In the past few years, online shopping trends, actually online shopping trends, have changed dramatically. In the past, online shopping was limited to a few large online stores, and now hundreds of thousands of stores worldwide ship with the click of a button. As customers' confidence in online shopping and online security increases, so does the online shopping experience.
What are the main changes in online shopping trends in the past few years? We have looked at several studies and statistics from here and there. Here are our insights on changing trends and how to optimize Online shopping in Pakistan experience for shoppers who use them.
By offering mobile payments, coupons, and the option to provide shoppers with physical store location information, stores with retail outlines and online stores leverage their applications to improve the in-store online shopping experience.
No application? That's great, but at least make sure your website is mobile-friendly. It doesn't take much to make your website responsive, some plugins even let you use it for free. Consider investing money and time into the mobile online shopping experience, but if you can't afford it, try to provide shoppers with a mobile-friendly experience where possible.
Only 111 of 13 websites in the iNentures study personalized the online shopping experience based on online shopping history or browsing history, and even less personalization used in email marketing campaigns or mobile apps.
This is a great opportunity for online retailers, as even large stores are underutilizing it. Personalized marketing emails and coupons. Think about what your shoppers are buying and what this might suggest about their shopping habits. Using redirect ads is one way to get shoppers back to the store after a bit of browsing.
But content marketing is not just about writing long articles. This is also visual content. For e-commerce, there is nothing better than that. By using photography as a way to communicate with the audience, lookbooks like iVentures reviewed 65% of the site, 50% like to provide useful tips, and 61% have an online magazine or blog. This is a great way to show how products can be used best by them, and provide guidance and advice, rather than selling for strong buying to attract customers.
Explore setting up a blog and see the visual elements you can include. Don't worry too much about publishing daily, instead focus on publishing once a week, but make the content worth the wait. Highlights how to design fashion accessories, how to use products, and a curated list of special gift sharing considerations for the holidays.
Although it may be beyond your abilities to shoot product videos for all products at this time, customers need more information about the product before buying it. Many customers view the same product on a 2-3 website before buying, and displaying a video on the product page may just be the boost needed to drive sales.
Gone are the days when customers could wait a week or two for their products to reach them. Even international customers want to explore faster delivery options. This is a good trend, because soon, if not faster, everyone will deliver items in 2-3 business days. Provide a complete list of shipping options on your website, including international shipping options.
Platforms like Pinterest, Twitter, and Instagram can all help marketing efforts. In fact, according to another study, 75% of e-commerce sales are generated from these platforms.
Consider advertising on these platforms and regularly share product images and videos with your audience to increase interest. As these platforms now integrate buy buttons, the potential for using social media to drive sales will only grow.
Since trends have changed, online retailers need to continually improve their marketing strategies. Use these insights to optimize your 2016 online store and maximize your store potential.
Do you think we missed something? Leave a note in the comments with online shopping trends that we should include but may have forgotten.
That is to say, the sum that represents the cost of all the actions you take to get a client.
But what matters most is why it matters.
Because it has a direct consequence on the profitability of your business.
It is essential to measure the average CAC of your business in order to know if your actions are profitable. Indeed, if getting a customer costs you more than what it spends on your online store, it's off to a bad start, isn't it? 😉
But first, let's see how to calculate it.
How to calculate the CAC of your e-commerce
The formula for calculating the cost of customer acquisition is very simple: just add the marketing and commercial expenses and then divide the sum obtained by the number of customers captured.
In other words:
CAC = (Marketing + Commercial Actions) / Customers Obtained
What then is included in this sum?
Well, in fact, everything you want.
Let's start with something simple, so you can understand: you need to know at least how much you spent in your last marketing campaign.
Include all the channels you have used here:
Once you have everything in hand, add it up and divide it by the number of customers they have brought you.
However, the CAC is not only calculated by campaigns, but you can also measure it by quarters, by semesters or by year.
We recommend that you measure it on a regular basis, to find out if the money you are spending to get your customers is well invested.
Moreover, it is useful to measure for each channel. You will be able to know if, for example, ads on Facebook Ads are more profitable than writing articles, or which of your partners bring you better quality customers.
This is a basic calculation, but you can always refine it.
If for example, you have worked with external professionals (designers, writers, copywriters, etc.) for your acquisition procedures, this also enters your marketing expenses.
And if you want to be as specific as possible, you can include the cost of your server and your domain. Difficult indeed to have clients without a web, isn't it?
In all cases, the formula is the same. What changes are the fees you want to include in this initial sum?
Also remember an important detail: the cost per acquisition is calculated only when a potential customer makes his first purchase on your e-commerce. If it is a customer who repeats a purchase, it does not enter the calculation (in reality if, but in another way. We will see that a little further).
Suppose you have an online store of sporting goods. You decide to carry out a campaign from October to December to capture new customers and sell snow equipment.
Your basic fees during these three months might look like this:
The sum of all costs represents a total of € 4,120 over three months. If you divide it by the number of customers obtained through this campaign, your acquisition cost for each customer is € 275.
By removing from this figure the amount that this customer has spent on your online store you get the real profit from the sale.
What happens if he only buys skis for, say… 180 €? It seems that the campaign was not very profitable for you ...
Of course, things would be different if you sell luxury items at € 3,000 apiece. In this way, getting a client for € 275 would be a real bargain.
But let's go a little further:
What if the same person who bought the skis places a new order four months later for € 350?
All of a sudden, that customer you thought had made you lose money, made a second purchase and exceeded the amount you spent to get it.
Does this mean that it is profitable?
What is more difficult is whether these expenses were profitable or not.
It could be that this customer who has just spent little decides to continue buying for another year or two, in which case the customer's acquisition cost is amortized.
In addition, you know that retaining a customer is much more profitable than attracting new ones. Or in other words, it's easier to sell again to someone who knows and trusts you.
If you want to know the degree of effectiveness of your capture campaigns, there is another element that you must take into account: the customer lifespan (Lifetime Value or LTV, according to its acronym in English).
Another learned word?
Yes, but you will see that it is very simple to understand
In case you didn't know it, this term refers to the potential income that a user brings you during its customer life cycle.
Suppose, for example, that this sportsman whom you managed to capture thanks to your promotion of skis continues to buy in your shop for two years. During this period, he makes three annual purchases with a profit margin (we are talking here about profits and not income) of € 104 for each purchase.
If we multiply all this, we get a result of € 624.
This sum corresponds to the average real income that each customer earns during their customer life. If you deduct its acquisition cost, you have a profit of € 349.
You may be thinking that getting that profit margin after two years doesn't seem very profitable either.
And you know what? You are right.
To make your business sustainable in the long term, the ACC should ideally not exceed 10% of the value of the LTV.
In other words, if each individual spends € 642 during their customer lifespan, the cost you invested to earn it should not exceed € 64.
As we are still far from this figure, we will see how we can improve it.
What are the main changes in online shopping trends in the past few years? We have looked at several studies and statistics from here and there. Here are our insights on changing trends and how to optimize Online shopping in Pakistan experience for shoppers who use them.
1. Consider mobile shopping
Disregarding the mobile online shopping experience puts retailers at a disadvantage, according to an iVentures report. 91% of the websites reviewed in this study are mobile-optimized, which means that having a mobile version of an e-commerce application is now a must-have product. Again, apps are important, which means you need to buy iOS and Android apps for your store for the best online shopping experience.By offering mobile payments, coupons, and the option to provide shoppers with physical store location information, stores with retail outlines and online stores leverage their applications to improve the in-store online shopping experience.
No application? That's great, but at least make sure your website is mobile-friendly. It doesn't take much to make your website responsive, some plugins even let you use it for free. Consider investing money and time into the mobile online shopping experience, but if you can't afford it, try to provide shoppers with a mobile-friendly experience where possible.
2. Personalized experience
Personalization is the greatest opportunity identified by research. Using behavioral data to show shoppers related products they may like is a quick way to boost sales. However, this is just one way to personalize the online shopping experience, and many stores don't take advantage of it.Only 111 of 13 websites in the iNentures study personalized the online shopping experience based on online shopping history or browsing history, and even less personalization used in email marketing campaigns or mobile apps.
This is a great opportunity for online retailers, as even large stores are underutilizing it. Personalized marketing emails and coupons. Think about what your shoppers are buying and what this might suggest about their shopping habits. Using redirect ads is one way to get shoppers back to the store after a bit of browsing.
3. Focus on content
Content marketing is not limited to blog posts. As a result, many e-commerce stores are struggling to identify the topics they can write on their blogs and think they might give up content marketing instead of doing some shabby work.But content marketing is not just about writing long articles. This is also visual content. For e-commerce, there is nothing better than that. By using photography as a way to communicate with the audience, lookbooks like iVentures reviewed 65% of the site, 50% like to provide useful tips, and 61% have an online magazine or blog. This is a great way to show how products can be used best by them, and provide guidance and advice, rather than selling for strong buying to attract customers.
Explore setting up a blog and see the visual elements you can include. Don't worry too much about publishing daily, instead focus on publishing once a week, but make the content worth the wait. Highlights how to design fashion accessories, how to use products, and a curated list of special gift sharing considerations for the holidays.
4. Include Product Video
iVentures revealed five common characteristics of most product pages they reviewed; photography, qualitative descriptions, quantitative specifications, product options, and social media sharing options. However, product videos often appear, and 32% of websites end with some product page videos.Although it may be beyond your abilities to shoot product videos for all products at this time, customers need more information about the product before buying it. Many customers view the same product on a 2-3 website before buying, and displaying a video on the product page may just be the boost needed to drive sales.
5. Faster delivery
We live in the Amazon Prime world. Online shoppers want their products to be faster and faster than before. Most stores now offer one- or two-day shipping options, and some even offer it for free. Amazon has an hour of delivery time in New York City!Gone are the days when customers could wait a week or two for their products to reach them. Even international customers want to explore faster delivery options. This is a good trend, because soon, if not faster, everyone will deliver items in 2-3 business days. Provide a complete list of shipping options on your website, including international shipping options.
6. Focus on social media marketing
Social media is one of the largest internet marketing tools. Used properly, social media can help increase sales, but as of now, many businesses are just beginning to explore this trend.Platforms like Pinterest, Twitter, and Instagram can all help marketing efforts. In fact, according to another study, 75% of e-commerce sales are generated from these platforms.
Consider advertising on these platforms and regularly share product images and videos with your audience to increase interest. As these platforms now integrate buy buttons, the potential for using social media to drive sales will only grow.
Since trends have changed, online retailers need to continually improve their marketing strategies. Use these insights to optimize your 2016 online store and maximize your store potential.
Do you think we missed something? Leave a note in the comments with online shopping trends that we should include but may have forgotten.
The Indicator That Helps You Increase the Profitability of Your Store
Do you know how much you got from the last sale of your e-commerce?
Or rather: do you know how much (really) brought you your last sale?
When analyzing the profitability obtained, many e-commerce owners make the mistake of focusing only on the cost of the product, on the shipping costs and on their own salary, forgetting a fundamental element: the cost of customer acquisition (CAC).
Indeed, if to get a customer you spent 50 €, but your average basket is 35 €… There is a problem, isn't it?
In this article, we tell you all about the cost of acquiring customers: what it is, how to calculate it and more importantly, how to use it to increase the profitability of your store.
Let's go!
👉 What is customer acquisition cost (CAC)
The cost of customer acquisition (CAC) represents the total investment made to convert a potential buyer into a customer.That is to say, the sum that represents the cost of all the actions you take to get a client.
But what matters most is why it matters.
Because it has a direct consequence on the profitability of your business.
It is essential to measure the average CAC of your business in order to know if your actions are profitable. Indeed, if getting a customer costs you more than what it spends on your online store, it's off to a bad start, isn't it? 😉
But first, let's see how to calculate it.
How to calculate the CAC of your e-commerce
The formula for calculating the cost of customer acquisition is very simple: just add the marketing and commercial expenses and then divide the sum obtained by the number of customers captured.
In other words:
CAC = (Marketing + Commercial Actions) / Customers Obtained
What then is included in this sum?
Well, in fact, everything you want.
Let's start with something simple, so you can understand: you need to know at least how much you spent in your last marketing campaign.
Include all the channels you have used here:
- Advertising on Google and on networks.
- Email marketing.
- SEO articles writing…
- Etc.
Once you have everything in hand, add it up and divide it by the number of customers they have brought you.
However, the CAC is not only calculated by campaigns, but you can also measure it by quarters, by semesters or by year.
We recommend that you measure it on a regular basis, to find out if the money you are spending to get your customers is well invested.
Moreover, it is useful to measure for each channel. You will be able to know if, for example, ads on Facebook Ads are more profitable than writing articles, or which of your partners bring you better quality customers.
This is a basic calculation, but you can always refine it.
If for example, you have worked with external professionals (designers, writers, copywriters, etc.) for your acquisition procedures, this also enters your marketing expenses.
And if you want to be as specific as possible, you can include the cost of your server and your domain. Difficult indeed to have clients without a web, isn't it?
In all cases, the formula is the same. What changes are the fees you want to include in this initial sum?
Also remember an important detail: the cost per acquisition is calculated only when a potential customer makes his first purchase on your e-commerce. If it is a customer who repeats a purchase, it does not enter the calculation (in reality if, but in another way. We will see that a little further).
👉 Example of the customer acquisition cost
If you have trouble understanding the exact definition of ACC, an example will certainly give you a much clearer idea.Suppose you have an online store of sporting goods. You decide to carry out a campaign from October to December to capture new customers and sell snow equipment.
Your basic fees during these three months might look like this:
- SEO articles concerning snow sports (outsourced): 250 €.
- Campaign on Facebook Ads: € 420.
- Google online shopping campaign: € 340.
- Payment tools for email marketing: € 60.
- Salary of a person in marketing: € 3,300.
- Customers obtained: 15.
The sum of all costs represents a total of € 4,120 over three months. If you divide it by the number of customers obtained through this campaign, your acquisition cost for each customer is € 275.
By removing from this figure the amount that this customer has spent on your online store you get the real profit from the sale.
What happens if he only buys skis for, say… 180 €? It seems that the campaign was not very profitable for you ...
Of course, things would be different if you sell luxury items at € 3,000 apiece. In this way, getting a client for € 275 would be a real bargain.
But let's go a little further:
What if the same person who bought the skis places a new order four months later for € 350?
All of a sudden, that customer you thought had made you lose money, made a second purchase and exceeded the amount you spent to get it.
Does this mean that it is profitable?
👉 How to know if the cost of acquiring your e-commerce is good
As you have just seen, calculating the CAC of a specific campaign or period is very simple. You just need to know how much you spent on each channel and divide the result by the number of customers won.What is more difficult is whether these expenses were profitable or not.
It could be that this customer who has just spent little decides to continue buying for another year or two, in which case the customer's acquisition cost is amortized.
In addition, you know that retaining a customer is much more profitable than attracting new ones. Or in other words, it's easier to sell again to someone who knows and trusts you.
If you want to know the degree of effectiveness of your capture campaigns, there is another element that you must take into account: the customer lifespan (Lifetime Value or LTV, according to its acronym in English).
Another learned word?
Yes, but you will see that it is very simple to understand
In case you didn't know it, this term refers to the potential income that a user brings you during its customer life cycle.
Suppose, for example, that this sportsman whom you managed to capture thanks to your promotion of skis continues to buy in your shop for two years. During this period, he makes three annual purchases with a profit margin (we are talking here about profits and not income) of € 104 for each purchase.
If we multiply all this, we get a result of € 624.
This sum corresponds to the average real income that each customer earns during their customer life. If you deduct its acquisition cost, you have a profit of € 349.
You may be thinking that getting that profit margin after two years doesn't seem very profitable either.
And you know what? You are right.
To make your business sustainable in the long term, the ACC should ideally not exceed 10% of the value of the LTV.
In other words, if each individual spends € 642 during their customer lifespan, the cost you invested to earn it should not exceed € 64.
As we are still far from this figure, we will see how we can improve it.
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