New study shows digital engagement is key to post-pandemic ecommerce customer retention

As the summer winds down, many of us are holding our breath in anticipation of another wave of pandemic-related headlines, guidelines, and obstacles to business as usual. The only thing we seem to be able to count on is change. That’s certainly the case in the retail industry, which has experienced a digital fast-forward to ecommerce as a result of COVID-19.

In our recent Future of Retail report, we took a close look at changes in consumer sentiment, behavior, and preferences to better understand the immediate and long-term impact on the industry.

What we uncovered is a huge opportunity to leverage digital channels to build long-term relationships with new ecommerce users. The opportunity, however, is coupled with a greater-than-usual risk of losing those new shoppers to churn.

Surge of mobile ecommerce shoppers accompanied COVID-19

(Read more...) orders definitely got many people experimenting with online shopping services they may not have tried before. Comparing Q1 and Q2 of this year, we saw a staggering 60% increase in acquisition from online channels for retail/ecommerce brands.

Normally, there would only be a 15% jump during this same period. Mobile acquisition is especially high with an increase of 62% in acquisition. The numbers tell us that not only are customers adapting to digital, a large number of them are engaging with brands on mobile first.

These customers are converting to ecommerce for the long haul, too, with 83% of those surveyed saying they will shop online as much or more, even after restrictions and concerns around in-store shopping are lifted.

Prior to COVID-19, retailers already knew the massive scale of mobile. The impact of the pandemic has now cemented the notion that mobile marketing is an essential part of every retailer’s long-term success.

Those without an effective strategy to engage, retain, and monetize consumers through mobile will fall behind.

New users present new challenges

There’s a downside to the acquisition bonanza: After two months, shoppers acquired  during COVID-19 have an 82% lower retention rate than those acquired during a non-COVID, non-holiday time period.

In fact, at the time we published the report, more than half of shoppers acquired during COVID had already churned.

With consumers more likely to jump ship, prioritizing mobile-first customer retention is more important than ever. Customers acquired through mobile were 10x more likely to make a purchase—and 12x more likely to make a second purchase—than users who came in through other channels.

The uniquely personal nature of people’s relationships with their cell phones means that this channel has the potential to transform a transactional engagement into something more meaningful.

Customers who invite a business into their world through the smartphone that’s with them wherever they go are trusting the brand to respect that bond.

The onus is then on the marketer to step up to the responsibility with a mobile strategy that prioritizes valuable, relevant, timely customer experiences.

Ecommerce shoppers are ready to experiment

It’s clear that people are willing to take a chance on something different during these uncertain times, as we all hunt for distraction, novelty, and entertainment while shelter-in-place rules limit options.

After all, there’s only so much binge watching that anyone can do. One in four consumers surveyed made a first purchase from at least one new brand during the pandemic. Almost all of them (95%) intend to buy again from one or more of the brands they’ve recently discovered.

Marketing recommendations that will boost ROI

Happily, marketers have the digital tools to swing the odds in their favor. Based on what we see succeeding for retail and ecommerce businesses that use the Braze customer engagement platform, here are five proven tactics to drive conversion and retention.

1. Double down on mobile strategy. Our survey data demonstrate that the new wave of mobile shoppers cannot be treated the same way as traditional in-store shoppers. Online behavior evolves more rapidly, as the new level of churn risk indicates. Mobile strategy that includes robust testing and optimization will enable retailers to deepen engagement (and return) over time.
2. Sync across channels. If your marketing team is still operating in channel-anchored silos, be aware that customers won’t hesitate to walk away from anything that feels like a broken experience. Moving between mobile app, website, email, and (eventually) in store should feel seamless to the consumer, and that’s only possible when marketing strategy is cross-channel by design.
3. Front-load customer value with thoughtful onboarding. You won’t get a second chance to make a first impression. How people engage early on gives you valuable insight into how they prefer to be treated.
4. “Opt in” is more than a check box. New users who show they want to hear more from you by opting in for push notifications have a 4x higher retention rate after 30 days. Respect the access they’ve provided by understanding and delivering on what matters to them through this attention-grabbing channel.
5. Think beyond {{${first_name}}} for personalization. Responsive messaging is relevant to the recipient because it takes their context into account. Make sure that experiences include content specific to them, or that message send timing is based on an action they’ve taken. These action-based messages can deliver up to 5x increase in conversion.
6. Use your human empathy. Consumers are nearly 2x as likely to be satisfied with a business that has demonstrated brand humanity through thoughtful messaging, and 1.7x more likely to recommend that brand to others.

Holiday outlook is lean and local

Stakes will be even higher than usual for retailers this holiday season, given the uncertainties associated with COVID and an economy struggling to recover.

Consumers are anxious, too, and many (42%) plan to cut back on year-end spending compared with 2019. Far fewer (17%) will be upping their holiday budgets.

Shoppers will be looking to take a stand with their spending, with 37% intending to stick with smaller, local retailers, and nearly half (48%) saying that support for local businesses will be a reason they’ll consider returning to physical stores.

In order to face these headwinds, it’s important for retailers to double down on mobile to set up holiday campaigns for success.

Braze data shows your mobile users are more likely to make purchases, so now is the time to run app download campaigns, experiment with in-app messages, or create cross-channel campaigns with the goal of driving additional push opt-ins.

By the time the holiday season starts, retailers will have engaged users primed for multiple messaging channels and ready to hear from your brand.

Bigger ecommerce players, then, have to give shoppers a reason to choose them.

Doing good can help with doing well: Surveyed consumers are paying attention to brands’ environmental and sustainability initiatives, as well as to how businesses are treating customers and staff when it comes to COVID-19 precautions and support.

One in four respondents (24%) said that they have dropped a brand because it was perceived as mistreating employees or damaging the environment.

For these mission-sensitive consumers, holiday messages that emphasize genuine care and empathy are likely to be better received than the door-buster madness of years gone by.

The Great Acceleration of COVID-19 has reshaped consumer shopping behavior in ways that will outlast the pandemic. Even when all brick-and-mortar doors are open, people will continue to enjoy the ease of online shopping.

Retailers must adapt strategies today using modern customer engagement practices to deliver fast, tangible results.

Those with physical footprints need to use that in-person channel to differentiate, too, with innovations that emphasize convenience and the kinds of rich experiences that digital can’t provide.

Reinventing now will lay critical groundwork for responsiveness to whatever the new year brings.