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How To Drive Customer Loyalty In Online Retail With Personalisation

By Monetate

By Simon Farthing - Director of Strategy and Insights at Monetate

Online retail is a tough place to encourage customer loyalty. It’s easy for a shopper to flit over to different websites, and online there are thousands upon thousands of retailers vying for attention and custom.

Added to that, the current economic and political uncertainty might affect online retail in ways we can’t predict. This article will look at the who, what, and why of earning customer loyalty in online retail, in a climate that could dramatically impact shopper behaviour.

As we turn our backs on 2016 and plan for the year ahead, we wave goodbye to a significant period for UK online retail, and retail in general. The departure of British favourite, BHS, from the high street was a hot topic and one which many may, or may not, have seen coming.

We also welcomed the advent of exciting developments to technology, such as machine learning, which is sure to take hold of the industry in 2017. In June, Brexit was the word ringing in the ears of retailers both small and large. Questions remain unanswered around the impact on international trading, and also consumer confidence. 

Every single event that occurred in 2016 will have had an impact on online retail, and as a result the new year holds not only greater insecurities, but higher operating costs and an uncertainty surrounding economic growth. While the future may be unknown, there is one thing we can be sure of – driving revenue and maximising spend per customer is going to be at the forefront of any activity.

Gaining a customer focus

With more pressure than ever before to keep a lid on costs and improve return on investment, retailers need to ensure that every move they make is worth it. How do they do this? The answer is clear – customer focus. It may be a new year, but customers should still be the driving force behind any business decision.

While retailers are busy setting increased targets, customers still expect them to meet their demands. In 2017, delivering a more strategic customer experience, that ensures precious budget is being invested in the right areas, will be absolutely key.

Retailers need to build long-lasting relationships with customers who will spend more, return to purchase regularly and ultimately generate income. This year will be the year of loyalty. So here’s the who, the what, and the why to make sure you get it right.  

Who?

Customers may know who you are, but do you know them? As we enter into a particularly difficult time for the industry it’s more important than ever for retailers to get to know their customers. Online retail customer loyalty - it all starts with the basics. Think about it from their perspective. As news around online retail often crops up in mainstream media, consumers know that the high street is struggling, yet online shopping is thriving.

Black Friday 2016 was an extremely clear example with continued growth in online sales while the high street was left deserted. Increasingly, shoppers expect a far more personalised experience online that goes beyond simply making suggestions based on previous viewing or purchase behaviour.


Image Credit: SplitShire

Artificial intelligence and machine learning are hot topics as we enter into 2017. We’re beginning to see technology impact our everyday lives in new and exciting ways, and retailers need to keep up if they want to turn a profit. Already we are seeing this in store with services such as self-checkouts, and it’s no different for online platforms.

The extremely tech-savvy customers will want quick checkout pages, immediate payments, and faster delivery. It’s something we will only see more of as millennials and even younger generations demand this kind of engagement. 

What?

With new technology taking over, and a focus on customers becoming all the more important, retailers must implement a personalised approach. No matter the existing level of personalisation a retailer may be able to offer, creating a tailored offering will help to build a good relationship with customers. It could be as straightforward as rules-based segmentation, or as advanced as machine-driven experiences.

Whether it’s a simple banner offering free next day delivery, or suggestions based on location, each detail shows the customer you understand them as a shopper, and you want to offer them the best experience.

Often the act of being relevant is itself enough to increase customer satisfaction and as a result encourage greater loyalty. But to further build on this, retailers can use special offers, reward schemes or generate a unique discount code for a particular items or categories, so that you become their go-to retailer when making a purchase. 

One brand already demonstrating this is Waitrose. It used its bespoke ‘Turkey Targeting’ technique to reward loyal customers and convert sales. Using customer data collected from its myWaitrose members, the grocer was able to swiftly identify those who had previously purchased a turkey through Waitrose, but had yet to do so that Christmas.

Through personalisation, Waitrose then targeted one million shoppers with specific messaging to encourage them to buy their turkey that year. Not only was this a key chance to up-sell and maximise online sales, it also drove in-store visits, with a £5 off incentive when collecting from a local store.

This year, devising an integrated cross-channel approach to ensure a more seamless shopping experience should also be a priority. Customers are shopping on their mobiles more than ever due to bigger mobile screens and improved Wi-Fi connections.

Customers want to browse on-the-go, but make a purchase later on using a desktop, as it’s considered more reliable. In fact, Monetate data shows that one in five shoppers complete purchases over seven hours after first visiting a site. 

The shopper will expect to pick up where they left off. If they can’t, you risk losing a sale. Ultimately, retailers need to take advantage of new technology to make the process seamless. It must be quicker, easier, and more accurate. This will make the shopper feel valued. That means fewer returns and importantly, more money made.

Why?

There is huge pressure to perform in 2017, and more attention on where budget should be invested. When it comes to customer loyalty in online retail, every penny counts more than ever before and really drilling down to provide each customer with a one-to-one experience will be worth the initial spend.

To truly maximise on investment there should be a heavy focus on turning each customer from shopper to advocate, who will continue to make purchases over and over again.