Ahead of Black Friday, Sharon Tom, Product Lead, BCG Digital Ventures, discusses some of the key strategies to keep holiday shoppers engaged.
Retail apps are notorious for their engagement problems. Adobe’s Mobile Retail Report shows that 60 percent of retail apps are used less than ten times -- the lowest usage across all categories of mobile apps. On the other hand, apps like Target, Wish and Amazon have been increasing their user bases year over year, some by double digits in percentage.
It’s no surprise that there’s a mad rush during the holiday season and that discounts attract more shoppers, but how do you keep your customers and clients beyond the holidays? We’ve uncovered five key strategies for retailers to increase their stickiness in order to convert holiday shoppers into lifetime customers.
Combination of discounts with urgency.
When a retailer combines discounts with urgency, customers are much more likely to complete a purchase. Take Wish, a shopping app that sells clothing, electronics and gadgets. Full of impulse buys incentivized by steep discounts, Wish ties everything to a discount. The more you come back to the app, the more discounts you earn; the more you buy, the more discounts you’ll receive. This simple premise has helped Wish reach a valuation of $8.5B. To put this in perspective, that valuation is worth more than Macy’s, Sears and JC Penney combined.
Amazon also employs this strategy of using the combination of discounts and urgency through a number of highly engaging features, such as “Watch a Deal.” Watch a Deal tracks all of the deals you’re interested in and gives a warning when your item is going live.
What makes this feature most compelling and fun is its play on emotions. Instead of giving you the instant gratification of buying right away, Amazon entices you to hunt for a deal and then wait for it to go live. This escalates a customer’s commitment to purchase the item since they’ve already spent the effort to find it.
Retailers that integrate gamification into their mobile apps and shopping experiences can motivate participation, engagement and loyalty. Wish accomplishes this loyalty by assigning users to different levels, offering new rewards to each level. As a user levels-up, they will accumulate more discounts, which is consistent with their brand’s offering and customer expectations.
Boston Retail Partners predicts that nine out of ten retailers (87 percent) will use gamification methods by 2020, with about half honing in on gamification in their loyalty programs. When it comes to loyalty programs, Sephora is best in class. Sephora has effectively uses a tiered system that incentivizes customers with makeup as rewards and perks like free shipping. The more you shop, the more gifts and better services you get.
Target is a great example of the bricks and clicks experience that ties the in-store and mobile experience into one. Target incentivizes customers to use its up by providing special app-exclusive discounts. This successful retail outlet has made their mobile experience easy to use, allowing all customers to see everything that’s in-store right on your phone.
Add any item to your mobile shopping list and the app will pinpoint its exact location in your local store. Recently, Target announced a suite of new technology enhancements that promise to even further improve the shopping experience.
There are also other digital channels to consider. Nordstrom has nailed these channels by enabling customers to buy directly from their Instagram account. From Instagram, customers are now directed to Like2Buy, so customers no longer have to dig around to find the desired items. Nordstrom takes it another layer deeper by curating a personal wish list or shopping cart based on items that a customer has liked.
Personalization solves for easy discovery, allowing retailers to surface products that fit their customer's varied tastes that they may not have discovered on their own. Nike’s app is all about tailoring the shopping experience to the customer. Realizing how important it was to engage their diverse customer base on a deeper level, Nike created a short quiz on their app which learns about their customers interests.
As a result, customers not only get better product recommendations, but also highly relevant events and release announcements. Nike’s revenue in ecommerce increased 19 percent in Q1 2017 due to better targeting and personalization. What Nike did can be replicated with simple algorithms that even smaller retailers can accomplish.
Personalization is also important to re-engage customers by finding ways to keep in touch with them and activate appropriate touch points. From customer segmentation of email databases to persona-driven messaging, personalization is about grabbing a customer’s attention and then making them want to return to your brand by helping the customers feel connected -- while still having a sense of individuality.
Simple and visual browsing experience.
The more visual the experience, the easier it is to get people addicted to your app. You’ll want your app to be easy for people to navigate, easy to see, and most of all easy to buy, what they’re searching for. Masonry style layouts that picked up traction with Pinterest have become a secret weapon when combined with a simple user experience that keeps customers scrolling (and focused on what they want to buy) with minimal effort and distraction.
The idea of infinite scrolling sounds simple, but it requires a different mindset from retailers who are used to valuing page views, which means utilizing pagination. Not allowing your customers to be able to scroll and scroll to their heart’s content, creates a bad user experience. Most businesses are now aware, clicking a page number is a usability barrier.
At a macro level, the visual experience is also a universal experience, appealing to different cultures where English might not be the primary language. America is a huge melting pot where one in five residents (60 million people) speak a foreign language at home. This keeps customers more focused on the decision point of “to buy or not to buy,” as opposed to getting distracted by walls of text that takes more time to digest.
Innovating beyond the typical e-commerce experience.
Increasing stickiness of your mobile app is something all retailers should be thinking about. But as the digital world continues to evolve every day, retailers must also consider how to adopt new technologies and engage customers beyond the typical ecommerce experience.
Sephora, for one, is using augmented reality (AR) to help customers find the right shade of lipstick. Ikea is also using AR it to let customers preview how furniture looks in their home. The use cases for AR alone are endless, and this is just one of many new technologies retailers can employ to make their digital experience sticky.
Then, there’s thinking outside of mobile apps, as led by Amazon’s voice shopping through Alexa-powered devices. Amazon Echo device owners spend 10 percent more on Amazon and purchase frequency growing at six percent. Implementing methods of engagements and shopping outside of mobile apps is in the longer-term future for most retailers and definitely food for thought. In a world where competition to find and create engaged customers intensifies, retailers will need to be innovative to keep their customers coming back for more.