Customer experience is often overlooked as a critical element when improving online conversion rates and increasing the effectiveness of advertising. As shopping behavior shifts and consumers are more thoughtful about where they shop, ensuring you have a seamless experience has become a necessity.
Brands selling online and through wholesalers must match or exceed their partners' online experience. Why would someone shop from your direct-to-consumer website when they can get the same product elsewhere faster and with cheaper returns?
Retailers used to lag, but now, many offer a better online shopping experience than the brands themselves. Here's an example of the key perks to shopping from REI compared to some top brands.
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I categorized the experiences into the following sections: Shipping, Returns, Customer Service, Loyalty, Payment Programs, and Gifting. As you can see, REI offers a better experience for some of the brands, ultimately making it hard for these brands to compete against retailers for their customers.
Shipping
When shopping online, shipping can be one of the most significant considerations for a consumer. They ask, "How much will it cost me?" and "How quickly will I receive my order?".
Brands should monitor their wholesale partners and identify what works best for them in their market and industry. Most brands will want to offer free shipping after a threshold or for loyalty members, and three shipping speeds: standard, expedited, and next-day.
Here are platforms you can explore to help improve your shipping logistics:
Returns & Exchanges
Simplifying your return process is an important aspect of online shopping because consumers have to decide without experiencing the product. In a study by Veho titled "Shipping is the New Shopping: The 2023 State of Delivery and Returns Satisfaction", 74% of respondents said a strict return policy negatively impacts their desire to shop with a retailer.
It's essential to balance a flexible return policy with the profitability needs of the business. Brands should consider having at least a 30-day return window. We found that many brands are charging for return labels unless it's an exchange or for loyalty members.
Consider these platforms when evaluating your returns process:
Customer Service
Consumers are spending more time researching the products that they purchase. When shopping in-store, consumers can ask for advice and help from sales clerks. Consumers must rely online on customer service channels like email, SMS, phone, and live chat.
You should strive to enable a seamless shopping experience for your consumers, allowing them to get questions answered quickly and for someone to solve shopping obstacles.
Consider these systems for your customer service:
Loyalty
One of the best ways to combat the impacts of rising acquisition costs is to increase the lifetime value of a customer. Improving the value of a customer allows you to spend more to acquire new customers and stay competitive in the market.
Loyalty programs have become an excellent tool for retaining and activating customers. It's also become a valuable tool for collecting first-party data that can be used for advertising in the future (especially as we start to see data loss from cookies going away).
You should incentivize customers to join your loyalty program by offering unique benefits like free shipping, extended return windows, VIP shopping access, etc.
Consider the following tools when building out a loyalty program:
Payment Program
The Buy Now Pay Later (BNPL) phenomenon has transformed online shopping and made it easier for consumers to purchase the desired products. BNPL has become valuable for Gen Z and millennials looking for alternatives to high-interest credit cards and other debt options.
I recommend you have at least one BNPL option for your customers and key products (depending on price).
When reviewing Buy Now Pay Later platforms, you should explore the following:
Gifting
Brands should take advantage of year-long gifting opportunities, building a seamless experience for shoppers to purchase for others easily.
Building a gifting experience that includes gift messaging and receipts benefits the brands in two ways. It allows you to capture consumers looking to purchase gifts and enables you to build a gifting audience segment (since now you know which purchases were gifts).
Integrating gifting functionality in your purchase flows will require the help of a developer or third-party tool and integration with your fulfillment partner. While not an easy endeavor, it can be a massive boon to the brands that invest in it.
TL;DR
Enhancing customer experience is crucial for boosting online conversion rates and advertising effectiveness, especially as consumer shopping behaviors evolve towards more thoughtful choices. Brands must ensure their online and direct-to-consumer experiences match or surpass those of wholesalers and retailers. Critical areas for improvement include shipping logistics, return policies, customer service, loyalty programs, payment options, and gifting experiences.
