The Future of E-Commerce - Part 1 - Consumer relationship
THE FUTURE OF E-COMMERCE - PART 1 - CONSUMER RELATIONSHIP
In this article, as an ecommerce speaker, I will tell you about the problem with how we work with consumers online compared to in physical stores and discuss some solutions to this.
At Lizer Group we solved this by collecting valuable intel about that 98 % which has proven to be a game changer for the companies we work with, enabling them to grow efficiently with a broad spectrum of intel about their entire visitor base rather than only those 2%.
It's not all about behavior but rather about meeting your customer. today what we do is that we don't meet but rather push our potential customer. We should focus more on loyalty and perhaps not in the way you think of it at first but to build relationships and returning visitors as returning visitors become customers when the time is right for them.
If we look at all the visitors to your store, we can easily divide the traffic into three categories to make you understand that this is in fact true.
Out of all your visitors, there are three groups of consumers visiting your store today. The first group are the first time visitors, the ones that browse around but for sure will not buy something, then we have the other group which to some extent also are first time visitors but these are much more open for suggestion and/or easier to manipulate to make a purchase decision, last but not least we have the ones that even before visiting the site have decided that they will buy from you and most probably already know what they are planning to buy.
As companies struggle to solve the problem with user distrust, brands such as Airbnb, Everlane, and Zappos have applied new methods to build a trust infrastructure. Embracing consumer reviews and creating an optimal user experience are all tactics these companies have used to build and maintain trust. Again we see that companies start to work with their customers rather than their visitors, this is a huge problem that I will not cover in this chapter as it's going to distract you and today's point is an important one. So before we go wander off and talk about the problem that almost all we do are based on the statistics around the 2% of the visitors that become paying customers rather than the statistics around the 98%, the visitors of your store.
This is good a start but it's far from the entire solution, so let me explain what's wrong here, the problem is that we in all these situations act as we could or rather the industry act as we should push everyone to make a purchase decision even when they are not intending to make a purchase at this point and time.
The industry calls this a conversion optimized purchase flow and then that's blended with tracking ads.
I will talk a lot more about tracking ads in a future article but let me just touch it real quick.
Tracking ads work, that's just the fact that no one can question, all studies show and even common sense tells us that if we are exposed to a product that we have shown an interest too we will to some extent reconsider that product and in some situations we will buy it even when we previously decided not to buy it.
But what most people don't think about is that it's not all about making your visitors buy, no it's actually all about making your visitors want to come back and to treat them with the best quality customer support.
Customer support should be renamed to something else for sure, how often do you walk into a store down the street and ask for customer support when you want to buy a pair of shoes... Yes, I'm sure you get my point now, making customers happy is not about providing customer support but rather to provide them with service and advice related to their questions.
You got me wander off again, Yes as I'm sure you already feel I live and breath this and I can go on for weeks ass I love to share my knowledge and experience with you so I easily flood you with information but will try to keep it together to make sure that you can follow me.
Back to the tracking adds, studies show us that with tracking ads we get people to buy the products they have looked at in your store. But this method obviously does not get all those visitors back buying everything display too them in your ads.
But what most stores don't look at is the long-term effect of this strategy.
Consumers report that they feel negatively about the tracking ads because of several things. One thing is that they feel that you're intruding on their private space online, secondly thatthey actually already bought the product that the ads are about from some other store or even from your store as the connection between me the consumer on a "Cookie" basis are not connected to the account that are created when I purchased that product (a Cookie is a small file saved in your computer that the website can use to save the personal data that are generated on the website when we don't have a registered user account, this is also used to create a sort of ID that is not connected to you as a person but to the computer or device that yours using to browse the website with). In some situations, the stores even push out a discounted price in the tracking ads making the consumer that already made the purchase even more dissatisfied and now feel that he or she made a bad purchase decision.
That was just a short touch on the reality behind tracking ads and what I wanted to point out is the obvious, tracking ads do generate sales but damage the brand in the long run so if you want to build a brand that people trust and feel that they would buy from in the future this is not the way to do that.
The online consumer behavior compared to the behavior in physical stores are both very different and very alike.
But let's start by looking at some of the obvious parts which you can relate to easily, when you enter a store down the street you expect service, that service does come in different flavours depending on what type of store you enter but its also different how the store clerks act depending on what country you're in. The one purpose store clerks all over the world have is to help you find what you're looking for and often also manage the actual transaction.
This is not what we see online in most e-commerce sites, but this is where it starts to get interesting because in China they have for many years already been working much closer to the consumer than what we have seen in all other countries. The difference is huge if when we look at the numbers, as statistics show us that in Europe and US we have about 20% of the orders generating a customer interaction with the store staff, note that we are talking about per order and not per visitor.
When we look at the same numbers in China we can see that there are about 400% of the customers that interact with the store per order. Yes, I know this is amazingly interesting, so what we see here is that only 2 out of 10 customers contact the store per order outside of China but in China, the consumers contact the store 4 times per order on an average.
This is because the stores support more of the normal consumer behaviour based on how we act and what we expect from physical stores, where if I look for a new pair of shoes I enter a store that I expect to have the type or brand that I'm looking for, I walk around the store and after a few seconds I have someone at my side that are willing to help me out.
It's about the same in the e-commerce market in China, after a short while you are offered help through a chat interface on the store's site. You might think that you got a chat window in your store and that you're all good but hold that thought for a second.
What we the consumer normally do in the store is that we talk to the store clerk and explain what we are looking for. In the chat window online we most often see that the customer start to interact with the store when they have found something of interest but are not ready to buy it yet.
The chat dialog is about the product, where the consumer wants to get the information presented to him rather than hunt for it on his own. The online store clerk handles this and helps the consumer pick out the color and the size of the shoes and all this is managed for the consumer on the fly.
When the consumer has all the information needed to make a purchase decision the store staff has already prepared it all so that the item that was discussed is already placed in your cart in the right size and color.
So as you read this article and probably have read a few of my previous articles (if not I think you might like them too) you know by now that conversion is much about removing distraction and supporting the consumer.
So just answering the questions for the consumer is not enough, so the staff populate the cart with the items for you but to make sure that they support you through the entire process they don't just update that normal cart on your site but actually have prepared the cart for you right there in the chat window and you can proceed with either asking more questions or complete your order right there, no bouncing back and forth between the chat and the store.
We have now explained the background and the standards related to the problems with how we treat consumers online but also how stores in China have found solutions that are fare more efficient in building brands to trust and to build that long-term engagement and consumer loyalty. At Lizer Group we analyze consumer behavior with machine learning and automated actions to create a way to connect and communicate with your visitors, that 98% of your traffic and not only the 2% that finalize an order.
The online consumer journey is built on trust and support and its not about being pushed, that's what we are all about at Lizer Group and we are helping companies with this problem in more than 100 countries already.
With our product Store Clerk, we support the customer and gather intel for the store to act on to make sure that the customer feels that they get the treatment that is expected.
One of the future strongholds of any e-commerce store is if you listen to and treat your visitors great you will see a positive result on your sales and outsmart your competitors.
We reached the end of this part of the series where we have looked into the challenges related to how we treat and work with consumers in different markets and what methods that you can apply for your store to operate smarter and more efficient, making your store stand out from the crowd and take more market shares from your competitors.
Make sure you don't miss any of the previous articles but also the next one in this series of articles in the future of e-commerce by Karl Lillrud.
The thin red line article series can be found here:
Part 1. https://www.linkedin.com/pulse/fearsome-truth-e-commerce-karl-lillrud
Part 2. https://www.linkedin.com/pulse/how-e-commerce-failing-karl-lillrud
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I want your help to spread the word, I have been working in this business for many years already but I rarely see these type of articles, and to me, that's an alarm bell going off. The things I talk about are to a large extent things that almost everyone in the e-commerce business should know about but most people don't. So help me help your friends, help me spread this article so that we start solving these major problems and if you're interested in talking about it more I am here, just give me a call.
If you like me to come and speak at an event, a seminar, a school, or in your office just reach out to me.
About the author:
Karl Lillrud is a serial entrepreneur with 21 years of experience from this segment. Founder of one of the first interior design e-commerce sites in the Nordic countries where he back in early 2000 learned about the many challenges that e-commerce struggle with even today.
That's why Karl decided to help companies overcome these hurdles and focus on what matters most, keeping customers happy and helping the companies improve their market position. Being a public speaker and entrepreneurial mentor Karl love to share his experience and knowledge with the one goal to help others reach their success easier and faster.
Surce:
https://www.forbes.com/sites/brentgleeson/2017/05/17/measuring-trust-and-its-impact-on-a-companys-financial-performance/#3c08ca565dd2
http://www.hugeinc.com/ideas/report/how-brands-build-trust-digitally
https://www.statista.com/topics/871/online-shopping/
https://www.export.gov/article?id=China-ecommerce
https://chinachannel.co/1017-wechat-report-users/
