Tactics, tips (and examples) to help e-commerce retailers grow and keep loyal customers.
Article Highlights
- As shoppers return to physical stores, e-commerce retailers face greater competition.
- Pure-play retailers face unique challenges and opportunities when it comes to driving customer loyalty.
- An online loyalty program can boost customer engagement, retention and cross-sell.
- A clear, consistent, personalized customer communication plan is essential for online- only retailers.
- Anything less than a stellar customer experience can be a deal breaker for online-only retailers.
The pandemic was a boon to pure-play retailers, as more people were driven to shop online than ever before. But as physical stores reopen, consumers are anxious to shop in person again, which only heightens the competition faced by online-only businesses. For pure-play retailers to survive and thrive, they need to focus on their strengths and opportunities, and follow best practice e-commerce loyalty strategies, like the ones we share below.
Online-only Retailers Face Unique Challenges and Opportunities
Retailers who operate exclusively in an e-commerce environment face different challenges and opportunities than bricks-and-mortar or multi-channel retailers. Lack of foot traffic and higher shipping costs can be drawbacks. But the two biggest challenges are that there are no face-to-face interactions and shoppers can’t physically see and try products in person. All of these challenges make it trickier for e-commerce retailers to build customer relationships, humanize their brand and maintain long-term loyalty.
Pure-play retailers do have advantages over bricks-and-mortar retailers. They can offer customers more choice and convenience. They don’t have to pay rent or utilities for store space, or salaries for an in-store staff. This provides an opportunity to dedicate more resources toward providing an exceptional online experience. But with so much competition for wallet share, how can these retailers not only stand out from the crowd but also ensure that their e-commerce loyalty strategies are as effective as in-person interactions? Let’s take a look.
How do you drive loyalty in e-commerce?
Most online-only retailers have different business strategies compared to their bricks-and-mortar counterparts. So, it only makes sense that their customer loyalty strategies should differ too. To keep shoppers engaged, online-only retailers need online loyalty strategies to ensure that the path to their products — and the customer experience — is better than their competition.
While the strategies, tips and examples below may benefit multi-channel retailers, they’re essential for online-only retailers. In fact, these three areas should be top priorities for e-commerce brands that want to stay ahead of the competition, drive sales and grow customer loyalty.
1: Create a compelling e-commerce loyalty program.
A strong e-commerce loyalty program has multiple benefits, from helping online-only retailers increase customer retention, to boosting cross-sell, up-sell and overall sales. A loyalty program can also be an effective tool to keep customers engaged with your brand and help you gather more information about them — information you can then use to tailor program benefits and messaging to build stronger relationships.
So, what are the factors of a successful e-commerce loyalty program? Consider these ideas and tactics for creating a best-in class online loyalty program or improving your current one.
- Create a microsite that serves as a hub for your loyalty program. It should be the place where customers can find everything they need to know about your program, with easy-to-find information like loyalty program benefits, how to earn and redeem rewards, and rules that are clear and easy to understand. Consider including an FAQ section dedicated to your loyalty program.
- Ensure that your loyalty program enrollment process is quick and easy, using a simple online registration form and sign-in with minimal data requests.
Example: Tarte Cosmetics has a dedicated page with simple instructions for joining their loyalty program.
- Design the reward experience to encourage multiple engagement touchpoints outside of transactions. For instance, offer points for friend referrals, reviews, surveys, photo uploads, contests or other engaging activities. Make it fun and motivating for your loyalty program members.
- Choose loyalty program incentives and perks that will resonate with your audience and align with your brand, like free shipping, discount codes or a VIP club within your loyalty program to offer more exclusivity. Go beyond points or monetary rewards by offering unique perks, special treatments, experiential rewards or surprise gifts. Consider value-added services like free gift wrapping, embossing or surprise gifts.
Example: Online pet retailer Chewy randomly surprises customers by sending them a painting of their pet.
2: Develop digital communications that are clear, consistent and personalized.
Bricks-and-mortar retailers can use face-to-face interactions to help build and maintain customer relationships. Online-only retailers don’t have that option. To build a more human connection, it’s essential for e-commerce retailers to personalize communication across all touchpoints — to engage customers and show them that you know them.
- Personalize content, communications and offers based on the data (and feedback) you collect from customers. Amazon does this well by making recommendations based on past purchases, pages browsed or re-order reminders. Use your data to create landing pages for standalone campaigns or retargeting campaigns based on abandoned carts.
Example: Subscription clothing retailer StitchFix uses this tactic by combining data scientists with human stylists to personalize each customer’s clothing and experience.
- Include value-added content on your website, mobile app, email and social channels, such as seasonal look-books, “how to wear” videos and gift guides. You can also use content to humanize your brand and let customers see the face behind your brand. For example, share the history of your brand, how your products are made and what your brand stands for.
- Leverage your brand’s social media channels to build a community and create a sense of belonging by encouraging and rewarding interactions like photo sharing and participating in contests. Get to know your customers better through surveys and questionnaires in your social feed. Encouraging reviews and sharing them through your social networks lets the customer know you care. Plus, reviews help other customers make decisions about your product since they can’t try it before they buy it.
- Remember that effective communication is a two-way street: Make it easy for shoppers to connect with you in a variety of ways, on their preferred channels and on various devices. Be available by email, phone, text, social and live chat. Shoppers have become accustomed to reaching out to brands (especially on social media channels) and expect a response. Respond promptly to tweets, reviews and comments. The easier you make it for customers to communicate with you, the better experience they’ll have with your brand.
- Leverage email. Collect email addresses through loyalty program enrollment, social media campaigns or on your website in exchange for a coupon, discount or exclusive content. You can also create an online preference center that allows customers to tell you when, how often and what content they’d like to receive from your brand. Use automated or “trigger” email campaigns to communicate at key milestones, like welcoming new loyalty program members, relaying rewards status or letting customers know about new products that fit their preferences. Make sure emails are mobile friendly.
Example: E-commerce retailer Tobi incentivizes shoppers to share their email with a 50% off coupon code.
3: Go above and beyond to provide an exceptional online customer experience.
All retailers say they aim to offer a great customer experience. But with online-only retailers, it’s do or die. So how can you improve customer loyalty online by optimizing the customer experience?
First and foremost, ensure seamless web and mobile interactions with quick load times and a simple checkout process. Just a one second delay can cause a 7% reduction in conversion rates.1 Further, if visitors can’t find what they’re looking for in 15 seconds, they’ll likely look for other shopping options that are easier to navigate.2
- Look at your website with fresh eyes. Are product information and CTA buttons easy to find? Is your contact information always visible? Check your site load times — if it’s not instantaneous, fix it.
- Offer a mobile app so your products are a tap away — and so you can send push notifications. Apps also tend to load faster than websites.
- Enhance the online shopper experience by including simple product search functions and filtering capabilities. Create helpful product descriptions, size guides, high quality images and video showing products in use to help customers feel like they’re in an actual store.
Example: Online cosmetic retailer Tarte lets shoppers virtually try on their products before they buy.
- Offer a variety of convenient payment and fulfillment options. Show shipping costs upfront for full transparency: 63% of shopping carts are abandoned due to surprise shipping costs.1
- Optimize the checkout process and make it as simple and straightforward as possible. Aim for one-click checkout. Make buttons easy to find. Give customers the option to keep shopping even at checkout. Ensure that you have easy return and exchange policies.
- Integrate your loyalty program with e-commerce by including points earned for the purchase, a reminder to redeem a reward or a callout to join your loyalty program.
- Let shoppers know how you’ll both use and protect their data; only ask for personal information that you need or will use.
- Use a live chat feature to help fill the sales associate role. Online shoppers who use live chat are 40% more likely to make online purchases.1
Building Customer Loyalty for Your E-commerce Brand
It can be challenging for pure-play retailers to build and grow customer loyalty. But if shoppers feel like your online store is dedicated to helping them find what they’re looking for — and provides a positive, friction-free experience — they’re more likely to return to your site again and again.
CCG’s retail marketing and customer loyalty experts have been helping online retailers improve customer loyalty, engagement and sales for decades. Our retail marketing services include loyalty program development, refinement and management, retention program development and our Statistical Loyalty Program Optimization™ to help identify the right benefits mix for every audience. Schedule a free consultation or call us at 303.986.3000 today to see how we can help you.
Sources
1 “The Ultimate Guide to Increasing E-Commerce Conversion Rate,” splitit.com, posted May 3, 2020, https://www.splitit.com/blog/the-ultimate-guide-to-increasing-e-commerce-conversion-rates/, accessed Dec. 15, 2021
2 “The 15 Second Rule: 3 Reasons Why Users Leave a Website,” David Zheng, crazyegg.com, posted May 14, 2020, https://www.crazyegg.com/blog/why-users-leave-a-website/, accessed Dec. 13, 2021
