[Guest post by Daria Samokish]
Every marketing or pricing manager has at least once seriously thought about online retail’s future. Over the last few years, digital experience has made an online store’s competitiveness highly dependent on a customer rather enterprise itself. Everybody is welcome to use a mobile app for barcode scanning, directly compare prices online, search the ratings and reviews on desired products or services. As a consequence, omnichannel access to information continuously affects an online store’s reputation, hence the customer’s perception and behavior at an amazing pace.
Alexandr Galkin, Co-Founder and CEO of Competera
“Customers are no longer receptive to the traditional lock-in procedure. It’s time to cover multiple sources with pertinent customer information to deliver a more personalized and memorable experience.”
Since customer behavior and preferences are constantly shifting, e-commerce retail should find new approaches to provide unique shopping experiences, communications and offers to the consumers. We’ve collected the most recent tricks of consumers and solution tips for forward-looking customer experience management. Let’s see how online retail can profit from a customer’s hunger for digital engagement.
Customer’s Trick #1: Change the Engagement Game
E-consumers know by heart the standard package of interaction engagement. The traditional offer of the same products, coupons and discounts is no longer a reason for long-term customer loyalty to an online store.
Instead of the cloying “4 P’s of marketing” (Product, Price, Promotion and Place), customers expect to see Me2B principles in progress: to feel themselves as architects of their own decisions with the help of fast and beneficial interactions with the supplier of missing goods to help matters. In other words, consumers stand against “to be a target” and “to choose”, but want to be an abettor of perfection and cooperate with and for. Despite the fact that consumers assert a right to dictate where, when and how to engage with stores by researching products before purchase.
The latest PWC research of online retail and consumers transformations justifies that by 2020 “digital natives – who grew up steeped in technology and follow their favorite brands on social media – will constitute more than half of all shoppers, 9 and customers of the future are more than just customers – they will morph into content creators, marketers, and brand ambassadors”.
Manager’s Tip #1: Boost Engagement and Loyalty as Adaptive Retail
Econsultancy has investigated the issue of the most important criteria of an actual “digital-native” culture. 58% of leading responses say that a key to success is to understand customer demands and propose a relevant and comforting experience through a customer-centric strategy. Great customer service is obligatory, but the future of customer-centricity is in an offer of a great experience from the awareness stage through the post-purchase and again. Hence, in order to drive repeat business, customer loyalty and profits, an online store needs to accompany a customer through personalized interactions at every stage of the shopping cycle.
– Emails featuring new products and preferred brands
– Mobile push notifications focused on preferred products
– Product recommendations based on
– Sales associates using data to drive cross-sells and up-sells at the point of sale
– Last-minute discounts for product bundles or add-ons
– Email requests to complete product ratings and reviews
– Follow-up blogs focused on how to use specific products
Customer’s Trick #2: Leverage pricing strategy
An anticipation of customers’ behavior transformation is a complicated task, but it is not difficult to find that the emergence of new applications and new technological devices expand the horizons of customer experience. Every regular customer of your online store surely is a guest of at least yet one other online retailer. The loyalty based on the “favorite online store” is no longer operational because of the actual customer rule to compare and select an optimal price for a product. Today, the consumer being in a store or somewhere else is able to take a photo of a targeted product and find it or its analogs in several online stores at once. Looking at the screen of the smartphone, a consumer sees the prices and choose the most appropriate one immediately.
PWC’s research shows, that 60% of “online shoppers choose a favorite retailer because the price is right”. It is a good point for online retail margin because “optimal” doesn’t mean the cheapest.
What is an optimal price? It is an amount residing in the customer’s psychological perceptions, between inappropriately cheap and inappropriately expensive. Hence a pricing manager needs to hit the space between “the constraints” playing two games in parallel: winning the high margin at the competitive market and gaining the customer’s loyalty through the current price perception.
Manager’s Tip #2: Technologize Pricing To Deliver Digital Customer Experience 2.0
Online retail pricing is moving to a format that has been offered by Facebook Ads Platform based on achieving different marketing goals under different demands of advertisers. The future of communication between the e-retailer and e-consumer through a pricing channel looks like an interface, where customers should select all the configurations of the final good which they expect to receive, while the online retailer sets the KPIs are performed, and the price is a huge part of such a transaction process. Today, e-commerce retail moves towards the future – aspires to understand a critical price zone for each SKU or for product groups and varies the price within the limits of the zone. Buying a refrigerator for $1750, a customer is ready to overpay 0.5 – 1.2%, simply put it is $80 – $100. Does it work with a cellphone for $115? It is surely no. It is a simple example, but what if you need to understand a product category with 1000 units?
An appropriate pricing spectrum from a customer’s perspective anyhow is built on the main competitor price, which affects your online store pricing repute. To be ready for a customer’s price comparisons, a pricing manager needs to
- measure the influence of competitor brands on the sales of product groups in their own online store;
- find the critical level of prices at which the shopper сalls off the purchase;
- hold in the most “optimal”, but profitable price for the online store.
Price Intelligence, a tool of competitive price analysis, is uniquely suited for this kind of problem. Inspired by smart pricing effects, price optimization software produces a data-solution based on competitors, price, stock availability, and promotions for the purpose of e-tailers delivering new digital customer experience.
The technological degree of freedom allows customers to gain a better shopping experience, but forward-looking customer experience management can derive the benefit for online store margin being adaptive to the Age of Customers and always making technical steps ahead of customers.