Back to the Basics: Tactics to Increase Revenue for Your eCommerce Store in 2021
Welcome to Part One of our New Year Blog Series, Back to the Basics: Tactics to Increase Revenue for Your eCommerce Store in 2021.
This article was originally published in September 2019 and has since been updated.
BVA is taking a full-service approach to helping you prepare for the new year. We’ve gathered insights across all of our teams, and are here to uncover what we consider to be the best tactics from a perspective that combines storefront strategy, marketing, creative, user experience (UX) design, Amazon, and more.
It’s that time of year for new year’s resolutions, shopping for new gym clothes, and annual planning. But even if you’re a DTC athleisure brand swamped by consumers looking to get fit in the new year, how can you ensure you’re maximizing your online store’s revenue in 2021?
Here are our top 4 tips and tricks when it comes to increasing revenue through your eCommerce store:
1) Demystified! The Link Between Conversion Rate & Revenue
How can you increase metrics like conversion rate, and also guarantee an increase in revenue? It’s no secret that the link between conversion rate and revenue is a delicate line; if you slash your prices, conversion rate is sure to go up… but overall revenue will plummet.
The big question is, how can you increase conversion rate, but at the same time increase revenue?
Well, the first thing you should look at is your historical data to understand how people purchase and try to identify patterns. Understanding why people convert or why they abandon carts can enable you to leverage tools like email and paid social to get in front of the right people at the right time.
Additionally, this same data can also help you identify which groups of consumers purchase at the highest order values. When it comes to performance media, you’ll be able to more selectively target those segments of buyers and boost your AOV (Average Order Value).
So, once you understand the trends in your historical data, what’s next?
First, you should identify which products should NOT be discounted - if you can sell products at full price, why sell them at a lower price with less room for profit?
You can also use sales, promotions, and deals (see section 3 below for more). Timing is critical here, and so is deciding the type of discount that will resonate most with your audience without chipping away at your margin. For example, maybe you offer a free overnight delivery to customers who spend at least “x” dollars. This threshold must be specific to your product, and you’ll want to calculate a cart value that will offset the cost of overnight delivery and still make room for profit.
Another idea is to think about incentivizing conversions or higher order value by offering a post-purchase service. For example, if you’re a jewelry brand, rather than discounting your rings, offer free resizing - which only costs you a few dollars out-of-pocket.
Overall, it’s important to think through annual planning with a big picture mindset; you can’t just focus on conversion rate, at the expense of revenue. Planning ahead and coming up with creative offerings that incentivize your customers and their specific needs will help you overcome this balancing act and ultimately increase your bottom line.
2) How to Sell More Stuff on Amazon
Net new customers should be able to purchase from your brand in whatever way is easiest for them. In some cases, this means acquiring new customers will happen on marketplaces like Amazon.
Amazon should be considered as a part of most brands’ eCommerce strategy because it’s where many consumers start their online shopping process. Why? Because customers trust Amazon; according to Feedvisor, 89% of buyers agree that they are more likely to buy products from Amazon than other eCommerce sites.
On that note, one of the keys to a successful Amazon strategy: stellar customer reviews. Positive user reviews can turn into a snowball effect because of social proof. The more people see that others love your product, the more they will buy your product themselves.
Lastly, a tip straight from our Director of Marketplaces, Riane Sanchez - we highly recommend adding Amazon DSP to your marketing mix, a demand-side platform that enables advertisers to programmatically buy display and video ads.
“By leveraging DSP, you can retarget people that have visited your Amazon pages and direct them to your direct-to-consumer (DTC) storefront to convert.” says Sanchez.
3) Discounts, Promotions, Deals, Oh My!
Percentage discounts, buy-one-get-one (BOGO), tiered discounts, product bundling… the list goes on! How can you possibly decide which combination of discounts, promotions, and deals is right for your brand and your overall revenue?
Your choices should reflect your brand’s goals. Many of the promotional strategies are aimed at either increasing conversion rate or AOV, both of which funnel up to, and impact, overall revenue.
Here are some of our favorite types of promotions and how you can leverage them:
Product Bundling: Product Bundling is a great way to increase AOV and total revenue. But as with everything, you must return to your handy-dandy holiday planner and look at your Google and Shopify analytics in order to craft the right bundle.
You want to bundle products together that your target consumer will be interested in, and items they might not have purchased had it not been offered at the discounted rate within the bundle. This is also a great way to expose consumers to new products that they may not have tried on their own.
Look at what your users are currently purchasing, and identify other offerings that are an opportunity for a cross-sell.
Scarcity tactics: Implementing scarcity tactics into your user experience (UX) can take the form of timed shipping offers, limited-time offers with a countdown timer, flash sales, or by labeling items as “limited in stock.” And, as we mentioned, be sure to steer clear of false scarcity and tricking consumers just to make a quick purchase.
Up-Selling / Cross-Selling: Upon checkout, you should be implementing algorithms to track behavioral data that will make intelligent, personalized product recommendations to users in the midst of their purchase.
With the help of a platform like Findify, your digital storefront can easily leverage behavioral data in order to make cross-sell recommendations that best suit the unique customer making the purchase. This type of technology can look at location-based searches, previous searches, where users spend the most time on your storefront, and monitor what items are frequently purchased together by similar customers. Talk about smart shopping!
4) Referrals, Loyalty Programs, & Yotpo
Loyal customers have the potential to be your biggest revenue drivers. With a tiered loyalty program, you can incentivize customers to become more frequent purchasers. A referral program then takes it a step further by presenting a way for these loyal customers to become your brand ambassadors.
By giving your loyal customers a discount or a deal in return for a new customer referral, you’re creating a win-win situation. You’re not only gaining an email contact for a potential new customer, but you’re also creating an incentive for both that new customer and the loyal customer to further shop.
In addition to referrals and loyalty programs, try promoting and utilizing user-generated content (UGC). Here are some tips for collecting content and for maximizing its effectiveness.
Keep Up With It: The best way to actually do this is to put pressure on yourself and your team to collect high-quality UGC year-round.
Allbirds leverages UGC from Instagram on its DTC storefront
Use Competitive Creative in Ads: UGC can be the key to standing out in a sea of ads. You can kick up the quality of your UGC this year by creating photo and video contests that feature your product. To make the most of these competitions, offer a prize to the winner and clearly define your brand in your requirements for the competition. This way, you will get a lot of high-quality entries that you can use in your ads.
Focus on CLTV with an Ambassador Program:There is no better way to increase lifetime value and the quality of your UGC than starting an ambassador program.
You can offer an ambassador program with a low barrier to entry. Start by sharing a discount code and exclusive information with your ambassadors in exchange for content they share on your social media platforms of choice. This strategy will have the aggregate effect of creating more loyalty from your current fans and also grabbing the eyes of their friends who are likely to identify with your product or service.
ThirdLove utilizes a Yotpo referral program landing page
And last, but not least, remember that UGC can be used to leverage “Ingroup Bias,” a psychological primer which causes your customers to frame their decisions based on what others are doing around them.
By building a loyalty or referral program, you also get to capture more email addresses. This should tie back into your email marketing strategy. Part of a consistent email marketing strategy should be serving multiple purposes from cart abandonment, to loyalty programs.
Conclusion: Who Feels Ready to Make More Money in 2021?!
So now that you’ve learned everything you need to know about increasing revenue this year, what should you do next? START PLANNING!!! (If you’re not already on that track).
We’re hopeful that some of the ideas we’ve shared in this article will help you maximize revenue this year in ways that benefit your brand and help it in its growth journey.
Stay tuned for part two of the Back to the Basics series. Happy planning!
Have a project in mind? Reach out to us here!