The rapidly changing business conditions (and the birth of my daughter) have kept me away from this blog for a while, but I’m now refocusing and want to share what’s on my mind (and everyone else’s minds). Online retailing strategies for today’s economy.
The global economic crisis has driven consumer confidence to new lows. In January, the Consumer Confidence Index fell to 37.7 representing an all-time low since the index's inception in 1967. This has had a huge impact on consumer behavior and spending patterns. Most notably shoppers are turning to the web.
Needless to say, today’s shoppers are price conscious. According to a comscore report, 76% of shoppers said that the web would be either somewhat or a lot more important as a tool for finding pricing info in this challenging period. A similar Q4 Forrester study revealed that 33% of shoppers will do more research online before purchasing and 17% will do more shopping online rather than offline in 2009 .
The growing importance of the Internet means that every retailer who relies on the Internet for sales will face more competition online. Two-thirds of consumers are postponing purchases or buying fewer items overall… so when they are ready to buy, it’s critical to get them to visit and buy on your site.
In this multi part series I will look at core strategies and best practices that are driving real results in today’s economy. We’ll start by examining online marketing strategies and tactics.
- Marketing is a science. First look at your marketing and merchandising strategy. Does your organization treat it as a measurable science or a loose process? If you don’t already use analytics, it’s time to explore analytics packages and apply scientific rigor to every measurable campaign, promotion, process, and marketing element. Our customers have seen huge impacts from subtle changes such as colors, button placements, and verbiage. If you have a few ideas, use multivariate testing and marketing experimentation technologies to find the best option.
- Reevaluate the 4ps. As consumer attitudes change in lieu of their economic situation, determine if you’re offering the right values, products, and services for today’s market.
- Pricing. This is obvious, but examine your pricing strategies and integrate with shopping engines. According to Magid Abraham, ComScore’s founder and CEO, consumers are using shopping engines and the web as their primary comparison shopping tools. Abraham shared data from an April survey of 1,000 U.S. comScore panelists, and found that some 76% said that the Web would be either "somewhat" or "a lot" more important as a tool for finding pricing info in the coming months. Ensure that your pricing is still relevant and consider creative pricing/packaging strategies such as bundles (especially those with high margin accessories) or low cost leaders.
- Refocus on Segmentation. First focus on your most loyal customers and segments (if the 80-20 rule impacts your business, you need to be very targeted with your marketing efforts). At the same time, create targeted offers and messages for those segments that may take some extra prodding.
- Is your site social? The majority of online consumers rely on consumer driven content such as ratings, reviews, and community information to guide their purchase decisions. In fact, the Trust in Advertising survey of 26,000+ found that Consumer Recommendations are the most credible form of advertising. [More stats here]. If you don’t already use consumer content, now is the time to consider it. If you are using consumer driven content, now is the time to optimize it. Can your shoppers browse by top ranked products? Are you leveraging customer quotes in your copy? Have you incorporated rankings into search
- Content is [still] king. Create compelling and attractive content that engages consumers to interactive with your site. Don’t simply rely on manufacturer copy: spice it up, add video and user uploaded pictures. Provide adequate supporting information to help educate the consumer and convert the sale.
- Coupons. Digital coupons are becoming more popular with price conscious consumers. According to comScore Media Metrix, traffic to coupon sites and saving sites increased 33 percent in 2008 from the previous year. The ecoupon category grew 11 percent to 24.5 million visitors during the month, as each of the top five sites in the category experienced double-digit gains.
In my next posting, we’ll look at market expansion and revenue diversification strategies that wadd economic resilience and growth to your business