10 things that will increase the revenue of an online store
It doesn’t matter the market segment or the size of your operation, one thing is certain: whether you are the Owner, President, C-Level Executive, Director or Manager of an online sales operation, you will always be searching for new opportunities to increase online sales and revenues.
Obviously, improving the business profitability is equally or even more important than the simple boost on online sales. So be careful not to end up implementing actions that will compromise the financial health of your operation. Attention to the indicators! Remember the basic concept of the PDCA matrix:
- Plan your actions in advance and try to establish alternative measures that allow adjustments to the original plan without compromising the pre-established goals;
- Do it according to the action plan, being careful not to divert the route to unknown paths that can unveil hidden traps;
- Control each task by constantly checking and monitoring metrics and key performance indicators;
- Act based on results, repeating successes, understanding failures and avoiding them. Restart the process adjusting the route and planning new actions to maximize results.
With these concepts in mind, we can move on and explore the 10 things you should know to promote the growth of your online sales.
1. Increase qualified traffic
Targeted SEM and marketing campaigns, improvements in SEO, programmatic media buying, remarketing, affiliate programs, partnerships with bloggers and influencers and the capture, cleaning, clustering and enrichment of the email base. The more targeted and relevant your divulgation initiatives are, the more qualified the public that visits your online store will be.
Extra: It’s more than obvious the long-term benefits that email capturing can bring to an online operation. So always offer something in return, whether in capturing new emails or in the enrichment of your base. Access to an exclusive content or product, a discount code, or even a free shipping offer are still effective tactics to draw the attention and motivate users to take action.
2. Develop a multichannel culture
Being present in all channels, delivering a unique experience of use, shopping, and service, no matter the touchpoint with the customer, is crucial.
And the integration between online and offline goes way beyond the pick-up store. There are several possibilities for interaction between the channels: showrooms with no local stock and in-store sales through kiosks, direct sales and door-to-door via App, mobile, multilevel marketing, cross-channel and cross- borders exchange and returns policies, just to name a few.
The biggest challenge remains in the adoption of a multichannel culture within companies, as somewhat they are still bound to more traditional retail models. But everything is not lost! Some initiatives within major brands in Brazil such as Polishop, C&A, and O Boticário show that there’s still a bright light at the end of the tunnel.
3. Improve online store performance
The faster your pages load, the better sales performance your online store has. A widely quoted study by the Aberdeen Group from 2008 showed that a 1-second delay in page load time is equal to 7% less in conversions.
This study could not be more relevant nowadays when user expectations of faster page loads can do nothing but grow. So, be careful when hiring an e-Commerce solution! Take a look especially at the following features:
- server response time;
- if it offers natively or allows integration to a content distribution network (CDN) and cache solutions;
- if it enables access via the native Content Management System (CMS) to make fast improvements to the front-end code;
- if it allows you to work with the latest front-end tools, such as React, for example, which speeds up pages’ loading time;
- if it works with a non-relational database, which reduces the requests to servers, speeding up pages’ loading time.
4. Improve the responsiveness, UI and UX of your e-commerce
Along with pages’ load time, the easiness of browsing, search and checkout also play an important role at the time of the order placement. Helping customers find what they are looking for in a fast and intuitive manner, whether on the desktop, on the tablet or on mobile, is an essential matter for converting visits into sales.
But when it comes to mobile, having a responsive layout is just not enough. The mobile UI and UX should be carefully planned to promote a fluid navigation, speed up images and textual information loading time, as well as facilitate the payment and the order completion processes.
An optimized checkout, with fewer steps, connected to different payment methods, with delivery and credit card data storing and a simple authentication process can increase the conversion rate by an average of more than 20% and, at the same time, promote the growth of the recurrence and repurchase rates.
In 2017 in the US, almost half of the online consumers made use of mobile devices to complete their purchases, which in numbers represents about 1/4 of all US e-commerce revenues. The projection is that these numbers will double in the next 5 years.
Extra: the use of mobile apps is in constant growth, and it’s getting more popular each day. But be aware that promoting the use and downloads of these Apps is completely different from promoting an online store. If this is the path you wish to follow, it’s prudent to consider the allocation of extra financial and human resources for the channel’s management.
5. Enrich your catalog and increase the offer of products for sale
By doing a quick mental calculation we can conclude that the more products we have available for sale in an online store the greater the sales income of this store will be. Right?
Okay, imagine this: A store used to have one thousand products for sale and now it has around ten thousand. This means that if these additional products are being indexed by search engines, there will be an increase in the organic traffic coming to this store, and if we consider the retention of the conversion rate, a larger volume of sales will eventually be generated. It is as simple as that!
Okay, maybe it’s not that simple, but we can conclude that, in fact, this store will sell more products with this growth in the catalog. Now let’s look at the available options for increasing the products offer without, at the same time, proportionately increasing operational costs. Here are some options:
- cross-docking: in this option, the retailer includes products from a supplier in his store’s catalog for online sales, but does not need to store them in his warehouse. When a customer places an order, the retailer requests to the supplier to send that product to his distribution center that will then forward the product to the final customer.
- drop shipping: it works partially like the cross-docking, but when a customer makes an online order, the retailer buys the product from the supplier, which then sends it directly to the customer. Some companies such as the Spanish brand of sunglasses Hawkers have adopted the drop shipping cross-border as its logistics strategy. Thus, their products are shipped directly from the manufacturer in China to any country in the world where the brand has an online presence.
- marketplaces: an already well-known concept where large online retail operations add products or services provided by third parties (sellers) to their catalogs. Transactions are processed by the marketplace, while the fulfillment and the logistics, in this case, can be operated by both the marketplace and the seller. Giants like Amazon and Alibaba are two of the global exponents of the marketplaces segment.
- networking: originated from the concept of marketplaces, but with one main difference: in the networking, retailers exchange their catalogs with other vendors, who quite often sell accessories or supplementary products to the retailer’s own catalog. A few e-commerce platforms already allow this exchange to take place natively, and it is up to retailers to establish commercial agreements and the products’ selection.
Extra: operating within marketplaces may be a good option to leverage your online sales, but beware of your margins! If you act as a seller, control your P&L statements by channel. Do the math and keep a close eye on the contribution margin!
6. Upgrade and increase your promotions offers
There are many promotional scenarios that can be applied to an e-commerce operation and the interchange between channels especially considering the online with the offline is becoming more and more common.
Since promotional campaigns usually have a big impact on the contribution margin working with scenarios that promote the repurchase or the increase in the average ticket are always the best options for retailers. Therefore, scenarios such as cashback, loyalty programs, and progressive discounts above a certain amount, are generally the safest bets.
But this does not mean that a more aggressive campaign to promote the inventory turnover should be left out of the viable options. So, increase your promotions offers, but pay attention to the indicators and the financial health of your operation!
7. Promote the average ticket growth
According to the infographic created by Sellbrite titled “How Amazon makes its money,” about 35% of the company’s revenue comes from the “frequently bought together” and “customers who bought this item also bought.”
Cross-selling techniques like these, massively present in online stores nowadays, are still great options to promote the average ticket growth, especially if there is some sort of additional incentive for the consumer to add a supplementary or an accessory item to the shopping cart. Obviously, the greater the relevance of the products displayed is, the greater is the likelihood that these items will end up being ordered together.
Other ways commonly seen in online stores to promote the growth of the average ticket are:
- up-selling: when the store recommends similar products that have a greater added value, but usually the difference split into installments ends up not representing a barrier.
- extra services: customization of items, gift cards, extended services or guarantees, packages and gift packaging.
- extra incentives: the calculation of the missing value for the client to benefit from a promotion or differentiated commercial condition, like free shipping, for example, among others.
8. Improve your store’s conversion rate
This is certainly the most complex element because, in a way, it comprises all the other items listed in this text and much more! Increasing the conversion rate of an online store usually takes a long time and involves improvements on several fronts, such as technology, commercial, marketing, services’ providers, customer care, among others. Below you will find a few points that deserve attention:
- know your competitive advantages and present them in a simple and clear way. Answering to yourself the question “why would I buy from this store?” is a good start point.
- know your target audience and impact it by offering relevant products or services, as well as competitive business conditions.
- build, improve and maintain a good online reputation. Display in the footer of your store pages its recommendations, warranty, and safety seals.
- have clear and accessible policies of shipping, exchange and refund, payment, promotions, and privacy.
- constantly monitor the performance, look and feel, usability, searchability, filtering and navigation of your online store.
- build product pages with clear and relevant information, along with well-produced photos. Attention to the SEO! Don’t forget to clearly state shipping costs and delivery times.
- opt for solutions that contain a simple and fluid checkout, connected to multiple options of payment.
- use automated tools for the recovery of abandoned carts, unpaid and unfinished orders. If automation is not a viable option, do it manually!
- use remarketing tools.
- always look for means to promote the repurchase. Make use of loyalty programs, cashback coupons, frequently bought products’ subscriptions, etc.
- provide a 24/7 customer service through a variety of contact channels. Use options such as chatbots, interactive FAQ tools, and artificial intelligence to cover the Customer Service Central non-working hours.
- periodically conduct A/B testing to promote continuous improvement to the UI and UX of your online store.
9. Promote the repurchase and the recurrence
Keeping customers engaged with your brand and online store requires additional strategies. As briefly mentioned in item 8 above, it is essential to promote the repurchase, whether with loyalty programs, cashback coupons, or subscriptions to products or services, among others.
Segmenting your customer base and triggering periodic email or SMS messages containing related, supplementary, or accessories products to items already purchased, coupons and happy birthday messages, children’s birthdays, wedding anniversary, favorite sports team, products added on wish-list and “let me know when available” list, are a few ways to keep the customer relationship flame alive.
Asking the customer to write a review or recommending a product a few days after its purchase may also be valid options. Enriching this base with additional information that can make segmentation even more effective should be a mandatory premise. But remember to always offer something in return!
Some of these same concepts may be also applicable to your newsletters opt-in base. In addition, making a quick survey to try to figure out why this customer, who has shown interest in your store by voluntarily providing its email address, has not yet purchased any product from your store, can also help to determine its consumer profile so that you can impact and engage it with more relevant offers.
10. Outsourcing is necessary
One way to increase revenue and the contribution margin of your online business is through outsourcing. E-Commerce platforms with better performances increase conversion and consequently revenues, and, in many cases, dramatically reduce operating costs compared to on-premises proprietary solutions, for example.
Outsourcing the fulfillment, the logistics, the customer service automation, and so many other tasks can represent a significant additional reduction in operating costs. The success case mentioned in point 5 above about the Spanish brand Hawkers is a good example of how the company managed to reduce operational costs by working with drop shipping cross-border as a logistics strategy, shipping the products directly from the manufacturer in China to any country in the world where the brand has an online presence.
Extra: promoting A/B testing with outsourced services can also be a great way to reduce costs and on top of it increase the NPS. Taking the logistics as an example, working for a certain period with 2 or more suppliers can show surprising results, not only related to the reduction of operating costs, but also to the improvement of the store’s delivery SLA.
Now that you have explored the 10 things you should know to promote the growth of your online sales, where to start, right? Obviously, there is no basic recipe that will work for everyone, especially because there are completely different online operations with distinct business models, maturity levels, sizes, and activity areas. But I guess it is worth doing a reflection by looking at the inside of your operation and find out which of the points mentioned are more adherent to the reality of your business. Then, just put your hands to work!
Good luck, and happy selling!
Sources and complementary reading: