How To Improve Ecommerce Customer Retention

7th September 2022|Strategy, Digital Marketing, Design & UX,

The age of the online shopper means customers are becoming less loyal and interested in brands. Instead, they are searching for the best deals elsewhere. And whilst a lot of retailers are suffering from the Amazon-effect, there are equally retailers who are rising to the challenges Amazon presents.

Customer retention/loyalty is becoming a big focus for many brands now more than ever before, with teams analysing everything from their promotions, merchandising and logistics from the ground up. With new hires spending time researching the brand’s proposition and where aspects of their ecommerce business can be improved in order to stand a better chance of achieving better customer retention, conversion and sales online.

If you can give your customers great products and services that rival your competitors, or even stockists, you can ensure that they’ll keep coming to your online store.

Running your ecommerce store on Magento, particularly Magento 2, is a great start to retaining customers, but it’s vital to have a customer retention strategy in place first!

What to Include in an Ecommerce Customer Retention Strategy

First of all, let’s be realistic, you’ve probably complained about the ‘Amazon-effect’ recently and that customers are becoming less engaged with brands. If you have, then you need to focus from the ground up to figure out where friction points with your customers are online. In particular, ways in which your ecommerce website could be letting customers down. Some examples include:

  • Content doesn’t communicate with your customers effectively

  • Difficult user experience

  • Product categories and merchandising aren’t clear

  • Products themselves aren’t satisfactory and your competitors’ products are outgunning you

  • Shipping, logistics and returns aren’t up to scratch

  • Payment methods aren’t flexible

  • You aren’t learning who your customers are and what they want

Everything on your Magento ecommerce store will impact a customers’ view of your brand and whether they’ll buy from you, or go to Amazon (for instance). And it doesn’t just stop on your website, the follow up in your email communications is important too.

But let’s start from the beginning!

Digital Marketing Strategy

Your digital marketing strategy plays a key part in your retention plans because this is the first touch point for your customers, so it’s important that your website content strategy clearly communicates your USP.

You could use your current customer reviews (we’d recommend Trustpilot), online and offline advertising, influencer partnerships, press, social and blog. Allow your brand’s personality to shine, you are unique and your customers should see why you’re different in your photography, videos and communication style.

Once you’ve got your customers hooked with your marketing, it’s time for the website itself to deliver.

User Experience Design

Customers shop anytime and any place and an ecommerce website solution that supports your business growth, like Magento, is an absolute must. Your website design and user experience should also be as streamlined as possible to ensure that users are engaging with your website to keep them coming back. This means:

  • Responsive website design

  • Easy to use navigation

  • Clear product categorisation

  • Effective product merchandising on landing pages

  • Magento features that make for a more exciting user experience than your competitor’s website

  • Micro UX features like back to top buttons at listing level, forever scroll, lazy loading of images, hierarchy of content on product pages that allows for quick add to basket etc

  • Clear calls to action

  • An ‘endless’ user journey – no blockers or brick walls

  • High-resolution product photography (and lots of it!) or catwalk videos that allow customers to see every detail

  • Working with digital influencers? Feature more ‘street style’ or ‘real life’ photography to inspire customers on category listing pages

  • A strong ecommerce hosting solution that will allow your website content to be delivered to your customers as fast as possible across all devices

Magento 2 Checkout Experience

Research from various sources (including the likes of IBM and Forrester) has shown that the average checkout abandonment rate ranges from 60%-80% (2016/2017); it was 50%-60% in 2015/2016. If you want your customers to keep shopping with you, your website needs a fast and convenient checkout.

One of the many benefits of a Magento 2 upgrade, is the new two-step checkout. Unlike many other ecommerce platforms out there, Magento has modernised the checkout in order to address the most common friction points at this crucial point of conversion in the ecommerce user journey.

The new Magento 2 checkout has a presumptive guest checkout with two-steps only, plus automatic card type detection, with the option to register your account once your payment is confirmed. This level of convenience should be stitched into your customer retention strategy and built into the entire ecommerce website experience.

TOP TIP! You can also integrate auto-fill address detection service Addressy (now Loqate) to reduce information input too.

Flexible Shipping Options

Ecommerce shipping and delivery logistics should by far be one of the most important elements of your customer retention strategy because you need to ensure your products can be delivered to customers in a timely and satisfactory manner.

Choosing logistics partners means ensuring that they meet the standards you yourself would expect as a customer, including a warehouse with fast pick and pack turnaround and speedy couriers. The shipping and logistics solution your choose will be very much dependent on your business model, turnover etc, but some great integrated solutions our clients use, include:

  • Temando

  • UPS

  • ILG

  • BrightPearl

  • DHL

  • DPD

Whilst these are the most common, as part of your customer retention plan, you should also research delivery options per country and offer those in the relevant Magento Store View. For example, Postnord is a popular delivery option in Sweden and Denmark, so you’d only show this as an available option for those store views. 

Offer Different Payment Options

You should also offer a variety of payment options to improve your customer service levels and loyalty – the easier and more flexible payments are, the better! Checkout payment options you could offer to improve customer retention, include:

  • Klarna’s pay after delivery

  • Magento’s out of the box PayPal or Braintree integration

  • American Express (growing in popularity in the UK!) credit card payments

 Your Email Marketing Strategy

It’s important to remember that as part of your email marketing and customer retention strategy, that engagement does not end once the customer has completed checkout.

Following up with the usual order confirmation, shipping notifications etc is part and parcel, but you should also ensure that your customer is on your emarketing subscription list, so that you can stay in touch with them, offer discounts and promote new collections.

Returns Made Easy

A patchy returns process can put customers off from shopping with you on your ecommerce website again.

Make sure your logistics partners have a streamlined product returns process to support your customer experience. Whether it’s a collection at the customer’s location, return in store or drop off at a collection point, it should absolutely be free and as easy as possible. 

Use customer data to generate sales

Learning from and about your customers is key to the growth of your ecommerce business and collecting customer data should play a key part in the retention strategy. But it’s not just customers as a whole group, it’s the individual customer.

By personalising your ecommerce website using tools like Nosto, you can target individual customers and ensure they keep shopping with you. If they like black dresses, for instance, your communication strategy for them should be about that or you could integrate learning technology onto your website to track which products they click on and merchandise those on the top rows of your category page to reduce friction.

TOP TIP! Encouraging easy to do customer reviews using TrustPilot’s solution is a great way to learn more about your customers and what they think about your products/services.

In summary, customer retention is all about:

  • Knowing your customer

  • Engaging with customers in a relevant way

  • Providing a convenient and fast user experience

  • An ecommerce website that offers what your competitors don’t

Retaining your current customers makes the running and growth of your ecommerce business much easier, so it is crucial to focus on customer retention and build a strategy that works for your brand.

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