Survival Guide

Set out to Conquer 2017

THE ULTIMATE ECOMMERCE

Q1

–20

2 72014–10 2014–11 2014–1 2015–01 2015–02 2015–03 2015–04 2015–05 2015–06 2015–0 2015–08 2015–09 2015–10

0

20

40

60%

Dif

fere

nce

fro

m m

on

thly

ave

rag

e

Date

January - 40% drop in revenue from the dizzying heights of the festive season.

February - revenue sits at 20% less than the yearly average.

The Q1 Revenue Drop…

Here’s to turning

adversity into opportunity!

Problem #1

High level of returns due to the gift driven sales of December.

Reducing returns by 1% increases net profit by 1%.

As little as 7% of products could be driving up to 50% of

returns.

£415,000 - the amount which M&Co saved after identifying the

top 10% of frequently returned items and removing them from

active promotion.

Combat high returns by identifying troublesome products in advance.

THE SOLUTION

Problem #2

Excess of old stock that is no longer of priority to shoppers.

An alternative to longer January sales.

Create a sense of excitement and instill a sense of urgency.

Have been shown to generate a 35% lift in transaction rates.

You can choose to outsource by going through through third-

party flash sale companies or host them within your store.

Well-advertised flash sales that motivate shoppers to move quickly

THE SOLUTION

Caliroots - Have their flash sale as the central focus of their site,

directing all attention towards the imminent reductions.

The length of your sales • 3 hour flash sales have been shown to generate the best

transaction-to-click rates — 59% higher than other sale lengths.

Effective communication • Post a countdown to your social pages and emailing your

customers.

• Email represents 18% of the referrals to flash sales websites.

• You can also inform people that come to your site with a pop-up.

Things to consider

Orelia - use a pop-up to inform people of their daily one day advent

sales.

Timing • Flash sales are more effective if they are infrequent

• Transaction rates have been found to be 23% higher for evening

flash sales, with the amount of revenue per email 30% higher.

Preparation • If your flash sales is successful it will mean a spike in traffic to your

store make sure to load test to make sure your site is up to it.

Things to consider

Problem #3

Lower margins caused by discounting stock

Driving increases in AOV through automated, personalized recommendations including

up-selling, cross-selling and browsing history related.

THE SOLUTION

Personalized recommendations • Recommendations tailored to

an individual’s likes and dislikes

(as documented by their

behavior on your site) are more

appealing

• 54% of retailers that use

automated product

recommendations increased

their average order value year

on year.

Boomerang use 1:1 product recommendations on their homepage in the form of a “recommended for you” section, as well as curating best selling items in the “most popular lists”

Upsell • Upselling involves persuading a

shopper to spend a little more than

they had planned, and, according to

Econsultancy, can drive over 4% of

revenue.

• Suggest that they buy the same

model but with higher specs, costing

a little bit more.

Top Office successfully uses a “Similiar Products”

recommendation section to show more expensive alternative items.

Cross-sell • Boosts the average order value

of a customer by

recommending complementary

products to the items a shopper

is already considering.

• Drives less revenue than upsell

at 0.2%, but when automated it

is such a simple thing to do that

it would be silly not to.

Eton successfully use the cross-selling technique by offering ties to accompany the shirt being viewed.

• Reminds customers what they have engaged with but not put in

their cart.

• Makes it more difficult for customers to forget or leave behind items

that they were interested in, naturally increasing the chances of

spending more.

Browsing history reminder

Experiment with innovative ways to present these last

minute suggestions- for example, when

a person adds an item to their basket why not use a pop-up to

suggest further products?

BONUS TIP FOR INCREASING AOV

Oka use pop-up technology to recommend items relevant to the piece which has been added to the cart.

Problem #4

High number of abandoning shoppers

Nosto customer Greatdays saw a 60% increase in conversion

and 18% increase in average order value from using pop-ups.

Think about when to use them and what they should offer.

Pop-ups

THE SOLUTION

Discount pop-ups

• Tempt customers to the checkout with money-off their purchases.

• 32% of customers leave because they deem the overall price to be

too expensive.

• Time-limit these to make them more effective and ask for an email

address in exchange for the discount code to allow for data capture

on top!

An offer could be just the

thing to make them reconsider leaving empty

handed.

Abandoned cart pop ups Shoppers with items in their cart

are already highly engaged - ask

for email details so that they can

save the items in their cart,

greatly increasing the chances of

their return.

Yumi Kim use a pop-up triggered by exit intent to allow shoppers to save the contents of their cart, making it easier for them to return and also expanding their database.

Problem #5

Standing out above the noise

• 52% of people said that they felt overwhelmed by the

number of bargain-promoting emails they receive on a daily basis.

• Over half of all emails received are promotional.

At Nosto, we have seen that personalized triggered emails

have an average click-through rate 10x higher than the

industry standard.

Personalized newsletters

THE SOLUTION

Use tags to insert their name and

greet them personally once the email is open.

Insert their name into the

subject line.

Offer them personalized

recommendations from your inventory to maximize CTR

and conversion.

Browsing history reminder.

Browsing & buying related - Relevant pieces based on what

they looked at or previously bought.

Personalized Top Lists - Highlight the top products on your

store, ordering your recommendations according to to their

previous buying behavior.

to personalized recs that can be used in personalized newsletters

3 approaches

Wakakuu

tailor their emails to

the individual by

making product

recommendations a

central focus of their

newsletter.

Björn Borg keep their

newsletters timely

and current by

highlighting best-

sellers for both

women and men.

Problem #6

Low customer retention caused by sale driven buyers

Increase customer retention with personalized / triggered emails

THE SOLUTION

We miss you emails

Can be generated automatically and triggered by the lapse of

a set period of time since a customer’s last visit.

To cut through the inevitable email noise, make sure to

personalize the email with recommendations based on their

browsing and buying behavior.

Yumi Kim allow their product led email to draw customers back to

their store, reminding customers of the pieces they

had previously been interested and then

highlighting trending items on top.

Order follow-up

A customer becomes increasingly more likely to buy from you

as their amount of purchases increases.

Good customer service but it also gives you an opportunity to

suggest further purchase; either accessories to go with their

recent purchases or other items that their buying habits

indicate to be of interest.

Organic Surge follow up with recent

customers by highlighting further possibilities for

purchase by showing them products related to their

previous purchases.

Problem #7

Acquiring new customers in a period when shoppers aren’t as active

Increasing and personalizing your advertising efforts

Retargeting = ‘Online advertising [that is] is targeted to

consumers based on their previous Internet actions’.

54% of consumers find personalized ads to be more engaging

and 45% find them more memorable.

Compared to “static-one-size-fits-all” ads - automated,

dynamic product ads can generate performance

improvements of up to 400%.

THE SOLUTION

Ad types

Personal re-engagement ads

Post-purchase ads

Abandoned cart recovery ads

Best seller product ads

Highlighting real-time trending items from

your store. Nosto customer Eton, saw

13 x CTR on prospecting Best

Seller product ads.

Target customers who have visited your store previously by recommending products picked just for them based on their previous shopping

behavior. Eton saw 11 x ROAS on ads of these

type.

Encourage shoppers who selected items but didn’t quite

make it to checkout by recommending products related

to what they had in their cart. Eton saw 19 x ROAS on

Abandoned cart recovery ads.

Encourage converted customers to continue

their spree by suggesting items that are relevant to what

they have already bought.

Problem #8

Low traffic contributing to low revenue

Drive traffic to your store with social competitions

The average internet user spending 1.72 hours per day on

social media platforms.

Promote your brand, encourage certain social interactions and

ultimately highlight items in your inventory in a way that is

more interesting to your customers.

THE SOLUTION

Photo or video contests • Have been shown to get the

most engagement and are a

good way to turn your

customers into promoters.

• Ask customers to include your

products in their entries and all

of a sudden they are creating

the adverts for you!

• Get them to tag your store or

use a hashtag so you, and

anyone who is interested, can

keep abreast of all the entries. Om Nom Nom Cookies encourage their social followers to take and share a photo of themselves with their product to be in with

a chance to win a t-shirt.

Social engagement posts • Spread the word by asking

customers to like or share a

post about one of your

products for a chance to win it.

• Takes advantage of network

effects and ensures your items

are making their way onto the

timeline of people who are not

yet interacting with your brand

• Get existing fans or customer

more heavily engaged. Drinkwel encourage social engagement by asking people to simply like their post to enter their product-lead competition.

Caption competitions A fun way to interact with your

customer, encouraging people to

comment on a post which will

result in it naturally feature higher

in people’s timelines and

extending your reach.

Tauck ask their followers to come up with a funny cation for their photo, allowing them a fun way to engage with the brand.

Problem #9

Taking advantage of this natural lull to build your brand

Start a blog

Drives customers to your store.

Improves your website’s SEO.

Allows you to craft stories around your products, brand and industry that will help you to convert visitors.

Should be relevant but not boastful.

THE SOLUTION

Blog types

Behind the scenes • Your chance to give real insight

into your company, this shows a

level of transparency that many

shoppers find reassuring.

• Consider showing how your

products are made, or where

your materials are sourced. John Mackey Co-CEO of Whole Foods, hosts his blog directly on

the Whole Foods website and uses it to discuss the issues that matter to him and his company.

Google did a really good job of this type of storytelling in their advert series that showed small businesses such as the

Cambridge Satchel Company setting up shop, going from small home-based businesses to international best-sellers.

Company vision Talk about the ‘why’ and ‘how’ of

your company story.

M&S gives their take on the issues affecting their industry and that of their suppliers in an insightful and current blog.

Commentary pieces • Become a thought leader by

reporting and commenting on

your industry hot topics, trends

and industry news.

• M&S is a good example,

discussing issues such as the UK

bag plastic bag tax and fair

prices for milk farmers - all

issues that have recently been in

the news…

Topshop interview social media star Anais Gallagher about her Christmas wish-list, which, of course, includes a number of

Topshop items.

Product lead / instructional pieces • Should promote your products

in interesting and innovative

ways.

• A form particularly suited to

food merchants, with recipe

based pieces and the fashion

vertical with “What to wear it

with” style blogs.

Problem #10

Converting shoppers into long-term sales

Knowing what drives a

customer is half of the

battle- encourage loyalty

from these otherwise fickle

shoppers by rewarding

repeat business.

Offering points in exchange

for purchases made has

been shown to increase a

shopper’s annual visit by up

to 20%.

Implement a loyalty reward scheme

THE SOLUTION Estée Lauder offer loyalty program members a discount, as well as the chance to accumulate points. This encourages repeat purchases.

Thank you!

Nosto enables online retailers to deliver their customers personalized shopping experiences at every touch point, across every device. A powerful personalization platform designed for ease of use, Nosto empowers retailers to build, launch and optimize 1:1 multi-channel marketing campaigns without the need for dedicated IT resources. Over 20,000 ecommerce professionals in over 100 countries are using Nosto to grow their business and delight their customers. Nosto supports its retailers from its offices in Helsinki, Berlin, Stockholm, London and New York.

sales@nosto.com I www.nosto.com

To find out how Nosto can help you make Q1 a success, get in touch with on of our Ecommerce Specialists...