How to improve multichannel order fulfillment
Going multichannel is an important step for any growing ecommerce business. Whether you start on Shopify, Etsy, BigCommerce, or your own direct-to-consumer store, diversifying to other channels allows you to spread risk, find new markets, meet new customers, and secure your business against changing platform requirements. At the same time, that diversification can introduce a nightmare of logistics issues. Selling through multiple channels can mean overselling, needing overstock to prevent overselling, and other warehousing issues. You might quickly find that your job changes from store manager to warehouse manager. Taking steps to streamline the process will save you time, reduce inventory management headaches, and ensure your customers have a consistent and positive experience – no matter which channel they buy from. In this article, we’ll talk about leveraging outsourced solutions, mastering your distributed order management data, and other fulfillment best practices. [tip]Related reading: 4 tips for Shopify Plus merchants selling internationally.[/tip] Leverage outsourced solutions As your ecommerce store scales, you’ll have to make a decision between investing in inventory and order fulfillment infrastructure or outsourcing it. For most small-to-midsize stores, outsourcing is the way to go. It’s cheaper thanks to economies of scale, faster thanks to enhanced efficiency, and scalable thanks to wider warehouse networks. Many ecommerce organizations don’t have the budget or the resources to set up a fulfillment and distribution network. Relying on a partner that specializes in fulfillment enables you to quickly leverage infrastructure to enable the kind of fast, traceable, and reliable order fulfillment your customers want. Third-party logistics providers Third-party logistics (or 3PLs) include a range of services—all basically amounting to paying for logistics as a service. Often, this includes warehousing, pick and pack, fulfillment, and returns handling. 3PL providers may also maintain a network of geographically distributed warehouses, allowing them to ship products from closer to the point of order. In other cases, they’ll use their own shipping networks as well. 3PLs also offer other advantages, like: Existing warehouse management software and infrastructure Shipping volumes high enough to offer negotiated postage rates from shipping providers Integrated order tracking with automated pick and pack and warehousing management Affordable packaging and labeling capabilities The ability to meet packaging requirements per channel – e.g., Amazon boxes for Amazon sales and Walmart boxes for Walmart sales. Of course, not all 3PL offer the same services. Not every provider will offer a good trade-off between control of inventory and costs. However, you can research and choose an option that suits your business well. How to find the right fulfillment partner Your fulfillment partner should be a partner to your organization. This means they should be able to adapt and make changes for your business, should meet all existing needs, and should have a growth plan in line with your own. In addition, you’ll want to look for: A warehouse management or inventory management system that integrates into your own software solutions AND sales platforms Order tracking capabilities in every market you sell in Support for features/offerings you need (geographic locations, type of inventory, certifications, returns, etc.) Flexible order fulfillment options (so you can offer different types of shipping, different packaging, etc.) Packaging and labeling options (for custom branding, packaging inserts, discounts, return labels, etc.) Data-driven inventory management/analytics (so you can see costs, rate of sale, inventory flow, etc., to better inform your own inventory automation and planning You’ll also want to look for an organization that is communicative, able to respond to your growth, able to adapt features to meet your needs, and otherwise able to be a partner rather than solely seeing your business as another revenue stream. [tip]Littledata provides accurate and deep analytics on every aspect of your store, from the customer journey through to fulfillment and subscription order tracking.[/tip] Marketplace fulfillment solutions In addition to 3PLs, many marketplaces provide their own fulfillment solutions exclusively for purchases made on their platforms. Of these, the most popular comes from Amazon. Fulfillment by Amazon Fulfillment by Amazon (FBA) is Amazon’s in-house logistics service, which operates globally and is famous for lightning-fast delivery speeds. In addition to excellent customer experience, FBA provides advantages when selling on Amazon. Quality guarantees, boosts to product visibility in search, Amazon returns, and the ability to easily expand to a global market are just some of the benefits. For example, FBA listings can get the Prime badge, indicating the fast fulfillment speeds that consumers look for. However, whereas many 3PLs can accept shipments directly from your manufacturer or provider, Amazon has specific packaging and labeling requirements, so you’ll still have to be hands-on about FBA prep. Master your inventory management While a 3PL will cover fulfillment, you’ll still have to stay on top of inventory and order management. Doing so means adopting good software, deciding on an order management system, and optimizing that over the long term. While there are many options for managing inventory across multiple sales channels, you’ll normally either have to choose between splitting that inventory or using software to synchronize sales in as close to real-time as possible. To split or not to split inventory Splitting inventory is the process of creating a separate inventory or stock per channel you sell on. In some cases, this can be a good idea. For example, if you make sales on Amazon using FBA, you might run into FBA stock limits, especially during the fourth quarter. In addition, stockout events could harm your listing. Plus, if you don’t utilize Amazon’s multi-channel fulfillment solution, FBA only ships to Amazon. In this case, retaining at least some stock to ship from your own warehouse or another provider would be a good idea. You can sell at a higher volume than FBA allows – while preventing selling out of product. In most other cases, it doesn’t make sense to maintain separate inventory pools for each channel you sell on. Separate inventory pools increase costs, add overhead cost calculating delivery per channel, and increase complexity—aka the likelihood of things going wrong. For example, if your product sells more quickly on Walmart Marketplace than eBay, your product could sell out on Walmart. You’d lose sales while more inventory sits, unused, in your warehouse. Similarly, if you’re splitting inventory, you have to buy for peak sales across all channels – meaning you’ll overstock. If something goes wrong or the product loses popularity, you’ll be stuck with a lot more dead stock. For this reason, split inventory is generally avoided unless it has a practical purpose, like trialing a new channel or supplementing FBA. Utilize distributed order management software Distributed order and inventory management software is built to handle the needs of multichannel sales. Often, that means automation that uses API to synchronize inventory across channels – so sales show up in your central inventory management near real-time as possible. Here, tools like Flxpoint offer centralized product and inventory management complete with order fulfillment processes, automation, and data integration for both suppliers and sales platforms. Flxpoint also offers custom price points, categories, and product descriptions per channel, distributed order management to automatically select the warehouse nearest to the customer, and purchase order management with automation linked to total product stock. Tools like this allow you to track sales across channels – ensuring that you don’t oversell – by synchronizing and automating data import/export. When a product sells on Amazon, it updates the central inventory via API, which is then pushed out to update available inventory on all other channels. So, available inventory is always up to date. That same centralization also adds value in direct fulfillment, where orders are pulled into a centralized system and can be managed in one place. Even if you’re running your own warehouse, you can see everything in one location, making it less likely that you’d miss sales going through a less-busy channel. Eventually, that improves your full order fulfillment process, allowing you to get in control of incoming/outgoing, stock, and actual sales data across every channel. Keep an eye on sales trends A good order fulfillment solution and good inventory management software will solve most of the problems you might have with multichannel inventory management. However, there’s always room to improve by auditing sales and acting on predictive trends to optimize your logistics. Audit your sales regularly. Taking the time to understand where sales are actually happening can help you to optimize your warehousing and order fulfillment options. For example, if you know that one product most often sells on Amazon, you could move it to FBA. If you rarely sell it on Amazon, moving it out of FBA could save you significantly while improving your Inventory Turnover rating. If you know where sales are coming from, you can optimize fulfillment for that channel, that geographic location, and more. [tip]Tracking sales trends is easier when you have the right tools, like Segment's robust data reporting source which reports sales data along with detailed insights.[/tip] Invest in a cohesive buyer experience While many channels don’t require that you offer fast shipping, it’s important to offer a cohesive experience across every channel. Customers often research and look up brands across multiple channels. If you offer free 2-day shipping with Amazon Prime, most customers will choose that unless you also offer free 2-day shipping on your other website. That holds true for other aspects of fulfillment like shipping options, free shipping thresholds, customer service offerings, return offerings and other aspects. These should be as cohesive as possible across every platform you sell on – because you’re building a brand not just meeting platform requirements. Wrapping up – streamline your multi-channel fulfillment for better results Ultimately, the key to good multichannel order fulfillment is having all of your inventory management in one place, having good infrastructure with which to support that, and ensuring you have traceability between orders and delivery on every platform. Utilizing a 3PL partner and implementing multichannel inventory management software will get you most of the way there – however, you’ll still want to invest in data management so you can make smarter decisions with that centralized data. Rachel Go is a content marketer and strategist at Flxpoint, an enterprise ecommerce operations platform. Flxpoint enables merchants and brands to unify and automate every aspect of your ecommerce operations, and scale without manual processes or custom development slowing you down.
How Littledata Helps Velir Shorten Time to Value and Improve the Odds of Project Success
How to protect your ecommerce website from cyber threats
Among the many positive things to have increased online since 2020, like entrepreneurship and ecommerce demand, cyberattacks unfortunately remain among the negatives to have increased as well. In fact, the average cost of a single attack increased in 2021 to $4.24 million per breach — in total costing the global economy around $1 trillion. While some companies—ecommerce merchants included—have searched for skilled developers to beef up their cybersecurity, McAfee found in 2020 that only 44% of companies had a response plan ready in case of an attack. With the ecommerce industry continuing to see record growth, strategies on how to protect not only customers but online stores as a whole from cyberattacks have become must-haves for store owners. Below we will discuss why cybersecurity is an essential part of a successful ecommerce website, the most common types of cyberattacks, and learn about the possible solution your business can implement to withstand cyberattacks. Why cybersecurity is important for the ecommerce industry It’s hard to overstate the importance of cyber security because so many things depend on it. Beyond vulnerable company information, your store also holds data on credit cards and other sensitive customer information. The frequency and severity of data breaches have significantly increased since the COVID pandemic, as most companies moved fully remote. IBM found when remote work was a factor in a cyberattack, the cost of the damage increased by $1.07 million compared to attacks when it was not a factor. You might already be familiar with some of the most high-profile cyberattacks, like when hackers gained access to Microsoft and the US Department of Defense’s SolarWinds servers, giving them remote access to users’ devices and sensitive data. In 2020, hackers exposed almost 500,000 Zoom accounts and posted them for sale on the dark web, including customer emails, passwords, personal meeting URLs, and even host keys. Taking everything into account, it’s clear how essential it is to pay attention to cybersecurity and not underestimate the dangers of poor cyber protection. Building a dependable cybersecurity infrastructure brings peace of mind to both your store and your customers. Cybersecurity threats for ecommerce websites Cyberattacks can take on many different disguises, but here are a few of the most common to keep watch for. Financial fraud Financial fraud happens when a hacker accesses your bank account, meaning they can steal money directly or use it for illegal purchases. This kind of fraud also takes place when hackers create fake return requests, leading stores to spend heavily on fraudulent delivery charges. To prevent financial fraud, it’s important not to allow any customer credit card or bank information to be visible at any step in the buying process. Phishing Phishing has long been one of the most popular types of cyberattacks. This kind of fraud uses mass email campaigns with senders pretending to be a legitimate website—most commonly a popular brand or even a social networking site. The emails are designed to trick recipients into entering sensitive data into a fake login or form, handing hackers access to whatever sensitive information lies behind the profile login, and in some cases even bank account details. The best way to help your team avoid this problem is by teaching them how to distinguish fraud messages from legitimate emails and avoid opening them. SQL injection Hackers use an SQL injection—or an injection of malicious code to a website—to get access to a database, then change records or steal sensitive data from it. This type of attack most commonly occurs using a malicious form or link. Because SQL injections pass through existing security measures, they allow hackers to modify, move, or even delete data from your database. Malware and ransomware Malware is a virus that hides in plain sight, pretending to be a legitimate application. Relying on undetectability, they give hackers access to a device and provide a pathway to steal sensitive data. Ransomware specifically is a type of malware that limits or locks users completely out of their access to files—and in some cases, an entire device or network—until the victim pays a ransom to the hacker to remove it. Using a good firewall is a strong deterrent for malware, and it never hurts to add a malware-checking program like Malwarebytes to scan your device for existing viruses. Designated Denial of Service (DDoS) attack DDoS attacks flood a victim's website with requests, making it impossible to access. Regular DDoS attacks can harm a website’s reputation and, in turn, the amount of real traffic it receives. Using a DDoS protection service, like Cloudflare, is the best deterrent here. E-skimming The attacks listed so far are common for many different kinds of websites, but e-skimming is the most popular among ecommerce websites. This occurs when hackers add skimming code to the payment processing page of a store. When a customer enters their payment details on the checkout page and proceeds with payment, hackers capture the information, including all personal data, card details, and account numbers. Preventing e-skimming comes down to keeping your store’s software up to date and strong data management, which we’ll touch on again later. Cross-site scripting Hackers use cross-site scripting attacks (XSS attacks) to insert malicious scripts into websites. These scripts can extract sensitive user data that must be protected by the web application. Often, these scripting attacks are not used for theft exactly, but instead to find out if a website has any vulnerabilities. Cybersecurity solutions to protect your ecommerce website Now that we're aware of the threats, the first step toward protection is done. Next, we need to know how to protect our ecommerce websites and keep both our stores and our customers safe. Here are some of the easiest—and most effective—prevention methods you can use to protect your store. Secure payment gateway If you want to keep your clients’ payment data secure, it’s best not to keep that information in your own database, unless you are sure you have strong security protecting it. Instead, use options like PayPal, Stripe, or Shop Pay, as they have invested in high levels of security for their databases. Multi-factor authentication Multi-factor authentication (MFA) helps keep user data safe by requiring not only a password to log in but additional information only the true account owner would have. Some of the most popular options for MFA include fingerprints, one-time passwords, and authentication codes. SSL certificates Adding an SSL certificate to your website (aka getting the https:// instead of http:// in your URL) encrypts all information shared between your website visitors and your store website. It’s not only essential to avoid browser-based warning screens telling visitors your site may be unsafe, but also helps to decrease the chances of fraud and other cyberattacks on your site. DDoS mitigation DDoS mitigation services like Cloudflare (mentioned above) protect your website from possible DDoS attacks by using specific network equipment connected to the cloud. This helps offload the effect of a DDoS attack to keep your site up and running. Data backup One of the best ways to protect your data is by backing it up regularly. It’s safest to do this on a separate server not located in your company’s office. It’s also a good choice to automate your data backups so you don’t lose anything in case of an emergency. Device encryption Keep your devices updated to the latest software version and encrypt them for better security. The keeps your devices ready and ahead of new potential threats and cyberattacks. Some devices have symmetric encryption that uses one key for the encryption. Using an asymmetric key increases the level of security of your device. Wrap up For ecommerce companies, protecting clients' data is essential. The more secure your store, the more trustworthy you are to any customer. Remember, being aware of the cyber threats described in this article is just the first step. Once you’ve educated your employees on cyber protection, prevention by backing up data, enabling website encryption, and using secure payment methods, should be high priority items for any store that has not already taken care of security. This is a guest post from Iryna Bilyk. Iryna is an expert content marketing manager at YouTeam — a marketplace for instant engineering team extension. She passionately discovers and writes about technology, innovations, and software development solutions.
How to win with subscription selling on BigCommerce
The era of subscriptions is upon us. Subscriptions are the fastest growing sector in the ecommerce industry and show no signs of stopping. If you’re not selling by subscription yet, now is the time to start. If you are selling by subscription, make sure you’re using the right tools to get the best return on your efforts. Recharge is the leading subscription payments solution to help launch and scale your subscription business on major ecommerce platforms like BigCommerce. Subscriptions help you build meaningful relationships with your customers; Recharge empowers you to make the most of those relationships. Is now the right time to start selling by subscription? The short answer? Absolutely. For a bit more detail why, we can look at a few industry statistics and trends. First, market projections point to the subscription ecommerce industry being worth over $246 billion by 2025 — a greater than 9,400% increase since 2016. Selling by subscription also provides a highly sought after benefit: consistent, recurring revenue. Having a predictable income source frees up time for your management team to focus on planning promotions, investing in future products, and maintaining inventory, all while more accurately projecting profits. What if I’m new to subscription selling? Thanks to the huge amount of growth in the space, there’s no time like the present to jump into subscriptions. In their 2021 State of Subscription Commerce report, Recharge identified that most successful subscription sellers each follow three strategy points: cultivating loyalty, offering flexibility, and choosing the right key integrations. Incorporate these traits into your store, then carve out your niche in the market. Compete on speed, agility, and innovation and you can challenge existing top brands with new, innovative products that make your store unique. Boost retention with flexible BigCommerce recurring billing Customer retention is key to the success of any brand—but for recurring revenue businesses, it’s particularly crucial for maximizing the benefits a subscription business model has to offer. You can increase the lifetime value for your BigCommerce store by reducing churn with Recharge’s subscription payments solution. With Recharge, you can: Reduce churn by allowing customers to freeze deliveries or edit their delivery scheduleAdd special one-time purchases and product swaps so customers get exactly what they needEmploy strategies to improve payment conversions and avoid involuntary churn, such as automatic payment retries and dunning Create custom workflows with powerful APIs What kind of subscription experience do you want to create for your customers? Whatever your vision, Recharge’s APIs help you make it a reality by allowing you to create workflows to customize your subscriptions as much as you like. Looking to incentivize shoppers to sign up for a subscription? Create a free trial workflow. Trying to increase AOV? Build a workflow that offers free shipping once customers hit a set minimum purchase amount. You can even customize the perfect customer portal for your online store. If you’re serious about subscription analytics, though, data and reporting will play an essential role in your success. Measure your performance with data and analytics Data-driven decisions are the most critical part of any strategy toward scaling and growth. Thriving ecommerce businesses depend on accurate analytics to assess customer acquisition strategies, inventory orders, potential product launches, and everything in between. Recharge’s analytics features give you greater insight into what your subscribers want and need so you can meet them where they are and achieve your goals. With Recharge’s enhanced analytics suite, you can: Assess the health of your BigCommerce store through key performance indicators like AOV, LTV, and churn rateAnalyze different customer groups using cohort selection capabilities so you can fine-tune your business strategy to better meet customer needsBuild dashboards to track trends in revenue and visualize your performance in new ways Advanced tracking and reporting in Google Analytics Littledata’s Recharge connection for BigCommerce is an advanced tracking solution for any merchant using GA to get granular data about subscriptions, customer behavior, marketing and customer lifetime value. Once activated, it unifies data in the background using webhooks from BigCommerce and Recharge. Littledata makes it easy and convenient to do Recharge subscription analysis in Google Analytics by setting up dedicated views for first and recurring subscription orders placed via Recharge checkout. Plus, it’s a flexible data platform. Many Recharge merchants use the data Littledata sends in connected tools such as Glew, Tableau and Data Studio. The connection is a plug-and-play solution for advanced analytics, letting you: Automatically track one-off purchases, first-time subscriptions and recurring transactions in Google AnalyticsCalculate marketing attribution for subscription revenueTrack browsing behavior and the check-out funnelImprove marketing attribution with Littledata’s unique combination of client-side and server-side tracking Tip: Learn more about how to take a data-driven approach to subscription commerce in Littledata’s Ultimate Guide to Subscription Analytics. Ready to get started? With the subscription selling market continuing to surpass growth milestones and consumer demand for subscription products skyrocketing, now is the time to establish your subscription selling channel and claim your share of the market. With Littledata and Recharge for BigCommerce, you can make that leap with the tools to power success now and in the future. It’s easy to install both Littledata for BigCommerce and Recharge for BigCommerce from the BigCommerce Apps Marketplace. Once installed, Recharge opens within your store (or you can access it via Apps and selecting Recharge Subscriptions). You’ll automatically be on Recharge’s Standard Plan with the Advantage support plan. Visit the Recharge pricing page to see what’s included in your plan, and to learn more about the Recharge Pro Plan or the Enhanced support plan. This is a guest post from our friends at Recharge.
9 Best Ecommerce Metrics to Track to Boost Your Sales
Starting up an online store is pretty effortless today. With convenient and inexpensive ecommerce solutions like Shopify, Magento, or Wix, anyone can create a clean-cut online store — even without coding skills — in a couple of hours. But few businesses can ultimately hope to square off with global retail giants like Amazon or eBay. One reason is ineffective and non-scalable business processes. Ecommerce profitability correlates strongly with a seller’s forethought and flexibility. Setting pricing, adding loyalty programs, choosing promotions, managing stock items — the more you control the details, the more predictable your revenues are. The best way to get the information you need to manage those details is by choosing the right metrics to monitor. In this article, we’re going to explore them and give you some practical optimization tips. How to determine which metrics matter for your business Your store’s size and the stage you’re at in its lifecycle will inform which specific metrics you need to pay the closest attention to. As an example, for a small store just starting out with a relatively low number of clients, it may be too early to obsess over average order value or customer lifetime value. On the flip side, for ecommerce giants that launch expensive advertising campaigns and spend millions handling sales and marketing teams, all types of “returns on” metrics may be key to consider. Choosing your “just-right” set of ecommerce indicators comes from experience. It’s neither a good idea to confine the number of metrics to one or two, nor to track several dozen benchmarks without a clear strategy. Likewise, poor analytics drawn from inaccurate data won’t provide enough information for you to make smart business decisions. Before you dive into the “universe” of ecommerce metrics, track where your store’s performance currently stands using the items below: Website trafficTotal number of conversionsOperational expensesAd expensesAbandoned purchases These are the minimum data required for calculations. With these figures, you can define 3 groups of metrics: Gross (e.g. revenue or profit)Mean values (e.g. an average value of the order)Percentages (e.g. returns on advertising expenses) What are the key metrics for retail ecommerce? The nine indicators listed below fit any type of online retail business, regardless of size or industry. You can calculate these metrics as soon as you're done reading this article using Google Analytics or your preferred data reporting tool Total Sales (and Total Revenue) Revenue is the income from selling goods and services. In financial reports, it’s often referred to as a “top line” indicator. Revenue fluctuation reflects the pace of business development and proves that your company can generate profit, making it good for investment. In terms of accounting, sales may be either equal to revenue or simply one of its components if you have additional revenues from supplementary operations. Overall, this metric is a strong high-level indicator of growth and stagnation for your store. Conversion Rate (CR) A conversion is when your lead takes a specific desired action that you’re tracking. Store owners can treat conversions as certain events, such as a click on the “Book a call” button or filling in the contact form. In ecommerce, conversions most often mean the act of purchasing. However, the “total” conversion consists of several subsequent actions, each of which can be monitored separately: Adding an item to the wishlistAdding an item to a shopping cartProceeding with a shopping cart to a checkoutFinalizing payment Conversion Rate is calculated as the number of conversions to the total number of online store visitors. It’s a good metric to judge how relevant your website traffic is. You may have many unique visitors, but if the majority of them leave without a purchase, start investigating your ad targeting and lead generation to make improvements. Average Order Value (AOV) AOV shows how much your leads spend on a single purchase, making it a good indicator for use in revenue predictions. All else being equal, growing traffic will positively influence your total income. But what's more important, AOV shows how commercially successful your product assortment is. If the dynamics for an average order value are negative, it’s time to review your product assortment and pricing strategies. There are some common tactics to increase AOV, and most target actions in the checkout: discounts, upselling, cross-selling, free shipping, and others. You can track checkout actions as well to get an even more complete picture and improve your AOV. Purchase Frequency This metric shows how many times an average customer buys something at your online store within a given period of time. To have meaningful value, you should calculate the metric for a considerable time frame — like six months to a year. Purchase frequency shows the share of repeat customers, as well. If the indicator is greater than 1, it means every lead makes more than one purchase in your online store, on average. Customer Retention Rate (CRR) Aside from acquiring customers, another big issue for ecommerce businesses is retaining them. That’s because nurturing existing clients is much cheaper than gaining new ones. The higher the retention rate is, the fewer expenses a company will need to impose to maintain and increase revenues in the future. You can use various techniques to re-engage online store visitors, with email marketing being one of the most popular retention channels. Create a sequence of nurturing emails or refer to drip campaign examples, e.g. ones by Snov.io, and send out interesting mass emails to clients. These may be assortment updates, reminders, special offers, or exclusive deals. The goal is to keep leads engaged and stay top of mind to drive sales. Customer Lifetime Value (CLV) CLV shows how much revenue a lead generates during their entire history as a client. In other words, this is a predicted sum of money that a customer will spend on products or services. CLV is closely connected with returns on acquisition expenses. If the lifetime value doesn’t cover and (ideally) exceed acquisition costs, the business won’t be profitable in the long term. You can determine CLV in a couple different ways: 1. Cohort analysis Divide your clients into groups with similar characteristics, e.g. upon the time they made the first purchase. Then, calculate the average revenue per user, per every cohort. 2. Individualized CLV Rather than calculating aggregated indicators, you can measure CLV for individual customers. This method requires more time, yet is more precise. Cart Abandonment Rate This metric shows the share of uncompleted shopping deals. An abandoned online shopping cart means your customers picked out items but left the website without purchasing them. Obviously, the higher the rate is, the more potential revenue you’ll lose because of an unclosed funnel. Users may be unable to complete the purchase due to technical issues, e.g. when the link to the checkout page doesn’t work, or due to the nature of goods.So, it makes sense that online stores selling luxury items have, on average, a higher cart abandonment rate than grocery stores. Although it’s impossible to reduce this metric to zero, keep it at 40% or lower and you’ll be in decent shape. Return on Advertising Spend (ROAS) ROAS shows the overall effectiveness of ad campaigns. It is usually calculated for different ad groups to compare the ratio of revenue and costs to earn it. ROAS less than 1 (or 100%) means a company loses money, as it spends more to acquire customers than it earns from them. Cost per Acquisition (CPA) CPA shows an average cost associated with a single conversion. CPA differs from ROAS in that it doesn’t take into account the money a company earns due to a conversion. Consider an example. An advertiser launched 2 ad campaigns and set a budget of $1,000 each. The first campaign resulted in 10 leads and $1,500 revenue, and the second yielded 10 leads and $2,000 revenue. The two campaigns will have equal CPAs ($1,000/10 leads = $100 per lead), but different ROAS (150% and 200%, respectively). Do you need to track all these metrics? It’s up to you which ecommerce metrics to track. Most of them are interrelated or complementary, so if something goes wrong, you’ll notice the issue anyway. For example, if CRR increases over time, the lifetime value and average order value will most likely increase as well. Or, at least, they won’t worsen. Small retailers that don’t run regular ad campaigns can neglect some indicators, e.g. CPA or ROAS. But as you reach a mid-sized level or plan expansion, it’s better to put analysis back on track and monitor all nine metrics. Ecommerce metrics: important questions to ask What’s the most important KPI for online retailers? Every business comes up with a unique set of KPIs, ultimately. However, CLV and Average Order Value are the top 2 metrics to monitor for the majority of retailers. How to increase conversions on an ecommerce website? First, use responsive styles for your online store. Make sure all images are well-optimized so that they look good and don’t worsen website loading speed. It’s also advisable to implement an online chat and a callback option. In the end, planning and development are impossible without frequently assessing performance. The nine metrics we’ve disclosed are basic for the majority of retailers. With these, you’ll see the big picture and have the intelligence to make informed business decisions. This is a guest post from Yulia Zubova, Outreach Specialist from Snov.io.
BigCommerce Analytics: The key metrics you need to grow
Growth is a key goal in any entrepreneur's mind. But if you’re not paying attention to the right signals, you could be stuck spinning your wheels. The big decisions you make about your business should be informed by specific metrics that show its health in different areas. Each area has its own performance indicators. Analyzing the right ones — and doing it with the right tools — lets you actualize what’s working and what isn't. As business management master Peter Drucker once said, “What’s measured, improves.” In this article, we’ll cover five key metrics that BigCommerce stores should definitely be tracking in order to fuel growth, why they matter, and how to track them. So, without further adieu, let’s jump into the data. 5 key metrics you need to grow 1. Add to cart rate What is add to cart rate? The total percentage of visitors to your store who added at least one item to their cart while browsing. Why is it important? Tracking the add to cart rate helps you get a strong overview of both your store layout and the appeal of your products. When looking at this metric in Google Analytics you can use it to deduce: How well your products stand out to visitorsIf your site design and marketing help promote certain productsHow attractive your store offerings are overall With this data, you can make changes to your store, switch up your marketing for specific products, or even cut supply to create demand for specific products. You could also try product recommendations and personalization to help improve the add to cart rate on your store. 2. Cart abandonment rate What is cart abandonment rate? How many of your visitors added items to their cart and left the store before completing checkout and making a purchase. Why is it important? Cart abandonment could stem from a handful of issues. A slowdown of the checkout process, lower prices being offered for items elsewhere, or even requiring shoppers to make an account before buying are all potential obstacles that cause visitors to leave their carts behind. Knowing how often this occurs can help you streamline your checkout process by pinpointing common dropoff points. To reduce cart abandonment, you’ll want to make the checkout process as intuitive and trustworthy as possible. 3. Customer lifetime value What is revenue per customer? The amount generated from a single customer during their entire relationship with your business. Why is it important? Understanding the lifetime value (LTV) of each customer is critical for your decision-making process. It tells you how much you should spend on attracting new customers, shows you which kind of customers to target, and gives you a benchmark to spend on retaining highly valuable customers. Once you’ve calculated the LTV for your customers, you can also pinpoint which of your products high-LTV customers want more of, and promote the ones with the highest profitability. 4. Conversion rate What is conversion rate? The number of visitors who took a specific action on your store (typically making a transaction) divided by the total amount of sessions then multiplied by 100. Why is it important? Tracking this rate helps you measure overall performance and activity on your website. It also helps you gauge if your store is set up so you meet your sales targets. And best of all, when you improve your conversion rate you’ll also automatically improve your revenue generation. Conversion rate is a flexible metric as well in that you can choose which specific customer action you want to track. It could be subscriptions, purchases, newsletter signups, coupon redemptions, or anything else you want data on. 5. Pages per session What are pages per session? The average number of pages a visitor reaches on your site during a session. Why are they important? It’s a great tool to determine how engaging the pages on your store are. Users may find certain pages due to sheer interest and captivation, then move on to recommended ones if you set your design up well. Depending on how long you can engage a single user, you can create deeper connections and drive more revenue. How to track key metrics for your ecommerce store Analyzing your data with the right tools is just as important as knowing which metrics to prioritize. As a BigCommerce user, you have a few options for where to see the metrics we’ve listed above. Ecommerce Analytics from BigCommerce BigCommerce’s Ecommerce Analytics comes included in every BigCommerce plan. Ecommerce Analytics offers Store Overview reports, Real-Time reports, Marketing reports, and Orders reports, along with other more in-depth information like Abandoned Cart and Abandoned cart recovery reports. These can offer a good baseline of reporting for your store, but to get high levels of customization and 100% accurate reporting, there is another solution. Littledata Advanced Google Analytics integration for BigCommerce You can view data through Google Analytics, the most widely used analytics platform, and ensure accurate sales and marketing data across the user journey with Littledata’s Google Analytics plugin for BigCommerce. Adding Littledata’s platform to your BigCommerce store enables you to track ecommerce events like product list views, adds-to-cart, all checkout steps, and orders/refunds. Tracking these along with each step of the customer journey is not only critical to calculating the metrics listed above but also gives you a truly complete picture of your store’s health. The Littledata app works with many themes as well, including headless setups, and utilizes more robust tracking than a GTM implementation. You can add the other apps in your data stack onto Littledata’s app as well, including services like ReCharge for subscriptions. Conclusion Your store’s health depends on your ability to track key events and metrics that offer insight into your customers’ behavior along with the success of your product offerings and marketing initiatives. The five metrics we shared above are among the most critical to monitor for your store, as they provide actionable insights that can help you tweak your store and promotion methods to drive greater revenue. Remember, though, that your data is only as good as the tools you’re using to report it. Whether you use BigCommerce’s in-built reporting tools or Littledata’s Advanced integration for BigCommerce, make sure that you’re getting a full picture of your customers' behavior and using accurate data to make decisions on the future of your store. This is a guest post from Rithesh Raghavan, Director at Acodez, a Digital Agency in India. Having a rich experience of 15+ years in Digital Marketing, Rithesh loves to write up his thoughts on the latest trends and developments in the world of IT and software development.
11 Ways to Increase Customer Retention for Ecommerce Stores
Customer retention at its simplest is the ability of a business to keep its customer base loyal. It’s also a vitally important metric — one that businesses rigorously track to see if their customers rebuy the same products, resubscribe to the same services, or continue to engage with their brand one way or another. But, keeping current customers happy is not easy — just ask an ecommerce store owner! Businesses lose significant revenue every year when customers jump ship to competitors. Why customer retention is crucial A good customer retention strategy helps a business create a solid plan for increasing customer value and nurtures the sales funnel. Focusing on customer retention can yield many benefits. Here are just a handful: Bigger growth potential - you need customers engaged and interested in your offerings to grow your business, including new products and services. Lower customer acquisition cost - always remember it costs more to acquire a new customer than to keep your current customers happy and buying. Higher customer lifetime value - making relentless efforts to retain customers creates an emotional bond that strengthens the buying relationship, which will result in a more engaged customer base. The “wow” factor - a satisfying customer experience can help boost word-of-mouth marketing, since 87% of customers share their good experiences with others. Of course, you need a well-planned, long-view strategy to nurture your customers and build strong relationships that achieve these benefits. Below are 11 highly effective strategies to help you build a customer retention plan that will boost loyalty and drive revenue. 1. Educate customers about your business One of the best things about ecommerce is that your customers’ relationship with your business is almost completely online. So, they’ll likely be more receptive to hearing about your products and services via online promotion. Not every customer, particularly first-time buyers, will be aware of what your business is all about. Likewise, their loyalty will depend on how much they know about — and trust — your brand and products. Your website, social media pages, and ecommerce store should have accessible, high-quality content that: Explains how your products are used Demonstrates their benefits Answers customers’ frequently asked questions For example, this online mannequin seller went to great lengths in making sure their website is packed with detailed information, including product specifications, reviews, a detailed company history, shipping information, their lowest prices guarantee, bestseller lists, and FAQs. All their current promotions are displayed strategically, and they even have a “Why Buy From Us” page. To excel at educating new customers, follow these basics: Keep it simple by writing your product information so it’s easy to understand. Use unique strategies for your buyer personas which vary in age, preferences, and buying behavior. Start blogging to provide education and value to customers while also explaining your products and services. Hold webinars to answer buyer questions, demonstrate how your services work, and gather user feedback to make improvements. 2. Optimize your website for user experience Now that you’ve taken steps to boost your content and educate your customers, it’s time to enhance their user experience. This goes beyond basic information — it’s all about making your online store user-friendly, easy to navigate, and memorable, which will win customer loyalty. Using one of the top ecommerce platforms, such as Shopify or BigCommerce, is the best way to achieve this. They’re designed for flexibility and offer the plugins you need to optimize your online store. To optimize your store even further, you could enlist the help of expert User Exerience (UX) and User Interface (UI) designers to shape specific elements of your website and improve its navigation. A UX designer is responsible for making sure your website will function the way it should, while a UI designer designs the appearance of your website. A great user interface and user experience both have a huge impact on any visitor’s buying decision. Just how big, you ask? Consider this: It only takes about 0.05 seconds for visitors to form an opinion about your website (and whether they’ll stay or leave) 88% of visitors are less likely to return to a site after a bad experience 75% of online shoppers admit to making judgments on the credibility of a business based on its website design The key to making a strong first impression is to always optimize, optimize, optimize. Here are a few extra things you can do to make sure your new and current customers will have a great experience navigating your site: Minimize pop-ups by only using exit pop-ups to reduce cart abandonment rate. Simplify your check-out process (this is critical!) Reduce the steps customers need to take before making a purchase (i.e. use shorter fill-out forms and minimize clicks for completing transactions.) Ensure your site loads in five seconds or less. Optimize your site design for mobile devices, as most traffic comes from them. Highlight pieces of content that are dynamic and of high quality. 3. Build a strong social media strategy According to a data collected by Statista, almost 92% of US marketers in large companies use social media for marketing purposes. These big companies spend a huge chunk of their marketing budget on paid social media ads. Source: Oberlo Facebook and YouTube are the two most popular social media platforms in the world right now. On just these two alone, you can share new products and establish a brand culture by engaging in conversations with potential customers. Whether you’re working with a social media marketing agency or running campaigns yourself, keep these strategies in mind to harness the full power of social media: Showcase your personality. Don’t just post content for the sake of it. Build a brand persona that makes it easier for potential customers to remember and recognize you. Make use of visuals. Captivate your audience by creating engaging videos, images and infographics. Use hashtags, mentions, and direct comments to monitor your customers. Hashtags serve as “identifiers” associated with your ecommerce store. The ultimate goal is to make your unique hashtags as popular as the brand itself. Form collaborations. Team up with a social media influencer your audience loves or another brand from your industry that isn’t your competitor. Collaborations can expose your store to new audiences and will also strengthen your credibility with loyal customers. Share content created by your customers. Positive feedback from your satisfied customers acts as social proof for potential buyers. Encourage your happy customers to share pictures and videos featuring your products to their social media, tagging your brand. Wild, a sustainable deodorant maker in the United Kingdom, regularly shares their customers’ Instagram photos featuring the product. This is a great example of user-generated content marketing. Just make sure you’re not violating any social media privacy policies. To be on the safe side, always let the account owner know you’re using their content. 4. Provide multiple delivery options Customers always love more options and convenience — especially when it comes to delivery. Many ecommerce stores provide same-day or expedited shipping options for customers who want to receive their orders as soon as possible. For example, this online lingerie store offers free shipping for orders over $80. That’s pretty common, right? However, they also offer free international shipping on orders over $150, as well as same-day shipping if you place your order before 4 PM EST (not including holidays). They even have a discreet shipping option that makes the package safe to ship to home or work. Making these options available will make your customers feel like they’re truly cared for. You can also consider expanding options for returns and payments, as well. 5. Incentivize customer referrals Putting together a customer referral program brings two benefits with one action; it attracts potential customers and rewards your current customers. In terms of sales potential, referral programs can be significantly more valuable than other strategies. And they’re not that expensive, either! In fact, 54% of businesses say it costs less than other marketing channels. Take for example this amazing customer referral program by self-showing rental company Showmojo. This is how it works: They give their customers a referral link When a new user signs up with that link, they immediately save $50 The customer who originally referred them also gets a $50 credit if the referral stays with ShowMojo for 45 days The customer gets another $50 credit if the referral stays with ShowMojo for 145 days Customers can repeat this referral process as many times as they’d like Source: ShowMojo By rewarding both a current and new referral customer, you build a stronger bond with both, thus increasing loyalty. 6. Use targeted and personal marketing campaigns Personalization has always been one of the strongest marketing tactics, and with good reason — the effects of putting out a more personalized message are long-term. In fact, 70% of consumers say a company’s understanding of their personal needs influences their loyalty. So, simply using your customer’s name or making that extra effort to collect more personal information can make your advertising copy, push notifications, or email campaigns more effective. Below are simple yet powerful examples of personalized marketing you can try to boost customer retention: Display personalized offers to returning visitors Change store navigation based on visitors’ preferences Send personalized emails or notifications based on customers’ behavior Sort recent products by level of interest Recommend product categories based on browsing behavior Remind shoppers of recent engagements Suggest complementary products or show product recommendations 7. Offer excellent customer support Studies have shown that only 1 out of 26 ecommerce customers will complain if they’ve received bad customer service. The other 25 will most likely just leave without saying anything. Source: SuperOffice So, if you want to acquire and retain customers, ensure you offer them the stellar support they need. What are some of the ways to improve your customer support? Build a customer care team for inquiries, complaints, and clarification. Give customers an easy way to reach you, or try using a contact center. Streamline your order fulfillment processes to reduce common problems. Actively listen to customers so you can identify issues and create a solution. 8. Start a customer loyalty program Starting a customer loyalty or reward program is as straightforward as customer retention gets. Through cashback, discounts, and other perks, you’re incentivizing customers to do business with you. Some of the effective loyalty programs that you can include in your customer retention strategy are: Exclusive deals to loyal customers Exclusive lifetime membership Coupons Cash-back offers Welcome gifts to new shoppers Rewards points for redeemable products or perks When launching a loyalty program, make sure to only adopt personalized programs that make the customer appreciate your brand. 9. Don’t just engage for the sake of it Engaging with customers becomes more real to them if you show the desire for genuine interaction. Effective communication is the hallmark of brand loyalty. Communication can be encouraged by sending text messages, surveys, and social media invites to your customers. You should also provide information on other ways they can reach out to you, but make sure you’re willing to answer those messages. Place social media icons and integrate a chatbot on your store website to make this process easier. 10. Learn more about your most loyal customers To understand more about loyal customers’ average spend and frequency of store visits, most marketers use the Recency, Frequency, Monetary (RFM) model. The metric establishes consumer behavior using those three quantitative measures to determine how customers behave when navigating through a store. Using the RFM model, you can rank a customer on a scale of 1-5. The most valuable customer is the one with the highest score in each category. 11. Use a subscription model Following a subscription (or recurring revenue) model is becoming increasingly popular in many industries, not just ecommerce. Source: Subscribed Institute Subscription models can come in many forms, and have gained traction across a wave of industries, from coffee to fashion and beauty. If you are going to commit to a subscription model, you should prepare to track key touchpoints of your website in a different way so that you maximize the value from your most important subscription metrics. Conclusion Retaining your customers boils down to one crucial goal: making your business the obvious choice for customers over anyone else. That means you should always be willing to try new approaches — as long as they help keep your existing customers coming back. Remember, it’s easier to make current customers happy than to look for new ones. What are the steps you’ve taken to make sure your customers are loyal to you? This is a guest post from Burkhard Berger, founder of Novum. You can follow him on his journey from 0 to 100,000 monthly visitors on novumhq.com. His articles include some of the best growth hacking strategies and digital scaling tactics that he has learned from his own successes and failures.
Build a website that your marketing and legal teams will both love
Subscribe to Littledata news
Insights from the experts in ecommerce analytics
Try the top-rated Google Analytics app for Shopify stores
Get a 30-day free trial of Littledata for Google Analytics or Segment