Marketers weave web of loyalty
Marketers weave web of loyalty
Many multichannel merchants are investing in the e-commerce customer experience as a way to drive results even as economic pressures force them to cutback in other areas. These retailers are also delving further into the connection between online customer experience and customer loyalty.
For multichannel apparel merchant Urban Outfitters, enhancing the online customer experience is a core strategy. "There are a number of different goals we have in mind when it comes to enhancing the online user experience," says Keary McNew, manager of technical services and IT operations at the company. Conversion rates are one important goal, and increasing loyalty among Urban Outfitters' fickle young and hip generation is also critical.
"Poorer performing sites do not have as high a conversion rate," McNew says. "If you have a favorable experience, we see a consistency of users coming back and buying more."
The online channel is outperforming other retail channels. Overall retail sales in May were down 10.8% compared to a year ago, according to the US Census Bureau, while online sales during the same month dropped 4%, according to ComScore.
Amid reports of slashed direct mail budgets and store closings, e-commerce investment remains strong. For example, Walmart.com recently implemented personalized product recommendations from RichRelevance, and teen fashion retailer Charlotte Russe introduced DecisionStep's new ShopTogether interactive shopping application, which connects two or more friends for a joint shopping session on the Charlotte Russe Web site.
These investments tend to pay off, experts note.
"While most areas are being cut, and online efforts are not immune, retailers see the online experience as an investment which can increase sales through better conversion rates and decrease costly customer service calls," says Bruce Temkin, VP and principal analyst at Forrester Research.
In general, retailers understand that a good user experience will enhance loyalty, says Temkin. However, "companies are just starting to really explore how to merge channel behavior with loyalty programs." He said one major retailer is considering giving good customers a coupon for the e-commerce Web site after an in-store purchase is made as a way to stimulate multi-channel behavior.
For now, most retailers are focused on ensuring that customers can find what they are looking for without encountering problems. A smooth shopping experience that keeps them coming back and encourages them to recommend the site to others is the goal. These efforts run the gamut from site optimization to bells and whistles such as product recommendations, video product descriptions, live chat and customer reviews.
There's a high degree of correlation between good customer experiences and consumers' willingness to make subsequent purchases from a company, according to the recent Forrester Research report The State of Customer Experience, 2009.
"One of the key areas for improving online customer experience is relooking at product landing pages," says Temkin. "Often, consumers come to a product page through a search engine, so the product page becomes a default landing page. This requires many firms to rethink content and layout of pages." And as companies put more content and functionality on their Web sites, it has become harder for customers to find what they are looking for.
In Urban Outfitters' case, the multichannel merchant was already facing performance issues with its Web sites - UrbanOutfitters.com, Anthropologie.com and FreePeople.com - even as it prepared to launch redesigned sites on a new platform last year.
Using Akamai Dynamic Site Accelerator, which optimizes the performance of Web sites by pulling and caching fresh content, Urban Outfitters was able to reduce all transaction response times to less than one second, decrease bandwidth utilization by 30% and reduce site abandonment during a period when direct-to-consumer sales increased 35% and site traffic increased 50%.
As a result, Urban Outfitters is able to focus on other ways to improve the customer experience and generate loyalty - such as adding customer reviews to the Free People Web site — without having to worry about performance issues. "Repeat sales are high on the list of our Web directors' goals," McNew points out.
"Despite the economy, most big retailers are planning to increase their online spend rather cut it," says Margaret Rivera, marketing programs manager at Akamai. They recognize that the online customer experience plays a big role in both customer satisfaction and sales, she explains.
"Retailers are looking into what are the barriers to buying online" and trying to address these, she continues. "Whether it's a new customer or an existing one, the goal is to make it easy for people to shop, transact and keep coming back to the site." The issue is similar to what retailers face with their offline stores. If a shopper has to wait online or can't find what they're looking for in a bricks-and-mortar store, they're not going to come back or recommend the store to someone else, Rivera says.
Live chat is also being used to improve the customer experience online. In a recent survey by live chat software company BoldChat. Sixty-two percent said they are more likely to buy again from the site because of the live chat interaction. Value-priced cosmetics brand E.L.F. - which stands for eyes, lips, face - recently installed BoldChat's live chat solution on its Web site to address its customer service needs.
"Being a small company and having to cater to a lot of customers at once, BoldChat allows customer service reps to be interacting with six or seven customers at once," says Joey Shamah, CEO at E.L.F. The brand is available at Target, Kmart and other retailers, but the e-commerce site is its biggest channel of distribution, Shamah adds.
In just a month with BoldChat, the number of customer service phone calls are down. Shamah is optimistic the service will improve customer loyalty.
"I would think that having less concerns as a customer by having your questions answered in real-time would lead to future purchases," he says.
For Urban Outfitters, improving the online customer experience was also about ensuring a positive brand experience for its youthful audience.
"We're marketing to a younger and hipper generation who expect pages to fly off their browser as quickly as they can click," says McNew. "The last thing we want is a teenager who wants a pair of jeans to have to wait five seconds for the product page details to come up."