March 11th, 2019
Website Trading – mistakes to avoid
19 Feb 2020 Dominic
Trading your Ecommerce website is a challenging day to day requirement for all businesses but it can be fraught with dangers and pitfalls which may negatively impact on your sales. There is a multitude of housekeeping to be done to keep on top of this day to day trading however below I have listed just a few things to consider when trying to manage the D2C (Direct to Consumer) website trading.
How are your customers using your website? What are the pinch points on the website? Without knowing these, you will struggle to understand what issues your customers are facing on your website. You may have recently re-platformed with the result being that sales have actually declined as customers struggle with the new website.
Many times, I have seen customers and clients make incorrect decisions on trading based on what they THINK the issue is but do not know for sure. Would you take a guess with your business and risk decreased sales? Data is key here and that is why you need to have a Google Analytics account which has been set up correctly. One of the challenges I have seen with clients is data which is skewed every few years due to either new channels, new functionality or new platform.
When sales start taking a dip, the first thing you may think of is to get the discount offers out however consider reviewing your Google Analytics account at the same time and try to Analytics understand any issues.
You need to understand your marketing channels and how they work with one another. Ultimately, I would be looking at your budget and trying to understand what the best mix of channels should be to drive the maximum return on your investment.
Not all of your audience will be the same – eg some of your customer will be engaged with your brand and contribute to your Organic traffic however others may only ever come in once through for example and Affiliate voucher code and never shop again.
Understanding the uses of each channel, where they appear in the buyer journey and ultimately how they contribute to increasing the Lifetime Value of your customers should be key for any retail trading business.
Marketing investment is secured and you are ready to start driving traffic to the site … you launch activity and … conversion rate is much lower than expected. It doesn’t matter what digital marketing activity you have planned if your website does not do as much as possible to work that customer for the sale.
- Do you have enough badges of conversion (Feefo, Google Reviews, Certificates, Awards etc)
- Do you make it easy for your customer to find relevant products?
- Is the checkout process laborious and time consuming?
- Is the delivery proposition good enough and, if so, up front and visible?
- Does the website load quickly enough?
With the growth model I use, one of the key components is the trading element of the site – just what is missing and what could be done to improve website trading to drive up that conversion rate?
Instant sale vs measured growth
“Sales are down – quick lets get an offer on!” Too much focus on the immediate sale with little science or YOY analytics behind is just not practical nor will it provide any consistency in modelling up YOY sales growth.
To drive YOY sales without resorting to getting sale discounts on every week (thus devaluing your brand proposition), the key things to focus on for me would be
Growth Plan – sitting down 4 months before your year end, I would be discussing what growth looks like the following year – and where we feel we will get that growth from (ie new channels, brand activation, conversion improvement, product additions).
With each of these, clearly defined targets which are agreed and become the KPIs with which to measure against.
Traffic – From the agreed growth plan, you should be able to model out a rough idea of the traffic from the new initiatives discussed and agreed. Don’t forget to look at each channel and understand what, if any reach you can get – eg can you work with more affiliates to drive growth?
I worked with one company who had decided to stop working with Voucher Code affiliates. The previous year, these affiliates had driven £450000 in revenue for the business .. without actually discounting. These were merely links from content on these affiliate sites with no discounts given. Understand your channels and how they can drive growth.
KPIs – It is essential you need to define the KPIs needed to drive the agreed growth to hit YOY sales targets. Companies reacting to ongoing sales drops by discounting will invariably not have KPIs defined and tracked to. Sitting down and actually understanding WHY sales are down by looking at the KPIs will give you more insight into your business than knee jerk reactions.
One example I can think of was a client who did exactly this – discounted for 15 days due to sales drops only for me to find out that they had released new functionality 15 days earler which was impacting checkout! The fix cost £500 in development costs but by then they had already lost £20000 in promotional costs to hit target!
Trading Calendar – the trading calendar is key for any retail business. From back filling when the new ranges are being photographed, styled and brought into the business down to when they go live and overall targets per campaign, the trading calendar is key. With many of my clients, this is the key part of the mix which is missing.
Having a strong trading calendar, preferably which has a similar daily / weekly laydown each year, will make it easier to understand and track your YOY growth. This also makes it easier to track YOY run rates and understand where you may be having issues in trading (eg perhaps customers are just not buying into that new collection?
Product – how can you improve the product offering to drive your growth? What are you customers buying into and what types of customers are buying your product? Do you look at the product / category data on a weekly basis and look at the shift in buying behaviour as the trading seasons change? Do you listen to your customers or get them involved in ranges to assess what they like and don’t like?
Analyzing the product data on a regular basis should give you data which can be used to target more customers more effectively.
Purchase / Conversion Funnel
So the customers has converted – and you have got the sale which is great however are they many different stages to converting a customer and you need to look at every stage to understand are you doing enough at every stage. I like the Attrition / Customer Retention model which is a simple model to understand each of these stages.
The first part focuses on all those things which are needed to convince those customers to purchase- education, interest, consideration etc
The second part then focuses on how you get those customers repeating business with you and also advocating your brand to others.
Getting these customers to recommend others then becomes an effective way to feed the top of the funnel again.
If you are a retailer with a big SKU count, how do you manage product which is continually going in and out of stock or perhaps you are a fashion company with high rates of sell through?
Keeping old stock on the site to help SEO can actually lead to other issues such as high bounce rate and SEO dips in performance. Leaving this old stock on without having a strategy in place to inform the customer can lead to other issues – these products may continue to receive traffic but contribute to your high bounce rate.
You need to be looking at what the best way would be to manage these products / pages. This depends on which platform you are on and it’s capabilities plus the agility and development time you have available
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