How do you grow your online revenue? Columnist Jordan Elkind takes a look at what some fashion retailers are doing differently to bolster their e-commerce growth.
E-commerce is a rapidly expanding piece of the retail pie, so it’s no surprise that online growth is top of mind for fashion brands.
While almost every retailer has launched an e-commerce platform, certain retailers are quickly emerging as industry leaders.
The recent Custora E-Commerce Pulse: High-Growth Fashion Index analyzed data from a sample of these retailers to understand how they grew annual revenue by 28 percent on average in 2014, double the e-commerce industry average of 14 percent growth for the same period. (Disclosure: Custora is my employer.)
While every marketing team is different, there were some common trends among these high-growth brands. Here are four things I learned from this report:
1. There Is No Best Way To Grow
Most companies have an acquisition plan they swear by. Some teams aim for volume, acquiring as many customers as possible regardless of purchase size, while others prioritize order value, leaving the number of customers as an afterthought.
Unsurprisingly, it turns out that the best strategy requires a delicate balance of these two schools of thought: increasing both the number of customers and the average spend per customer.
To achieve this goal, leading companies are turning to predictive Customer Lifetime Value (CLV). Rather than relying solely on return on ad spend (ROAS), they focus on acquiring the customers that will be most valuable over their lifetime.
Using predictive metrics, these companies are able to rapidly identify their best customers and understand what makes them different. By shifting their acquisition dollars toward customers with a high projected value (rather than those with large first purchases alone), they ensure a large and healthy customer base at every lifecycle stage.
2. Foster Loyalty Early
It’s practically marketing gospel that retaining customers is cheaper and more effective than acquiring new ones, but many retail brands are still stuck with hordes of one-and-done customers, especially around the holidays.
Retailers with sustained growth understand the importance of fostering loyalty as early as the first purchase. This means optimizing acquisition to focus on customers more likely to repeat and shaping their customer journey.
To build a smooth customer roadmap, people at different points in their lifecycle need different messaging. Most retailers are differentiating between new customers, active customers and at-risk customers.
The best retailers are studying these stages on a predictive level, automating triggers and segmenting their messaging. One of the most impactful strategies is to predict CLV and roll out the red carpet for future top spenders.
If there is one thing you should learn from these retailers, it’s this mantra: Send the right message to the right person at the right time.
3. Uncover Customer Insights… And Take Action
While data warehouses are nice, they’re useless unless you can find actionable customer insights. Top retailers are breaking down data silos and leveraging their data to better understand their customers and improve their communication.
A deeper knowledge of your customers can chart the best, and sometimes surprising, course for marketers. Top retailers are constantly working on the right email frequency for their customers, and they’re finding that for some customers, it’s way fewer (or more) than expected.
4. ABT: Always Be Testing
At this point, I’m sure I sound like a broken record, but this is the crux of digital marketing. Every retailer is different, so there is no “one size fits all” approach to marketing.
You need to be testing and measuring continuously with new channels, creatives and campaigns. One thing that we consistently heard from high-growth retailers was, “We measure everything.”
E-commerce growth will be a major brand differentiator in the next few years, so it’s crucial to focus on strategy now.
Retailers that are already growing twice as fast as the rest of the industry focus on using their data, uncovering actionable insights, personalizing communications and testing constantly.
Some opinions expressed in this article may be those of a guest author and not necessarily Marketing Land. Staff authors are listed here.
(Some images used under license from Shutterstock.com.)