With online holiday sales predicted to reach $91.6 billion in 2016 — an 11 percent jump from 2015 — e-commerce retailers are expected to enjoy more success than ever this season. But it also means the space is congested, with hundreds of thousands of brands trying to squeeze everything they can out of this flurry of consumer spending. To accomplish this, these retailers are exploring new tools, tactics and technologies to gain and keep a competitive edge.
Thankfully, there is no shortage of new tools to help retailers gain that edge, and leading the charge are two strategies in particular that have not only proven to be popular among e-commerce professionals but also highly effective: SMS and online negotiation. Whether for increasing engagement and time spent on a website or decreasing shopping cart abandonment and bounce rates, both strategies are surging in popularity because of their ability to drive results.
Negotiation is a tactic as old as trade itself. It’s easy for brick-and-mortar retailers to negotiate price with customers because the customers are right in front of them. Things get more complicated for online merchants. While eBay and Amazon have been practicing personal pricing options for years, negotiation offers a more customized and tailored approach — for the consumer and the seller.
Retailers that negotiate price with consumers see an increased conversion rate of 18 to 20 percent, largely because they are better able to successfully cut down on comparison shopping and shopping cart abandonment; 68 percent of shoppers leave their carts to price compare midway through a transaction. But with the ability to negotiate — for shoppers to make an offer to the seller on a product they’ve been eying — online retailers find they don’t need to lose a customer over price. Retailers sell more, faster, while preserving the brand and increasing overall revenue.
Perhaps best of all, implementing negotiation tools on a pre-existing ecommerce website is far from complicated. New tools and technologies have all but made the tactic mainstream and entirely automated. Integration with Magento, Shopify and other platforms is actually quite simple once a seller has selected price parameters. It’s plug-and-play; no need to have a sales rep monitor and approve inbound offers from shoppers.
Chatbots are sexy and all the rage right now, but good old SMS marketing has proven to be a potent tool for online retailers. SMS purchasing is predicted to reach $16.8 billion in 2017, a 40 percent jump from 2012, when SMS-generated spending was at $3.2 billion. Expect to see more of it this holiday shopping season because when it comes to customer engagement, there’s not much else out there that can compete. To put that in perspective:
*The average SMS open rate is 99 percent; email open rates range from 28 to 33 percent.
*Only about 10 percent of SMS marketing messages are marked as spam; email metrics are astronomically higher as many customers have grown weary of email campaigns.
*Shoppers are 10 times more likely to redeem a coupon code received via text when compared with email.
Looking at the numbers, it’s not hard to see why. We now live our lives on smartphones and, in turn, engage more with brands in this manner. About 50 percent of U.S. consumers make direct purchases after receiving an SMS text, QR code or coupon from a brand.
There’s even more at stake for e-commerce retailers during the holiday season. Many employ negotiation tactics like extending holiday discounts to capture last-minute shoppers. To more aggressively convert elusive holiday shoppers, retailers can offer enticing deals like price matching and volume discounts and incorporate SMS into their marketing strategy. These tools — proven to raise conversion rates, customer loyalty, and profits — give retailers a leg up in the increasingly competitive e-commerce market.
Andrew Scarbrough is co-founder and COO of PriceWaiter, a price-matching solution for e-commerce retailers.