More and more individuals have started their own businesses at breakneck speeds. eCommerce is one segment of the industry that has experienced tremendous growth over the past couple of years. After an increase of 50% last year, the United States eCommerce martket is worth more than 1 trillion dollars.
Of course, one of the biggest drivers of starting a business is the ease at which one can start. In the past, starting any business meant having to do the appropriate state-level registration filings, opening a bank account, procuring large scale technological infrastructure at huge costs, and then securing a merchant account via a lengthy and convoluted application process. This process served as a huge moat for wishful individuals looking to break into an most industries. Today cloud computing, software as a service (SaaS), and mobile technologies such as smartphones and tablets have greatly reduced these investment barriers and allowed businesses to form with minimal investments.
Furthermore, companies such as Host Merchant Services focuses on guiding merchants, including high risk merchants, to streamline the merchant account application process and advising businesses on how to quickly start accepting payments. This business formation process, particularly for eCommerce businesses, has been facilitated by specific platforms catering to them, including eBay, Shopify, Etsy, Amazon, to name a few.
Given these changing dynamics of quickly setting up a business to start accepting payments, coupled with the skyrocketing costs of rent of physical stores, result in eCommerce as a natural option for doing business. However, beyond simply doing business as an eCommerce merchant, there are ways to focus on growth to further expand your operations. In this article, we look at ways merchants can turbocharge their eCommerce store with significant growth hacks.
The Growth Hacks
Virtual and Augmented Reality
Over the past two years, consumer demand has shifted to online shopping experiences in lieu of in-store visits. As technology has facilitated contactless payments, the 3D virtual view of an entire designer showroom via investing in virtual and augmented reality allow consumers to experience full virtual rooms to “try” on outfits.
eCommerce businesses that invest in VR and AR technology will have a leg up on the competition allowing consumers a visualization of their product by trying on products via a hyper-realistic representation of a 3D fitting room. What AR and VR lets customers do is have a view of how certain apparel may look on them, within their space. Such capabilities can have tremendous benefits for merchants since, according to a survey conducted by UPS, 27% of all product returns were due to the product being “not as described.” According to ATLATL Software, a specialist of AR, VR and 3D software for eCommerce businesses, “two-thirds of shoppers say they have more confidence in their purchase as a result of the visuals rendered from AR and VR.”
Furthermore, according to research firm Statista, mobile commerce, the primary mode by which merchants implement AR and VR technology, is expected to surpass $430 billion annually in 2022. So, one of the best growth hacks eCommerce merchants can implement is to align their business to be an active participant in the mode of commerce that is likely to control a greater portion of consumer activity.
Finally, as large as eCommerce and mobile commerce are, online shopping still has many pitfalls. The online shopping cart abandonment rate is around 70%, according to research by Baymard Institute. However, the use of AR and VR increases conversion rates by 94% among merchants utilizing the technology.
Let your customers know their payments are secure
We’ve made great strides with the payment technology, with ecommerce first coming online with desktop, then mobile, and then via business’s own apps, along with consumer spending habits shifting to prefer eCommerce vs a traditional in-store shopping. As great as all these changes have been, they present their own set of challenges. Merchants are continuously faced with striking a balance between the customer experience and protecting those customers from security threats.
It’s hard to ignore these trends. Security experts are not ignoring them, and merchant services providers take these potential threats seriously. There are big expectations from merchants. According to the latest American Express Digital Payments Trendex Report, 90% of consumers already feel that their payment details are sufficiently secure given all the enhanced security protocol merchants implement. In fact, nearly 40% of shoppers feel that those protocols are making the checkout process cumbersome.
Nonetheless, the convenience of eCommerce and contactless payments not only pose threats, they’re resulting in real losses from nefarious activity. According to market research firm Statista, nearly 75% of all eCommerce merchants worldwide experienced some form of fraudulent activity in 2021, with total losses amounting to about $20 billion in total. As a result, the market for fraud prevention and security in eCommerce is expected to balloon to $70 billion by 2025.
There are specific actions merchants can take to inspire confidence in the security of their platform while also minimizing threats. According to the previous American Express report mentioned, more and more consumers are growing comfortable with the merchant saving their card information on their databases, a process called “card on file.” Today, 61% of consumers are comfortable sharing their payment information with the merchant to set up card on file. That is up from 43% in just two years.
With card on file merchants and consumers both save time and potential of error by eliminating data entry in every checkout. Furthermore, the payments can be processed via a secure tokenization mechanism. Tokenization does not use actual personal financial data but rather a meaningless set of characters generated in the form of a token which can be used to settle a transaction as the token will be accepted as a credible payment after it is deciphered by the token key at payment authentication.
Merchants should showcase this, and all other methods used in securing their payments, building confidence in their platform, which can also serve as a feedback loop for other customers to set up card on file with the merchant. Some ways merchants can accomplish this starts with their website landing page. Customer can see when a website is encrypted by a method called SSL, or Secure Socket Layer. SSL secures all financial information passing through various channels from the website when processing payments. Other ways to build trust around the security of a merchant’s platform is to showcase various trust badges on your website, such as a business which is ‘PayPal Verified’ or ‘Secured by Verisign,’ among many other options.
Urgency, FOMO, and Social Proof
A great way to increase sales in eCommerce is to implement certain initiatives that promote urgency among buyers, or some level of fear of missing out (FOMO). For consumers, FOMO can be instigated by marketing that appeals to their desire to clinch an opportunity before it’s too late and escapes them. Merchants will need to convince customers that time is of the essence, and there are hoards of peers vying for the same product, a concept known as social proof.
Social proof is one of the best influencers of consumer behavior. The book Influence by Robert Cialdini revolutionized persuasion and influence marketing with the concept that people look to others to decide what they themselves should do.
Sales, limited time offers, any promotions with the tagline ‘while supplies last’ are all a culmination of urgency, FOMO, and social proof. And it is in the best interest of all eCommerce merchants to employ all these psychological selling strategies.
Get customer testimonials
The best time for all eCommerce merchants to start building a portfolio of clients that can showcase their best features is as soon as they start their business. The second best time; right now. The aim should be to get other consumers to read about the benefits offered by your company.
There must be a plan for reaching out to customers and obtaining testimonials of your services. These efforts should include all platforms and major online review sites. You can have great copy and amazing graphics in your marketing, but customer testimonials of actual experiences using your goods or services will supersede that marketing any day.
Testimonials should be in the form of both text and video and should be available on your YouTube channel, Facebook page, Twitter feed, Instagram reels, Snap stories, Pinterest Pins, Google Reviews, as well as the Better Business Bureau.
Plan your campaigns
Maybe it’s the holiday season that draws the most buyers to your eCommerce site. Consider planning marketing campaigns using mailing lists and data on past purchases. Holidays are gold mines for merchants who plan accordingly well in advance. Consumers are happier, more altruistic, and open to spending.
These seasonal campaigns need not always be discount promotions. Customer enticement can even be built around specific level of gift wrapping and holiday packaging that businesses can begin to be associated their brands with – think of Tiffany’s blue boxes.
Target your audience
There are numerous examples of creating multiple audineces by segmenting the clientbase. Permutations that can be used to set up client segmentation include age cohorts, gender, marital status, family size, spending habits, lifestyle habits, income levels, educational levels, alma maters, geographic base, psychographic details, cultural roots, religious beliefs, sports affiliations, and many more.
The biggest benefit merchants get by segmenting clients is hyper-focus on specific preferences, and potential buying behaviors at different times of the year. This data can be utilized to target audiences with different emailing lists, discounts, or recommendations for certain products. This level of audience targeting can also allow merchants to offer extremely specific options which may feel they are tailored specifically for the individual.
Retailers such as TJ Maxx have historically employed a strategy to buy up inventory at a discounted rate for sports team jerseys and apparel only to offer them at full price once those teams start performing well. That strategy can be used to build out campaigns around performance of specific teams, targeting the fanbase of those teams.
Implement a Loyalty Program for Customers
Implementing a loyalty program is another great way for eCommerce merchants to turbocharge their growth. These programs are helpful not only in establishing loyalty among the client base but can also help quickly gain market share for new product lines.
Merchants haven’t been keen on implementing such programs, focusing solely on the commitment of both time and money that they require. However, this growth hack can be very effective and in helping accomplish other goals. The treasure trove of data that loyalty programs garner of merchants’ most steadfast customers allow businesses to quickly segment their clients, understand the profiles and preferences of this audience, and allow for effective targeting and outreach.
Among U.S. merchants, 75% reaped positive results by implementing a customer loyalty program, regardless of the investment of both human and financial capital to set up the program. Based on results from dual research conducted by Bain & Company and the Harvard Business School, client loyalty programs increase client retention by 5% and yield a 95% increase in profitability.
Human Resource Planning
All these hacks that we’ve listed so far are a great list of options for merchants to test, but they are not one man shows. Just as customers and marketing has to be segmented, so do your employees. Different groups of staff must focus on marketing, security, sales, and numerous other tasks, and they must do it effectively. Merchants need to consider specific strengths, skillsets, engagements levels, and motivations of their team members.
According to research by Gallup, employees who are engaged have a 41% lesser rate of absenteeism and exhibit an increased rate of productivity by 17%. According to research from the Glassdoor Economic Research unit, there is a correlation between customer and employee satisfaction. An increase of 1.3 points in customer satisfaction can be attributed to a 1 point increase in the company rating on Glassdoor’s website.
Expand Payment Options
Consumer shopping habits have shifted towards online, while eCommerce and mobile commerce, mCommerce, have flourished. Furthermore, newer options for payments have become available as demographic trends have also shifted towards contactless and digital. At the peak of the recent market cycle, the most valuable VC-backed firm was a FinTech company, valued at $95 billion. Shoppers prefer to pay via a digital wallet or other payments apps in lieu of a credit cards.
It significantly benefits merchants to start accepting payment methods preferred by consumers. That may include processing payments which include options such as P2P platforms such as PayPal and CashApp, or mobile wallets such as Apple Pay, Google Pay, or Samsung Pay.
Invest in all the right tools
Yes, investing in your employees, securing payments, setting up loyalty programs, planning campaigns, segmenting clientele, propagating urgency, using cutting edge technology such as VR and AR, and expanding payment options are all great hacks. However, having the right tools at your disposal can make life a lot easier and enable your employees to be much more productive.
Meta and Snap have long touted their hardware products for VR and AR. Netflix has gone to Microsoft to seek their help in implementing an advertising campaign and platform. All the major card networks such as Visa and Mastercard have their iterations of the 3D Secure payment security mechanism. There is a plethora of options for appropriate tools for human resource management, marketing campaigns and instigating FOMO, and at Host Merchant Services, we have robust options to help merchants expand their payment options.
eCommerce has grown by leaps and bound over the past decade. Just in 2021, the business segment was up by nearly 50% and in 2022, the industry will surpass $1 trillion in sales revenue, ahead of some initial projections by two years. Declining tech stack costs, improving internet and payments technologies, and the budding of numerous eCommerce platforms, and a natural demographic shift to shop online have all served as tremendous tailwinds for the industry.
Most people understand that eCommerce can sometimes be complicated. However, as with most entrepreneurial endeavors, optimal results from the above mentioned growth hacks will require a certain degree of experimentation. Some may not render many results, other may not work out for your specific industry or business. However, after experiemeting, you will find certain methods an absolute must to propel your business forward. There are many challenges that still remain which merchants often need to confront in order to power through a growth phase. Areas such as the eCommerce checkout, vigilance towards security concerns arising from changing payments and technology infrastructure, embedded payments, marketing initiatives, employee training, and customer loyalty, all demand a business owner’s attention. As a result, merchants will have to invest both time and resources to continuously improve their processes to address these individual areas. If given the right attention, these initiatives can serve as incredible growth hacks to turbocharge your eCommerce storefront.