, turn to the web to find answers to their questions and solutions to their problems. That’s why content marketing, especially social media, have become so important. Nonetheless, many companies have yet to embrace the potential of quality, engaging and relevant content to increase their brand’s visibility and influence.


Millennials generally aren’t interested in receiving sales messages, hence the rapid decline of traditional advertising in recent years. Instead, they want actionable content in a variety of formats, such as social media updates and blog posts, that helps them to fulfil their goals.


Building an ecommerce empire is no longer about sending sales messages – it’s about building loyalty through a strong, consistent and genuinely helpful online presence. From personalised loyalty rewards to value-adding content, online retailers need to do everything they can to build and retain audiences in an increasingly crowded marketplace. It’s about a two-way, engaged conversation between retailers and customers.  


Mobile Ecommerce Trends – What Are the Numbers Telling Us

While adopting a mobile-first approach may require an extensive overhaul of your website, the benefits are undisputable. Thanks to the increasing ubiquity of smartphones and tablets, interactions with potential and existing customers can happen anywhere at any time instead of being restricted to the desktop.


Mobile traffic overtook the desktop around three years ago, and around 90% of consumers now keep their smartphones with them around the clock. The mobile share of the ecommerce industry continues to skyrocket, profoundly effecting the industry to the extent businesses are now more likely to talk about ‘m-commerce’ rather than e-commerce. Mobile is now the defining platform of the online shopping experience, as these trends and statistics prove:


Ecommerce Sales

Just a few years ago, using a smartphone for online shopping was fraught with frustration as consumers struggled to navigate the average website on the small screen. Today, mobile accounts for well over half of all web traffic, and more than 40% of e-commerce transactions now take place on smartphones or tablets. From the consumer’s perspective, mobile is more convenient for shopping, since they can browse online stores, add items to shopping carts and make payments no matter where they are.


Shopping Cart Abandonment

People abandon online shopping carts for all sorts of reasons, such as a lack of preferred payment and delivery options. However, easily one of the biggest impacts on shopping cart abandonment is the user experience. Try navigating an online store that’s designed primarily for use on a desktop device, and you’ll quickly see how fiddly and frustrating the experience can be. Nonetheless, despite the unprecedented rise of mobile, many e-commerce stores are still woefully outdated when it comes to user interface and functionality.


Studies show that almost a third of mobile shoppers will abandon their shopping carts if the experience isn’t optimized for the small screen. Given the fact that mobile commerce is growing, this clearly isn’t an opportunity that retailers can afford to miss out on.


Buyer Journey

Online shopping has very much become an omnichannel experience, and while desktop devices aren’t going anywhere in the foreseeable future, there are now more ways to access the web than ever before. Mobile now plays an important role at every stage of the buyer journey from initial discovery to making a transaction. In fact, the latest statistics show that sixty percent of consumers have made a purchase on a mobile device, either to pick up an item in store or order online.


What this statistic demonstrates is that different people like to shop in an increasing number of different ways. For example, many consumers still use mobile devices only for initial research, hence the growing popularity of mobile-friendly comparison shopping, while leaving transactions themselves to desktop devices. Others, however, prefer to use the mobile for the entire buyer journey right up to making an order. In fact, the mobile-only consumer, who doesn’t even use a desktop device, is rapidly becoming commonplace.


Black Friday Sales

Despite being an American tradition, Black Friday sales are rapidly gaining ground in the UK and elsewhere in the world. In the US last year, shoppers spent $3.34 billion on online shopping during Black Friday, with $1.2 billion worth of those transactions taking place on mobile devices. That presents a 33% increase over the previous year, yet again exemplifying the fact that mobile commerce is already a big thing.


Online shopping is now an omnichannel experience with a strong focus on the availability and convenience afforded by mobile devices.

Are shipping fees costing you customers?

Online retailers are becoming incredibly sophisticated in their ability to impact conversion rates based on hundreds of different variables.  New technologies allow purchase screens to be customised based on user data (i.e. where a customer is purchasing from, time on site, location, previously browsed items, etc.), meaning that e-retailers can be super-specific in their targeting to increase conversion rates.

There’s already been a lot of work done to get the customer to the stage where they are ready to click “add to basket”.  You’ve attracted customers to your site, you’ve encouraged them to commit to a product, and it’s in their virtual basket – ready to be purchased.

So what is stopping customers from moving forward to complete the purchase?

It’s all comes down to one decision – to buy or not to buy.  Psychology sits at the heart of these decisions, and understanding the reason for your abandoned cart rates can help you to break down the psychological barriers that are stopping customers moving forward.

In a report from UPS (1), the number one reason for abandoned carts globally was that shipping costs increased the overall purchase price more than expected.  If we think of the psychological process at play here: customers firstly decide on a product, are happy with its price and features, and then add the product to their basket.  The customer is mentally calculating the overall price as they add their different products to their basket.  They then move forward to complete their order and shipping costs get added.  The price is more than they were expecting.  Or maybe it is the price they expected but mentally it pushes the overall basket value above their desired purchase price.

And this is enough for customers to abandon their cart and leave their items.

One factor that could be causing the high rates of abandoned carts is that customers are testing the shipping costs and how they will be applied to their purchase.  The cart isn’t really abandoned as it was never a serious purchase – it was an elaborate calculator to help gauge the shipping costs.

Even removing this factor, the addition of shipping costs is still a blocker for customers moving ahead with their purchase.  So what can you do to step in and impact the psychology of your buyer so the sale has a higher chance of moving ahead successfully?

How could retailers address this issue earlier?

Is it an option to try and put this (even potentially unattractive) shipping time and cost information upfront so that customers are not surprised when they see shipping costs added?  Could shipping costs be added to the basket subtotal when any items are added so that the increased cost is not a late addition to the purchase journey?

The other option is offering free shipping and removing shipping costs altogether.  This could put a strain on profit margins, but it might be a worthwhile activity to calculate the cost of abandoned carts to the business – i.e. what revenues would you have achieved if even just 10% of those customers had completed their purchased, and compare that to the cost of offering free shipping costs to all customers.

If this is a psychological blocker that is preventing customers from buying then increasing product costs ever so slightly across the board to account for the cost of offering free shipping could mean the difference between high rates of abandoned carts and winning lots of new customers.

In Europe, 49% of consumers abandoned their cart because shipping costs were too high (which is actually lower than the averages in the US at 54% and Canada at 61%).  Sometimes this is because orders haven’t been large enough to result in free shipping qualification.

Is the problem actually worse than we expect?

However, some reports show even higher numbers of abandoned carts due to shipping costs.  A report highlighted in eMarketer by FuturePay (2) said that 86% of surveyed respondents said that the cost of shipping resulted in cart abandonment, so it’s clearly a problem for retailers to get right.

Amazon has tried to combat this barrier through its free shipping option for Prime members.  A report by cg42 (3) found that 91% of Amazon Prime members said they signed up for the service based on the lure of free 2-day shipping.

What appears to be a common theme amongst many of the reports and surveys is that better communication about delivery options and associated costs in order set more realistic expectations earlier on.

A report by Meta Pack (4) found that 66% of consumers would move to another brand if there were more attractive delivery options available – so shipping costs and delivery times are clearly at the top of the agenda for customers when deciding whether to complete a purchase.

An article from the Royal Mail highlights an interesting point from a Deloitte report (5), saying that retailers will need to move quickly to better respond to consumers’ expectations – with same day delivery becoming more standard in our online shopping experiences. Some reports are also suggesting many consumers are now expecting free same-day delivery which is obviously ahead of many retailers’ current offerings.

So with the huge impact that delivery costs have on customers’ decision making, combined with the availability of suitable delivery options, retailers will be looking at ways to make delivery option information more prominent on their sites to enable consumers to be updated earlier in the process.



(1)   https://www.ups.com/media/en/gb/ups_global_paper.pdf

(2)   https://www.emarketer.com/Article/Cart-Abandonment-Really-Come-Down-Cost/1015092

(3)   http://cg42.com/

(4)   http://www.metapack.com/report/delivering-consumer-choice-infographic/

(5)   http://www2.deloitte.com/au/en/pages/consumer-business/articles/global-powers-of-retailing.html

Commuter Clothing Expert: How To Reinvent Marketing To Make It Work For You COMMUTER CLOTHING EXPERT: HOW TO REINVENT MARKETING TO MAKE IT WORK FOR YOU

Great video from the guys who created Outlier Performance Clothing.

Founder of Outlier Tailor Performance Clothing, Abe Burmeister, spoke at PSFK CONFERENCE 2014 about how he learned that clear communication both within and outside of his company could create a successful marketing strategy.

For full post please have view http://www.psfk.com/2014/05/abe-burmeister-outlier-psfk-2014.html#!PeftS


Interesting video about the ‘inspiration corridor’ for helping you choose product mixing the ease of online shopping with the fun of shopping.

Created by DigitasLBi Paris and real estate investment company Klépierre, the Inspiration Corridor is a large booth that offers users a personalized digital shopping experience. Shoppers step into the booth and undergo a complete body scan, with the Inspiration Corridor taking note of their age, sex, and current ensembles. From there, it brings up digital displays of items located in that mall that you might be interested in, and could potentially buy on the spot.

Thanks to http://www.psfk.com/2014/04/inspiration-corridor-online-offline-shopping.html#!FjKrm


There’s still much mystery surrounding the recent cyber heist in which tens of millions of credit card numbers were removed from a major retailer’s POS system, though we learn more almost every day. The always indispensable Krebs is a good starting point for background information and very informed speculation.  There are good reasons—based on FBI analysis no less—to believe that some of the malware and techniques go back to at least 2011.  The hackers exploited a gap in the retailer’s PCI compliant IT system—technically compliant at the time of the last audit—at a point where the credit card magnetic strip or track data was still unencrypted—on the POS machine itself. In the FBI’s view, there isn’t encouraging news here: they believe that this type of attack will only continue to increase in the near future.

However, anyone who’s ever seen a classic physical heist movie knows the criminals often trip up not so much on entering the vault, but in the getaway—taking the gold, jewels, artwork, or cash to their hideout without getting caught or leaving a clue. If file access monitoring  software were in place, then very likely that would have been the case in this particular incident.

At the end of January, Dell’s SecureWorks Counter Threat Unit released its own reportbased mostly on its experience dealing with similar POS exploits and the little public information that’s available on this incident. Those more code-centric can skip ahead in the report to view a sketch of the RAM scraper software used for hoovering up credit card numbers. Scrapers are considered at the bottom of the APT food chain—they’re simple—but experts believe this variant was more advanced.

Yesterday’s article in The New York Times discusses how they cyber thieves broke in—via a “remote access granted through the retailer’s computerized heating and cooling software.” The Times article continues, “Target would not say whether its vendors were required to use two-factor authentication.” It certainly would have been much more difficult for the attackers to get in if they had had two-factor authentication in place—maybe we’ll hear more about that in the coming days.

Once in, they embedded their RAM scraper malware on to either individual POS machines or a central server into which the credit card transactions from many POS devices were being piped.

The scraper was able to elevate its access by using a default admin-level user name and password from another piece of software that hackers knew to be installed in the retailer’s environment.

It’s a good time now to point out that you should always change these defaults when installing vendor software. As we understand it, this POS attack would have been stopped if this basic step had been taken—failure two.

A  RAM scraper of this type likely worked by simply collecting a list of processes running on the POS machine or POS server and then using  a Windows system call—CreateToolhelp32Snapshot—to peek into the heap memory of each process. The scraper then did a text search looking for raw track information—the gang had technical details on this.  When it found a matching pattern, the malware encrypted the numbers and stored it for later transfer. At its core, though, this is still basic hack-craft.

So the thieves got into the vault.  The trick is now exiting without being detected. Ultimately, millions of credit card numbers were exfiltrated. Not surprisingly, there’s still uncertainty about how this was accomplished—perhaps HTTP POSTs or, as somesuggest, outbound DNS packets. In other words, a network security monitoring app looking for the usual suspects, say FTP, would have likely missed this.

However, to laterally move the credit card numbers from the scraper to the exfiltrator, the SecureWorks group believes the RAM scraper was periodically dumping the credit card numbers into a file and then remotely mounting the file’s folder to another server that the said exfiltrator had compromised.

Here is a third missed opportunity: if the retailer had file monitoring software to spot large increases in activity or other anomalous behavior—remember, the attackers were writing millions of credit card numbers into files—then the thieves might have been noticed very quickly.

So we’re seeing a familiar pattern here: An authentication failure (or two), a privilege escalation, and inadequate detective controls—lack of file system auditing and alerting. Also, we have to wonder, did the HVAC system really need to be on the same logical network as the POS systems?

This breach (and others like it) really could have been stopped or made much more difficult if any of these issues had been addressed. But don’t get too caught up in the preventive controls failures—we’re learning that it’s best to count on the bad guys getting in, or even prepare as if they’re already in.

A simple change in perspective from focusing on monitoring the attacks at the perimeter—effectively at the known entrance and exit doors—to watching what’s going on inside the building—watching the file metadata—would make all the difference, especially when there’s a back door you didn’t know about.

Christmas Comes Early For Online Retailers with a Boost in ECommerce Sales

Today’s IMRG-Capgemini eRetail Sales Indexshowed shoppers spent £10.1bn in November. Sales grew by 20% when compared to the same time last year, and 30% compared to October 2013, making the month one of the strongest the sector has seen for a decade.

multichannel retailers make a mark

Multichannel retailers reported annual growth of 23%, while for pureplays the figure stood at 16%. M-commerce transactions were up by 81% on last year. In the highest conversion rate recorded since 2009, the online retail sector hit 5.24%.

Retailers working with multichannel include Argos,  John Lewis and some supermarkets.


Thanks to http://webloyaltyuk.com/2013/12/17/november-is-the-strongest-month-for-a-decade-with-10-1bn-in-online-sales/


Rethinking bricks and mortar

Speaking at PSFK CONFERENCE 2013, Rachel Shechtman, founder of STORY, laid out the fundamentals of her retail concept and gave an update on recent themes. Shechtman describes STORY as a 2,000 square foot space that has the point of view of a magazine, reinvents itself entirely every four to eight weeks like a gallery, and sells products like a store. This multi media concept combines curation and editorial content with traditional brick and mortar retail.

I must say that the video is truly inspiring, especially when you look at all the empty retail spaces up and down the high street in every UK city. Local entrepreneurs could really look at this concept and partner with local colleges, bars, stores, online retailers to create branded pop-up stores that could be supported by local councils. This innovative strategy could help with creating more of a local feel to retail, add to this technology for taking payments etc and the cost of set-up could be dramatically reduced.

Local councils take a look and start to engage key stakeholders to deliver real community value.

The Real Way to Increase Conversion Rates

Great post from the guys at Tibco (BY )

In 2012, on the two biggest shopping days of the year, Black Friday and Cyber Monday,sales grew by 26% and 20% from the previous year. Don’t believe the apocalyptic news hype, retail is not dying, not even close. Retail is evolving to giving the customer exactly what they want, when they want, and how they want it. If customers don’t want to go to your store, they shouldn’t have to. If they want to shop on their phone or tablet, you need to fully support that.

This is exactly what sellers are struggling to do – make all customer touch points equally accessible, with a completely shared experience, so customers can be engaged at the moment of their purchasing decision.

Time is a Luxury, Methods are Not

Sellers have always tried to maximize customer spending through upselling and cross-selling. Methods which were successful in the past need to be replaced with newer techniques for today’s more aware, less patient customers.

Shopping on the internet is the best example. The probability of customers checking out the offers they receive via email is lower than when they see those offers in real time on the screen when they are shopping online.

Cross-Selling at the Right Time

Online merchants use upsell techniques like providing an option to replace the customer’s selection with a higher priced and better valued item in the basket. At the check-out, the customer will see cross-sell offers with discounts and messages like “people who bought this also bought something else.” According to industry experts, cross-selling to an existing customer only costs 10% of what it would cost to acquire a new one. That cost is further reduced and much likelier to succeed if the cross-sell activity is at the moment of purchasing decision.

What is as Important as When

How you know what to cross-sell to your customer at the point of sale? Providing the same bucket of offers to all your customers will get you a very low response rate. Rent-A-Center, Inc.offers goods under flexible rental-purchase agreements that generally result in ownership of the merchandise by the customer at the conclusion of the rental period. This replaced “after-the-fact” marketing with a real-time dynamic selling vision at the store level by incorporating a 360-degree view of its customers. RAC aggregated real-time data from various touch points of customer interaction and combined the new data with historical information on customer preferences and behavior to create a comprehensive understanding of their customers. This approach enabled Rent-A-Center to provide need based upsell or cross-sell offers to every single customer across the 3,000 plus stores.

We know who our customers are. What we lacked was insight into the products they prefer, the patterns of their rental behaviors, the peculiarities of their demographics, and the changes in their lives that would drive future rentals. The more we know about the customer, the better we’ll be at offering the right products at the right place at the right time, and that should translate into rental agreements with longer life.” 

– Senior director of Data Management for Rent-A-Center

A successful cross-seller ensures that the enterprise’s critical information on customers and products not only remains consistent and current, but can also be applied in real time across locations, lines of business, and interaction touch points.

For more information, here is a webinar on “How Operational Excellence Drives Supply Demand Chain Effectiveness.”

Comscore study on mobile retail shopping

Key findings –

– 4 in every 5 smartphone users – 85.9 million in total – accessed retail content on their device in July.
– Amazon Sites led as the top retailer with an audience of 49.6 million visitors, while multi-channel retailers including Apple (17.7 million visitors), Wal-Mart (16.3 million visitors), Target (10 million visitors) and Best Buy (7.2 million visitors) also attracted significant mobile audiences.
– Among both iPhone and Android users, Amazon ranked as the top retailer attaining a reach of 43 percent among iPhone users and 55 percent among Android users, with visitation to the Amazon Appstore largely accounting for the higher reach among Android users.
– Apple commanded a much stronger and expected 33.5 percent reach among iPhone owners compared to 7.3 percent among Android users.
– Females accounted for a higher share of time spent on retail destinations at 53.4 percent of minutes on desktop computers and an even greater share of retail minutes on smartphones at 56.1 percent
– 70.7 percent of smartphone retail visitors under the age of 45 compared to 61.1 percent of desktop users
– Among smartphone audiences accessing retail destinations, nearly 1 in every 3 had a household income of $100k or greater, with this income segment driving a comparable 31.2 percent of minutes spent on retail sites and apps.