COVID-19 has accelerated the need for digital transformation in the retail industry and the retailers who can best prepare for the new normal will be the ones that thrive. Even before COVID-19, online retail had increasingly dominated the sector.
But in March 2020, when the world went on lockdown, consumers had no choice but to turn to online retail for everything from groceries to fashion, and as a result, e-commerce thrived.
However, with increased online traffic comes a greater risk for performance issues, which can lead to poor customer experiences and huge losses in revenue.
Even though retailers are bleeding money right now, economists predict a quick bounce-back after the pandemic is over. And, in order to persevere in this new reality, there are proactive steps retailers will need to take now to see long-term success.
Prioritize your customers
The old adage still applies: acquiring a new customer can cost five times more than retaining an existing customer. As such, it’s crucial that retailers are prioritizing their existing customer base as doing so will help them see long-term profits.
Retailers should be open and transparent about how they are operating in this new normal. For example, it is important to be realistic with customers in terms of delivery time frames and consider offering enhanced services like subscriptions to ensure timely delivery of items.
After all, hasn’t getting a delivery been a highlight during the pandemic? Retailers should also consider offering new options like curbside pickup for customers who don’t want to wait for delivery.
The success rate of selling to a customer you already have is 60-70%, while the success rate of selling to a new customer is 5-20%. In fact, increasing customer retention by just 5% can increase profits from 25-95%. As such, while increasing loyalty during this time is key, employing simple customer acquisition strategies can only help boost the bottom line.
Retailers should look toward SEO to provide long-term ROI. SEO is imperative in making sure that companies rank highly for the audiences they want to engage with and attract. Of course, a strong SEO approach takes time to develop and improve but now may just be the ideal time to fully invest in a strong strategy that drives increased leads and sales.
Optimize the online experience
For every e-commerce site, there is always room for improvement and now is the best time to get things right.
As e-commerce sites are constantly being updated with new products, it is also prone to human error or glitches. And everyone is susceptible; Walmart’s website experienced a massive price glitch that affected hundreds of pricey items that were suddenly marked down to anywhere from $8 to $30.
And even the online giant Amazon had a similar issue caused by an error in the software used by third-party e-tailers, that saw hundreds of items go on sale for just one penny. It’s critical to utilize online monitoring software to catch these glitches and fix them in real-time. Another culprit is the online checkout process.
When online shopping, 60% to 70% of people abandon their carts before completing a transaction. Therefore, retailers should examine whether the online checkout process provides a seamless experience for customers and is fast and straightforward.
A Forrester Research study found that 23% of users will exit a check out if they’re forced to register. It’s a simple thing, but it has the potential to drive customers away and decrease conversion rates.
Customers also have little patience when it comes to site and page-loading speeds. Especially as retailers are all primarily e-commerce retailers now, employing caching technology can reduce the risk of website outages while enhancing performance – even amid traffic surges.
With powerful caching technology, e-commerce sites can deliver lightning-fast web experiences for customers that can help strengthen content delivery to enhance the customer experience, create greater efficiencies, and stay competitive. Accelerated content delivery networks (CDNs), further enable retailers to deliver high-quality experiences to customers while reducing data transfer expenditure.
Today, there are numerous plug-and-play options for CDNs available from tech giants but retailers may want to take stock of how building a custom CDN can provide greater control and allow them to easily scale to reach new markets. While this option is more time-intensive and expensive upfront, it pays dividends in the long run.
Now more than ever, retailers should be wary of panicking and offering tons of discounts that eliminate profit margins.
The holidays are just a few months away and we’ll likely see a nice spike in online traffic. As demand picks up, supply chains may take a bit longer to recover. Therefore, retailers should consider holding back some inventory in order to meet increased demand when customers come back in hoards.
When it comes to loyalty, customers will easily jump to another retailer if items are scarce. In fact, in a consumer survey about COVID-19 buying habits, 44% of U.S. shoppers said they would consider purchasing from a brand they are unfamiliar with if products are out of stock at their preferred vendor.
Across the board, industries are struggling to stay afloat. But by executing these key tactics, retailers can weather the storm as they prepare for this new normal.
James Whyte is the Vice President of Sales and General Manager at Varnish Software. James started at Varnish as a territory manager in Scandinavia before moving to the U.S. where he is responsible for developing and managing the company’s growth strategy throughout North America, including hiring and new customer acquisition.
He recently led the company’s expansion into the new Los Angeles office to tap into the mid-market and bring the company’s technology closer to its U.S. enterprise customers to better help them scale to match consumer demand peaks and protect their critical infrastructure.