Author: Miya Knights
In the ninth Eagle Eye blog serialising our CEO, Tim Mason’s book,
Omnichannel Retail: How to Build Winning Stores in a Digital World, we explore e-commerce and how it is affecting customer loyalty.
As a guide to establishing and maintain meaningful customer engagement using digital connections, it may come as surprise that we leave the topic of growing an online sales channel to almost the last chapter.
Tim does this deliberately. Not that ecommerce isn’t important, but rather because it is more important to urgently address the implications of online shopping for a physical retail business living in a digital world.
We looked at the
‘digital imperative’ to connect with customers that any consumer-facing brick and mortar business must address. That’s not just selling online but joining this up to the store offer to foster loyalty.
To understand how to add one more product or drive another visit, Tim shares his early career
‘analogue learnings’ about customer loyalty from his days of launching the Tesco Clubcard loyalty scheme.
Moving customer loyalty offline to online
Tesco taught Tim that
loyalty is far from dead. In fact, the advent of digital has increased the ways businesses can attract, interact with and retain customers. But maximising this capability lags the opportunity in stores.
E-commerce sales benefit from having a customer ID built in – that digital connection is taken for granted in a way that just isn’t yet pervasive enough in physical sales spaces. It’s no surprise the Amazons are winning.
When it comes to selling to customers consistently using digital, most stores, showrooms, restaurants, etc. are a
‘digital black hole’. They need
digital augmentation to be locatable and shoppable, using
mobile makeovers.
At the same time, having also launched the precursor to Tesco.com and now working with digital businesses, Tim learned it also pays to follow the customer. So, of course, we need to examine the impact of e-commerce.
“I remember realising the value of online shopping when Tesco Direct and Clubcard feedback were combined. It showed the degree to which the new channel brought incremental, rather than substitutional, business to Tesco” (Mason, T., Knights, M. Omnichannel Retail, p159, Kogan Page.)
Building consistent customer connections
Establishing a data-driven and digitally enabled customer-facing proposition should extend consistently across all sales channels. But ecommerce operations have some distinct requirements for those that also run stores.
E-commerce may not be as profitable as physical stores because of customer fulfilment and delivery costs. But the growing popularity of click-and-collect sales means they will account for
13.9% of UK online sales by 2022.
Although our book focuses on redressing the imbalance between businesses’ ability to connect with customers digitally as easily in stores as they can online, Chapter 9 recognises the key role ecommerce plays.
If customers are increasingly blending online and physical sales channels throughout their shopping journeys, then it is worth understanding why. Then it’s possible to respond in ways that foster loyalty across channels.
”…Understanding what really matters to customers, in terms of purchase intent, is just as crucial a capability to master online as it is in a store.” (Mason, T., Knights, M. Omnichannel Retail, p167, Kogan Page.)
Exploiting digital ecommerce advantages
The advantage that e-commerce provides over the store is the ability to track how customers find your business, what they do when they visit your online store, and even where they might go afterwards.
This kind of tracking of what a customer clicks on while browsing can be used as a roadmap of their online shopping activity. Loyalty and promotions can often act in the same way offline as a ‘cookie’ does online.
But, just as instore, selling online must be intuitive. It needs to provide customers with the easiest way to quickly find, compare and buy products. Recommendations and reviews are established e-commerce features.
Promotions, loyalty and rapid delivery also have vital roles to play. Amazon’s Prime subscription services act as a proxy for a loyalty scheme with the benefit of delivering
rich customer data and recurring revenue.
Think about designing the customer experience for the ecommerce channel. Optimise content and delivery for mobile and integrate this online view of your business with its offline presence using
performance marketing.
E-commerce is becoming more relevant in the physical store as when customers shop a retailer or brand purely online. It’s the new media and content explored in Chapter 10 that is driving this omnichannel convergence.