With growing competitive pressure in the booming European e-commerce sector, customer loyalty is becoming increasingly important for companies. Well thought-out customer management helps to strengthen customer relationships, identify sales potential and improve processes – but what is it that you need to consider? We provide you with advice for successful customer management.
One thing is certain: whether the availability of goods, the offer of various payment methods or transparent shipping communication is concerned – the demands that e-shoppers have regarding their shopping experience are rising and it is becoming increasingly difficult for companies to stand out from the competition.
According to the latest Customer Experience Excellence Study 2021 conducted by the consulting firm KPMG, the top ten e-commerce performers in Germany, such as OTTO or the drugstore chain dm, have seen a twenty-fold increase in sales over the past five years compared to the bottom ranked companies. Alas, what have successful companies done better than their competitors? We take a deep-dive to answer this question.
Customer Centricity: Using data-based recommendations
Today, a popular product range and attractive prices are no longer enough to set a company apart from the competition. The customer and their loyalty are therefore increasingly moving into the focus. Marketing experts speak of customer centricity. In this context, efficient customer relationship management based on the collection and analysis of data forms a reliable basis for action. With the help of an innovative CRM software solution and AI-based analysis tools, retailers can gain a valuable overview of the growing flood of data. Individual customer behavior, purchasing preferences, and demographic data are recorded and analyzed, and consumers are assigned to predefined types and profiles. Internationally active companies are thus able to gain an accurate overview of their customers, identify their needs and ultimately serve them. To benefit from customer data analysis and realize sales potential, managers should continuously maintain – and evaluate – the information collected.
Focus of customer management: Hyper-personalization
Although e-commerce providers do not meet their customers face-to-face, the trend in the highly competitive online environment is increasingly shifting towards individualization and personalization. However, the latter entails much more than sending e-mails in which the customer is addressed by name. Today, we talk about hyper-personalization: in this context, specific measures such as tailored and personalized offers or targeted services using various tracking options and goal-oriented A/B testing are becoming increasingly important.
The fact that personalization has the greatest influence on customer loyalty is also confirmed by the KPMG study. The evaluation of more than 72,000 responses showed that the following aspects are particularly important to customers when it comes to personalization:
– Regular and transparent communication
– Unobtrusive support
– Goodwill in case of concerns
– Outstanding and tailored advice
– Personal contact for questions
In summary, communication skills and professional competencies of a company are essential. In addition to the customer experience, which is already defined during a one-time online purchase, the probability of long-term customer loyalty also increases. International retailers can achieve the latter, for example, through bonus/loyalty programs or newsletter content with discount coupons or free gifts.
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Cross-border logistics: Creating time-saving and transparent processes
In view of the increasing number of online orders, retailers should also take a critical look at their handling processes and leverage optimization potential. Against this backdrop, the participants in the KPGM study prioritize clear structures, lean digitalized processes and uncomplicated delivery of ordered goods.
In customer interaction, unnecessary technical, procedural and bureaucratic obstacles should therefore certainly be a thing of the past. Internationally active retailers are well advised to handle customer concerns of all kinds quickly and easily via various online channels.
In this context, transparent shipping communication is crucial. A cross-channel exchange of details that provides transparent information about delivery times, shipping status, and costs is indispensable. Alas, a one-time shipment notification with tracking number is no longer sufficient. International companies that want to improve customer relations in the long term should instead provide real-time information when the delivery status changes. In fact, those who transparently communicate possible delays due to interrupted supply chains caused by the ongoing Corona pandemic are most likely to gain the buyer’s understanding.
One way to process orders even faster is via so-called micro-fulfillment centers: Those are usually vacant spaces equipped with automation technology. According to industry experts, these small warehouses increase the response time and profitability of companies.
Customer Management: Problem-solving competence is of growing importance
Defective goods, delivery bottlenecks, shipping delays: Even with the most efficient processes, problems can occur. To strengthen customer loyalty nonetheless, online retailers are well advised to satisfy buyers as quickly as possible. Important success factors in this context are rapid problem resolution and good accessibility. Against this background, it is advisable to offer customer service via various channels. A stand-alone telephone service hotline has long since ceased to be sufficient. Today, internationally active retailers should be accessible via contact forms, e-mail and social media platforms such as Facebook or Instagram and work together with the customer to solve the problem.
Chatbot communication also has clear advantages in this context: Results of the current Chatbot Study 2021 by the German debt collection company EOS reveal that 60 percent of the European companies surveyed from 14 different countries recorded increased satisfaction among employees and customers thanks to chatbots. The bots mostly handle small-scale routine tasks and relieve customer service of the time-consuming task of answering recurring questions. A win-win situation for buyers and online retailers. Surprisingly, more than 40 percent of German consumers don’t care whether they communicate with a chatbot or a human – as long as their intent is resolved.
Mobile commerce: From augmented reality to live shopping
An increasing number of people are shopping via smartphone. The enhanced convenience and service creates a huge, dynamically growing revenue potential for retailers. According to the “Online Monitor 2021” study by the German Retail Association (HDE), the majority of online sales in Germany in 2020 were generated via mobile devices. Shopping using a smartphone primarily replaced shopping via a PC/laptop, according to the findings.
Marketing experts see shopping apps in particular as a success factor in e-commerce: In addition to the improved accessibility of the young target group Gen Z and Millennials, augmented reality (AR) applications achieve an unprecedented shopping experience. With the help of this computer-aided enhancement of reality perception, customers can, for example, have furniture displayed virtually in their living room.
Another trend that is just gaining a foothold in Europe is live shopping. In China, shopping via live streams on the Internet is already a billion-dollar market. The marketplace OTTO, one of the top-selling online retailers in Germany, dared its first test run in October last year. With more than 32,000 viewers (live and in the follow-up) and an average view time of six minutes, the first trial was quite a success, according to the Hamburg-based group. Viewers were also able to ask the team questions via a chat function.
Customer experience as a success factor
A positive customer experience is the key to customer loyalty and revenue growth for e-commerce vendors. Achieving these objectives requires fully comprehensive customer management solutions. In addition to technical sophistication such as data-driven approaches, live shopping, or AR that lead to an enhanced shopping experience, it also involves satisfying increasing customer needs and demands. Online retailers should actively use existing data to serve these needs and thus subsequently successfully differentiate themselves from their competitors.
Please click here to access the entire KPMG study “Customer Experience – What counts for customers” after entering your contact details.