The online retail marketplace has become more and more competitive in line with the explosive growth in sales volume in this channel. Online retailers need to work harder to achieve financial rewards as competition grows to attract shoppers.
The traditional response for online retailers competing for a finite number of shoppers is to make marketing ever louder and more intrusive with greater discounts. However the modern shopper is increasingly resistant to the overwhelming quantity of marketing messages they are bombarded with. I
this environment the rewards of increasing marketing spend are not clear cut.
Websites need to be smarter in securing and rewarding the loyalty of online shoppers in a marketplace where it becomes easier and easier to shop around for the best discounts. Clearly shoppers are attracted by bargains and discounts as much, if not more so, than increasing marketing activity.
Whats more, while marketing may attract a shopper in the short term, it will be discounts, good value and a rewarding shopping experience that wins loyalty in the long term.
Research by Verdict Consulting shows that it is not just discounts that drive traffic to websites, shoppers are directed by two main factors: search engines, and word of mouth. According to Verdict, search engines drive 48% of visits, and word of mouth follows with 42%. The problem with most search engines is they are partly driven by the popularity of websites &' the number of links to a website increases its search rankings making it more visible to the online shopper.
Therefore a site with low or dwindling popularity that dont offer rewards for shoppers, is less likely to be linked to, and less likely to get high search rankings. However, by focusing on word of mouth, we can directly improve shopper visits through increased visitors, and indirectly through links to the site from elsewhere.
How then can online retailers secure the financial rewards and boost their site via word of mouth? Simply by providing great value, discounts and a great shopper experience. The two most important factors which drive loyalty, and therefore word of mouth, are discounts and reward programmes. Shoppers who are thrilled with a site because of regular discounts, or who receive desirable rewards, are the most likely to tell their friends and family, to post links to the site in blogs and consumer websites they visit.
Another upside of reward programmes is they provide a wealth of information on shoppers. This information can be used to further improve discounts and rewards in areas relevant to shoppers, while saving money by reducing discounts and rewards which dont appeal.
Online Business Strategies
