Retail

E-commerce Growth Stimulates Demand for Customer Loyalty

Photo by Scott Graham on Unsplash

Comarch integration with Shopify & Magento enables quick customer loyalty implementation

The percentage of total retail sales is shifting slowly towards the digital realm. Global E-commerce sales rose from 15 percent in 2019 to 21 percent in 2022. Over the long term, the E-commerce market is predicted to increase from $3.3 trillion today to $5.4 trillion in 2026. According to BuiltWith, 25.5 percent of the top 1 million live websites today are e-commerce websites.

According to the PwC Customer Loyalty Survey 2022, volatility in consumer behavior is at an all-time high. The research found that 30% of customers today say they’re increasingly likely to try a new brand. Younger age groups tend to be increasingly brand agnostic.

Customer experience is critical to influencing customer behavior. 55 percent of those surveyed by PwC said they would stop buying from a company that they otherwise liked after several bad experiences. 8 percent said it would take only one bad experience to leave the brand.

The price of losing customers is on the rise. CommerceNext’s 2022 report, shared that approximately 61 percent of direct-to-consumer companies called increasing customer acquisition costs their greatest challenge to achieving 2022 revenue goals.

Customer Loyalty & E-commerce

What’s the role of customer loyalty to combat these headwinds in E-commerce? To meet the needs of growth and offset rising customer acquisition costs, E-retail priorities are shifting from pure acquisition plays to customer growth and retention. For that reason, customer loyalty strategies are becoming more important and the opportunity for the growth of loyalty management systems (LMS) will continue to increase over the next few years.

E-commerce retailers have special advantages over their physical retail cousins. But they also have vulnerabilities that can be detrimental to business if not properly managed.

The ability to collect data about customers, even prospective customers, is one of the strongest assets of an E-retailer. Using multiple techniques, e-retailers can scoop up email addresses and understand product interest and preference based on browsing patterns. On the other side of the equation, prospective customers can easily ghost the retailer, visiting, shopping, querying – doing everything except complete a purchase – and then disappearing.

The result? The switching cost for customers to compare prices of similar products and jump between suppliers are so low that E-retailers should be investing in Customer Loyalty strategies to preserve customer value. The ability to manage data to personalize messages and offers must be a core capability of a loyalty provider partner. McKinsey found that 71 percent of consumers expect personalized interactions, and 76 percent get frustrated when they don’t get them. It is vital to build targeted recommendations and offers based on knowledge about the customer, all of which vectors towards increasing the attractiveness of an E-commerce brand.

Creating a more structured approach to retaining customer interest and converting browsing to purchase is one goal of a customer loyalty strategy and can yield triple digit ROI on loyalty investment. A well-conceived loyalty strategy should present the value proposition to retain that customer.

Here’s one example of the challenges E-retailers face that can be addressed through a customer engagement and loyalty strategy. The average shopping cart abandonment rate for all ecommerce retailers is just above 68 percent. The Baymard Institute provides some of the most useful stats on this topic and while the numbers acknowledge that a large portion of cart abandonments are natural consequence of how people browse, i.e. window shopping, comparing prices, saving items for later, exploring gift options, etc., there are answers available through smart marketing strategy.

Improving cart abandonment levels are just one indicator of how important applying customer engagement, loyalty and retention techniques to e-commerce is today. Tools that guide the customer towards purchase with messaging like “you may also like” or “you may need in the near future” can help build a relationship with the customer. Bolstering strategy with AI / ML tools is the path to rapidly processing data in real time and being able to make purchase predictions and propose the next best offer.

But don’t equate investing in customer loyalty with launching a points program. That is an option, but first E-retailers should be personalizing the experience for their customers, matching offers and special incentives that will convert browsers to buyers.

How to implement Loyalty effectively in E-Commerce

Your loyalty strategy should focus first on objectives, how to create more repeat visits and higher customer satisfaction. This is especially important today, when good customer feedback, “virals” on social media, and online recommendations significantly impact future sales and profits.

Encouraging people to subscribe to newsletters and engage with helpful content can create stronger engagement and methods of redemption – the most engaging moment of any loyalty experience – should be carefully studied and customized to delight customers in the moment but also drive return store visits and build value. Value can be enhanced with non-points offers including faster delivery, free shipping, and extended returns.

Comarch has developed an integration between its loyalty management system and two e-commerce platforms (Shopify and Magento) which collectively represent about 20% of the global market share for E-commerce platforms. Shopify is a software-as-a-service (SaaS) platform that helps anyone start, grow, and manage an online store. It was started in 2006 by Tobias Lütke, Daniel Weinand, and Scott Lake in Ottawa as they attempted to open an online store for snowboarding equipment. Magento officially started development in early 2007. Seven months later, on August 31, 2007, the first public beta version was released. The capability will be available in Q1 2023.

Find out how to tailor the right loyalty solution for your business

using Comarch’s new automated demo system here.

Comarch has created a “commerce connector” representing a holistic approach to customer loyalty for any E-retailer. Integration connectors are out-of-box components offered by most major integration platforms that allow you to easily connect to and integrate with apps and data sources. They bring the entire business ecosystem together. Together with integration, they solve complex workflows and automate critical processes. The Comarch E-commerce connector has the advantage of being ready to use, with quick time-to-market. It will be continually updated to ensure compatibility with the two leading E-commerce engines and requires a straightforward installation without complicated integration and IT work. E-retailers get loyalty and web analytics backed up with AI / ML recommendations in one package.

The importance of Customer Loyalty will continue to be grow for online retailers. Comarch’s loyalty strategy and consulting experts have proven success working with retail brands to engage and retain customers throughout the entire customer journey.

How to implement Loyalty effectively in E-Commerce

Your loyalty strategy should focus first on objectives, how to create more repeat visits and higher customer satisfaction. This is especially important today, when good customer feedback, “virals” on social media, and online recommendations significantly impact future sales and profits.

Encouraging people to subscribe to newsletters and engage with helpful content can create stronger engagement and methods of redemption – the most engaging moment of any loyalty experience – should be carefully studied and customized to delight customers in the moment but also drive return store visits and build value. Value can be enhanced with non-points offers including faster delivery, free shipping, and extended returns.

Comarch has developed an integration between its loyalty management system and two e-commerce platforms (Shopify and Magento) which collectively represent about 20% of the global market share for E-commerce platforms. Shopify is a software-as-a-service (SaaS) platform that helps anyone start, grow, and manage an online store. It was started in 2006 by Tobias Lütke, Daniel Weinand, and Scott Lake in Ottawa as they attempted to open an online store for snowboarding equipment. Magento officially started development in early 2007. Seven months later, on August 31, 2007, the first public beta version was released. The capability will be available in Q1 2023.

Comarch has created a “commerce connector” representing a holistic approach to customer loyalty for any E-retailer. Integration connectors are out-of-box components offered by most major integration platforms that allow you to easily connect to and integrate with apps and data sources. They bring the entire business ecosystem together. Together with integration, they solve complex workflows and automate critical processes. The Comarch E-commerce connector has the advantage of being ready to use, with quick time-to-market. It will be continually updated to ensure compatibility with the two leading E-commerce engines and requires a straightforward installation without complicated integration and IT work. E-retailers get loyalty and web analytics backed up with AI / ML recommendations in one package.

The importance of Customer Loyalty will continue to be grow for online retailers. Comarch’s loyalty strategy and consulting experts have proven success working with retail brands to engage and retain customers throughout the entire customer journey.

Find out if the Comarch Loyalty Management System is right for you, here.

E-commerce Growth Stimulates Demand for Customer Loyalty
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