What can be done to make your ecommerce business more profitable in the year ahead? ORESA looks a three essential actions to take.
While online sales have been a relatively modest percentage of the total turnovers of most retailers, the fact that many of these ecommerce transactions have been barely profitable, if at all, has been largely overlooked.
This lack of profitability will come much more into focus as online sales continue to take an ever greater slice of the total revenues for most merchants.
Here are three steps to help you improve ecommerce.
1. Segment based on behaviour
To address this issue, retailers should look to segment their customer base in order to help them determine the most profitable delivery options that should be presented to different groups.
The most valuable shoppers should be given all the delivery options – for free – whereas the likes of the loss-leading ‘serial returners’ should be offered only limited choices and be charged for some of these. This group should be actively encouraged to take the more efficient Click & Collect option.
2. Improve data and insights
Such segmentation requires data analytics and there is no doubt that 2017 will see further recognition by retailers that they have to get a greater grasp on their data and the insights that it can deliver. It is increasingly noticeable that smaller retailers are moving ahead of their larger rivals through a greater willingness to use cloud-based solutions.
These agile/flexible solutions enable them to suck in data from across channels, thereby giving them a single view of their customers (and inventory), with which they can undertake the analysis before surfacing the insight on any device including mobiles and tablets.
3. Make initiatives part of your digital transformation
For established retailers bringing in changes such as implementing cloud-based solutions and handling Click & Collect as part of a multi-channel proposition is causing great disruption.
What is needed in 2017 is the development by retailers of digital transformation strategies. What should differentiate these from former digital-related initiatives is that they should encompass all parts of a retailers’ business, and this should include when and where to hire the right people to take this on, if there isn’t anyone in place to lead the charge such as a Chief Customer Officer or Chief Digital Officer.
To date far too many digital initiatives have been bolted-on to the existing operational and IT infrastructures – with poor integrations. With the greater volumes that retailers are now handling across channels – much of it mobile-driven – and the increased complexity of their customers’ journeys today there needs to be a rethink.
They need to determine how they undertake an all-encompassing digital transformation that touches all parts of their business and ensures that they have a customer-centric operation that will deliver on the increased demands of shoppers.
Contact the team today to find out how we can help your ecommerce grow.