New Age E-Retail Strategies
E-retailers must focus on cultivating existing customers because they can’t count on acquiring too many new customers going forward. It’s a well-known axiom that it costs less to engage existing customers than to acquire new ones. It’s been said that the cost of acquiring new customers is three to six times that of retaining current ones. Current ecommerce research confirms this.
Estimates say U.S. retail ecommerce will reach $131 billion in 2007 (excluding travel). But retailers won’t be increasing sales by attracting new customers. Instead, online retail strategies should include:
- Cultivating existing customers
- Developing customer loyalty
- Taking customers away from your competitors
- Motivating your customers to spend more
When WalMart gets behind online commerce in a big way, you know that retail is entering a new era. This topic is covered in a new eMarketer report, “US Retail E-Commerce: Entering the Multi-Channel Era” ($695).
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I became aware of WalMart’s online push when purchasing a CD that arrived damaged. It surprised me to learn it could be returned to the store. The store didn’t stock the item so they gave me a refund, but I had to call customer service to get the shipping charges credited. At the same time, I re-ordered the CD by phone without having to do it online. All my info was there, making it a seamless operation. I immediately got email with the credit, and the next day the re-ordered item was shipped.
What’s notable about this mundane transaction is the subsequent WalMart survey. I was astounded at the depth of the questions by BIGresearch. You could tell WalMart is trying to synchronize their online and offline sales, doing everything it can to become customer friendly. While it seems like a no-brainer, how many retail sites offer in-store pickups and returns?
Buyers Spending More Online
Because existing online buyers find ecommerce easy and convenient, they are responsible for increased online spending. However, not many new buyers are coming onboard because the web already attracted those willing to purchasing online, and those who don’t, probably never will.
It’s so easy for shoppers to research products online before purchasing in-store that it’s become the norm – for those willing to order online. What does all this mean? Bottom line from the eMarketer report: Now is the time for multi-channel retailers to build a bridge between their local stores and their web sites in order to increase sales.
