Intense competition is driving rapid technological innovation in ecommerce. More and more brands are turning to cutting-edge tech to help them grow, evolve and aggressively pursue new customers.
One way brands are seeking to gain market share is by implementing headless ecommerce architectures. In a headless environment, the front-end presentation layer of an ecommerce store is decoupled from its back-end commerce layer. A headless architecture offers brands the freedom and agility necessary to deploy engaging front-end content and user experiences, without having to make significant changes to the back-end. This allows brands to quickly respond to shifting customer wants, needs, and desires to deploy front-end updates and changes that improve the overall shopping experience.
On paper, it may seem that a headless approach is more conducive to scrappy startups and direct-to-consumer (DTC) brands — organizations that are flexible and nimble, and can quickly shift approaches to respond to customer behavior. However, numerous enterprise ecommerce companies are also reaping the benefits of a headless architecture.
Headless ecommerce setups are helping enterprises create more meaningful shopping experiences for their customers, build true omnichannel marketing and sales strategies, drive down customer acquisition costs and much more.
But what exactly does a headless ecommerce architecture look like? How does it differ from a traditional ecommerce setup? And what unique benefits does it offer enterprise ecommerce brands? Let’s take a closer look.
What is Headless Ecommerce?
In a headless ecommerce setup, the front-end presentation layer of an ecommerce system (“the head”) is decoupled from its back-end commerce engine. The presentation layer refers to all of the customer-facing elements that make up a brand’s ecommerce presence, like UX/UI, progressive web apps (PWAs), promotional content and more. front-ends are the gateways customers use to engage with and purchase products from a brand.
Severing the front-end presentation layer from the back-end commerce layer opens up numerous opportunities for brands. Front-end developers can focus exclusively on adjusting the presentation layer to improve customer experience without having to worry about making changes to the back-end code base.
This back-end, which handles things like inventory, order management, payment gateways and shipping, uses application programming interface (API) calls to communicate with the front-end. The front-end can then be retooled for multiple different touchpoints, like IoT devices, mobile and more via API calls.
How Does Enterprise Headless Ecommerce Differ from Traditional ECommerce?
Traditional ecommerce architectures are monolithic. Monolithic platforms act as pillars, meaning they incorporate multiple components into a single code base. Everything from the database layer to business logic runs on the same code.
In a monolithic architecture, the front-end presentation layer is inextricably linked to the back-end components. In ecommerce, these individual components typically include services like payment authorization and inventory management. When a brand deploys a monolithic ecommerce setup, all changes made to the presentation layer must be replicated across the entire architecture. Things like basic content tweaks and UX/UI changes—even putting up a promotion banner — require coordination between both front-end and back-end teams. This can mean significant development time and effort.
In traditional ecommerce setups, there is very little room for flexibility to ensure other content forms or channels can successfully integrate with the back-end commerce layer. Headless ecommerce architectures provide for true flexibility in commerce, helping brands deliver superior customer experiences across touchpoints.
Headless Ecommerce for the Enterprise
Because of their age and size, ecommerce enterprise companies are more likely to operate on legacy technologies — including monolithic architectures. Unfortunately, this means that making adjustments to improve efficiency in ecommerce and adapt to changing customer behavior can be difficult for enterprises — especially in an environment where staying competitive with more flexible startups is crucial.
Enterprise ecommerce businesses must be agile and responsive in order to remain competitive. But the reality is there are numerous factors that can prevent enterprises from being truly nimble and flexible. Whether it’s the burden of legacy technology, or the inefficiencies that come with layers of bureaucracy, enterprises face numerous challenges in driving ecommerce success. But if they’re willing to make the leap, enterprises can benefit immensely from a headless ecommerce approach. Let’s take a look at some of the key areas where headless ecommerce can benefit enterprises.
1. Omnichannel ecommerce.
Creating on-brand customer experiences across all consumer touchpoints is the backbone of omnichannel ecommerce. From social media ecommerce to voice assistants, customers are using multiple channels to purchase products. And with more and more enterprises seeking to meet customers on their terms, drive more organic traffic and replicate customer experience across multiple touchpoints, having a truly flexible ecommerce solution is extremely important.
This is where headless ecommerce truly shines. Because the front-end is separate from the back-end commerce layer, it’s easy to manage multiple different customer-facing touchpoints. Any interface customers use to purchase products can easily be hooked up to the commerce engine through API calls. And if any changes or modifications to these touchpoints are made, they can easily be implemented without having to overhaul the entire system.
Because of headless ecommerce’s inherent flexibility, enterprises can easily deploy true omnichannel sales and marketing strategies — something organizations with traditional, monolithic architectures cannot.
2. Data analysis.
Data enables better customer experiences. Full visibility into key data points helps ecommerce enterprises run more efficiently and drive more effective customer interactions. From bottom-of-the-funnel metrics like conversion rate to more advanced data points, enterprises crave full visibility into their ecommerce operations.
Due to its API-first nature, headless ecommerce architectures provide infinitely more opportunities to extract data. With each API call offering its own set of data, enterprises can glean valuable metrics — and insights — from each sales channel. This allows enterprises to put their entire ecommerce operation under a microscope, examining each channel for key performance indicators (KPIs) like customer engagement. This improved data visibility will help enterprises fully understand how customers engage with different channels and touchpoints — and how they can be modified or adjusted for superior experience and engagement.
Headless Means More Developer Freedom
From a development perspective, headless ecommerce offers the freedom to scale up or down as necessary, with minimal time and effort. Its API-first nature makes it easy to integrate technologies that would require significant development work in a monolithic environment. Need to implement a payments gateway that can support recurring payments across multiple front-ends? There’s an API for that. Want to create custom checkout processes for each of your sales channels? That’s easy.
In a headless setup, APIs act like building blocks, helping you to stand up a complete ecommerce environment without having to custom build components or commit to a singular codebase for disparate elements.
Headless ecommerce provides flexibility and convenience on the back-end development side, meaning enterprises can prevent and resolve common front-end issues more efficiently. Avoiding site outages and downtime becomes easier, as does the ability to implement new capabilities to easily respond to customer wants, needs and desires.
While headless ecommerce can be transformative for enterprises, it’s not ideal for all organizations. Many enterprise ecommerce organizations are resistant to relying on significant amounts of API calls to power their architectures — and instead prefer the stability that a traditional, monolithic setup provides. These same organizations also likely employ both front-end and back-end development teams that are closely entwined, meaning changes can be made relatively quickly and cheaply.
However, for enterprises looking to go all-in on omnichannel ecommerce, you’d be hard pressed to find a better solution. Headless ecommerce can help enterprises easily manage multiple sales channels and touchpoints, quickly deploy front-end updates, and prioritize the overall customer experience across their entire commerce footprint. Headless ecommerce is powering the next generation of cutting-edge online retailers. Maybe it’s time to consider getting on board.
These days we do pretty much everything on our phones. We chat with friends on our phones. We video conference our colleagues on our phones via team communication tools. We find our significant others on our phones. We bank on our phones, stream shows on our phones, and we certainly love to shop on our phones.
It’s hardly surprising – did you know that there are a staggering 5.27 billion unique mobile phone users in the world today? In fact, the number keeps growing at a rate of 1.9% per annum. Due to increasing mobile device use globally, more and more of us are choosing to shop from our mobile phones. That’s exactly why mobile ecommerce sites need to be mobile-first.
We live in a time of mobile communications. Whether it’s mobile call forwarding or mobile shopping, today, more than half of all internet traffic is online shopping from a mobile device. Yet, despite this fact, many ecommerce stores still practice desktop-first design with added mobile responsiveness tagged on as a side measure. If so many of us favor mobile devices shouldn’t ecommerce site design start using a mobile-first design model?
That’s the growing consensus amongst many of today’s industry leaders. In this article, we’re going to be discussing everything you need to know about mobile-first design and the seven reasons why every ecommerce site should be adopting this design model in 2021 and beyond.
We’ll be covering:
- What percentage of ecommerce is mobile?
- What is mobile-first?
- 7 reasons to consider mobile-first ecommerce site design
- Mobile-first ecommerce website best practices
What Percentage of Ecommerce is Mobile?
A growing number of ecommerce transactions are now happening in the palms of our hands. In 2019 mobile ecommerce (or M-Commerce for short) accounted for a significant 67.2% of global ecommerce sales. That’s the equivalent of 2.32 trillion dollars. In fact, by the end of 2021, it is expected that M-commerce will account for a staggering 72.9% of total retail ecommerce across the globe.
But how did this happen? The retail landscape well and truly changed with the rise of the smartphone. Mobile devices have turned ecommerce on its head. Our mobile phones impact not only our shopping behaviors, but our purchasing decisions, and even our brand loyalties. They have a direct impact on what products end up in our shopping cart at the end of the day.
In 2020, approximately 50.88% of all internet traffic globally could be traced back to mobile devices and smartphones. And the gap continues to grow. As of March 2021, mobile increased its market share worldwide to make up 54.22% of all internet traffic.
What is Mobile-First?
So, what exactly is the mobile-first concept? Mobile-first is a concept whereby websites are designed for smartphones first and then scaled up for use on desktops and laptops later.
In other words, web pages are written up in mobile-first CSS and mobile-first HTML coding languages to begin with. That means ecommerce sites can ensure they have beautiful and functional mobile sites that offer user-friendly browsing and payment for their customers.
Traditionally websites have been designed in the reverse direction – for desktop first.
But with mobile-first models, all the initial designing and prototyping is based on mobile functionality first. Larger screens are factored in afterwards. This helps deliver higher quality user experiences to mobile users than have previously been available.
This mobile-first approach forms part of a methodology known as progressive enhancement. Progressive enhancement, as opposed to graceful degradation, proposes that instead of developing all features from the start, websites should be founded upon those features that can be supported by all browser versions. By contrast, a graceful degradation methodology would build an application upon a basis of full functionality then downgrade this enhanced version for different browser versions (e.g. old browsers or, in our case, mobile devices).
The latter method can often result in mobile sites that simply aren’t good enough. That’s why mobile-first designing is now transforming ecommerce with improved mobile experiences that support omnichannel sales. By focusing on mobile first, mobile shoppers benefit from exceptional designs and functionalities both on the small and the big screen.
Mobile-first vs. Mobile-friendly
It’s important to note that mobile-first design is not the same thing as mobile-friendly design. Mobile-friendly (also known as mobile-responsive design) does not start from the smartphone and scale up. In fact, it does the opposite.
Mobile-friendly designs are built on the graceful degradation model. Mobile-friendly designing involves scaling down desktop designs and adapting them for mobile screens. Whilst you might think that mobile-first and mobile-friendly sound not that dissimilar afterall, the end products can vary quite significantly
Mobile friendly designs might work on smartphones, but they are principally geared towards desktop use. The design must be compromised for the small screen. That means that the scaled down mobile version tends to be lower in quality, less intuitive, and usually offers an inferior user experience.
Mobile-first methods benefit online stores in particular, because they consider the needs of mobile users first, and design websites precisely for use on smartphones. Since that’s where most purchases take place, it makes a lot of sense to go mobile-first.
7 Reasons to Consider Mobile-First Ecommerce Site Design
Mobile first design boasts numerous benefits. It’s economical, responsive, and offers exceptional growth potential. Some might say that going mobile-first is the first step towards adopting a customer-first attitude. We all know that a good business is a customer-focussed business. So why aren’t we designing our sites with today’s customers in mind?
Since so many of our customers shop via mobile devices, a mobile-first approach is guaranteed to support increased conversions, and improved experiences. Still not convinced? Here are our top seven reasons to consider mobile-first Ecommerce site design in 2021.
1. Economical Website Design Strategy
Switching to mobile-first site design can save you both time and money. Why? Because mobile-first design is essentially a one-size-fits-all solution to great cross-platform user experiences. For example, instead of creating a beautiful website for desktop then having to adapt it heavily just so that it functions at a basic capacity on mobile, you’ll achieve a user-friendly site for all platforms first time around.
Furthermore, mobile-first design promises to be a great financial investment. We live in an undeniably mobile age where optimized mobile experiences are critical for success. Going mobile-first promises to increase client engagement, and extend your reach over a wider demographic. It is true that mobile-first strategies can be expensive in the short term. But the value added by truly great mobile functionality makes it a solid and cost-effective long-term investment.
2. Cross-platform Responsiveness
A mobile-first website will be compatible with a variety of different platforms. In today’s day and age that’s incredibly important. It means that your users can engage with site content, video marketing, and much more from whichever platform is most convenient to them at the time.
Most people access the internet from more than one device. For example, they might browse on their desktop then complete a payment later on their smartphone. In fact, one survey by GlobalWebIndex found that 95% of respondents used smartphones to access the internet, 93% used desktops, and 73% used tablets. With such high usage rates for all three devices, reliable cross-platform responsiveness is absolutely essential.
3. Better SEO with Mobile-First Indexing
Google has switched to mobile-first indexing. That means that Google uses the mobile version of your site when indexing and ranking content. If you’re already running a site on WordPress or Shopify, for example, Googlebot will now automatically use the mobile version of your site.
Any enterprise marketing agency will tell you, then, that designing mobile-first should be part of any comprehensive search engine optimization strategy. That’s ever more important since three out of every five searches now happen on mobile.
Smartphone usage is on the up and great mobile experiences are essential. By offering higher level mobile experiences, users are more likely to return to your site regularly, improving visibility, relevance, and reach both in the eye of the customer and the search engine.
4. Better Use of Content
Designing for mobile encourages content creators to be more concise – because who wants to be scrolling through pages and pages of lengthy information on a small screen? When sentences are kept short, content becomes more clear, concise, and easier for the reader to digest. Did you know that nearly half of users will stop using a website on a mobile device if they find the content to be useless or the layout overly complicated?
When we design for smaller screens first, we are forced to differentiate between content that is valuable and important, versus content that is glorified filler. When we do this, we also strengthen our brand messaging by picking out content that really tells the customers who we are, what we do, and why they should purchase from us. Remember, you can always scale up your content for the desktop site later on.
5. Add Value to Customer Experience
According to research conducted by PWC, 42% of buyers are willing to pay more for a great customer experience. Today, going mobile-first could be the key to improving customer experiences. Mobile adoption has become a critical part of the customer experience and providing high quality mobile services is key to keeping customers happy.
A bad mobile experience speaks poorly of your brand. In fact, 50% of customers will stop visiting a website if it isn’t mobile friendly. So, what is the best way to add value to your business? By giving customers exactly what they want. Some of the most valuable features for M-commerce shoppers include:
- Product images
- Accurate product descriptions
- Personalized experiences
- Easy navigation
- Integration with retail locations
- Integration with social media
- Simple checkout process
- Multiple payment options
- Great customer service
- Security features
6. Higher Growth Potential
Ecommerce has boomed in recent years. But it’s now being taken over by M-commerce. We live in a mobile-first world, so it goes without saying that mobile-first design is the route to higher growth potential. Mobile is starting and ending more consumer journeys, and voice controlled devices are fast becoming a massive driver of sales. In fact, 40% of consumers now use voice technology to make online purchases.
M-commerce is now a major shopping channel. One-click payment options, social-media commerce, and soaring app usage are generating mobile growth potential. And thanks to improved mobile experiences, mobile-commerce is expected to increase in value from $128.4 billion 2019 to a staggering $418.9 billion by 2024 according to Business Insider.
7. Gather Insightful Customer Data
Last but not least, M-commerce is a great way to gather more customer data. The more data you collect, the more you can then use it to offer your customers exactly what they want and need. Collecting customer data improves shopping experiences in the long run. Plus, mobile data collection is a great way to expand your email and SMS marketing lists.
Mobile ecommerce can help companies gather data about user locations, shopping histories, particular interests or even social media profiles. And that, in turn, helps retailers deliver tailored brand messages to their customers and personalized user experiences.
Testing Mobile Commerce Sites
The benefits of a mobile-first approach are many. But when you choose to switch your design model to mobile-first design, it’s still important to conduct all the necessary testing before launching your new platform to paying customers. This will ensure that there are no glitches impacting your platforms user experience and functionality. Types of testing include:
1. Agile testing.
Agile testing is integrated directly into the developmental process. By conducting agile testing, you’ll troubleshoot any bugs or potential problems early and move your new platform forward as quickly and efficiently as possible.
2. Functional testing.
Complementary to this, functional testing focuses on usability and will help you identify whether your site actually works as you intended it to.
3. Manual testing.
When your new mobile site is nearing launch, manual testing is essential. What is manual testing? Manual testing is when human testers check out the quality of your site, and is great for optimizing your interface for real users.
4. Localization testing.
Just like functional testing, localization testing is designed to check if mobile apps and websites offer full functionality for their users. But localization testing zeros in on one particular location. This is especially useful if your site is targeting a particular region.
5. Automated QA testing.
Automated QA testing uses automated testing tools to run tests on your site during development. Unlike manual testing, QA testing relies on specialized tools and frameworks created by testers and tends to be more accurate and time-efficient.
Mobile-First Ecommerce Website Best Practices
1. Give UX the highest priority.
When it comes to M-commerce, UX (user experience) is super important. Complicated pages of content just won’t cut it when it comes to mobile. By offering customers a user-friendly experience, you’ll encourage revisits in the future. Failing to deliver on user experience can be costly and tend to drive away potential buyers, who will most likely seek out your competitors instead. To improve UX focus on simple designs, easy-to-read typefaces, interactive content, and mobile-friendly search functionalities.
Take a look at Skullcandy’s super simple user navigation template. An A+ for simple UX. The navigation bar is clear and concise, easy to read on mobile devices, and customer support is clearly signposted. Plus, there’s also the option for mobile-friendly search in case a user wants to navigate directly to a particular product or criteria.
2. Establish Visual Hierarchy
Visual hierarchy is simply the practice of arranging design elements according to their importance. By laying out visual elements and navigation icons strategically, designers can encourage users to use the website in the most optimal way and increase conversion rates.
That could mean highlighting a new offer or giving your brand’s social media platforms center stage. It can also mean avoiding unnecessary and distracting popups on your product pages. By contrast, when web pages lack intuitive design, users tend to become confused and quickly lose interest.
The main thing is to keep any important elements – from the checkout to the search bar – within easy reach. Smartphone users are often multitasking whilst using their devices. They could be waiting in line at a cafe, sitting in the parking lot, or waiting for the next train. That’s why it’s so important to establish visual hierarchy.
As a general rule, your mobile homepage should look a little something like this.
As you can see, primary functions are the most accessible, whilst secondary and tertiary functions are arranged around the margins.
Take a look at blissworld’s mobile website. The mobile interface establishes a very clear visual hierarchy by drawing attention to a new product range and clear CTA ( primary zone) under a simple header (secondary zone), and a free sample offer in the tertiary zone.
3. Keep the site simple.
Simple design is integral for UX. By simplifying designs, adapting images to prioritize load times, and removing excessively long content, you’ll be well on your way to improving your users’ experiences. Aim for a simple and intuitive homepage, product pages, and checkout process. An overly cluttered web page will drive customers away – 89% of people will shop with a competitor after a poor user experience.
The idea is to design primarily for responsiveness. That means being mindful of image sizes, content layout, and video content. Customers want product images but make sure that they are clearly visible on mobile. Ensure that content is arranged for mobile viewing, and ensure both image and video file sizes aren’t jeopardizing your load times. Every second counts in the fight against page abandonment.
Take water bottle retailers Larq, for example. Larq’s web designers have kept things super simple. The most prominent design element on the Larq mobile homepage is a killer USP (“60 seconds to pure water”) and corresponding call to action (CTA) (“Shop now”). Super simple, but super effective.
The Future of Design is Mobile-First
The future of web design isn’t on PC – it’s on your Androids and iPhones. Mobile-first design starts from the smartphone and scales up for the desktop. By flipping the traditional design process on its head, ecommerce merchants can feed into our mobile-first society and the changing consumer habits that are continuing to set a precedent for the future. Going mobile-first offers some tremendous benefits, from heightened customer experiences to increased growth potential. If you’re not already designing mobile-first, it’s time to make the switch.
No one can deny how big the ecommerce market is.Global ecommerce sales are projected to nearly double to $6.5 trillion by 2023. Its share of total retail sales is also growing, particularly in the wake of the COVID pandemic.
So we know the sector is massive, but how complicated is it? Surely it is just a simple matter of finding the product you want, buying it, then waiting for delivery. Or is there far more to the ecommerce customer journey? There are multiple factors, from lead times to customer service, that makes an ecommerce business a good ecommerce business (or not).
Modern business, especially ecommerce, is about identifying and utilizing the best tools available. And that covers everything from live video conference software to good CRM management systems.
Smaller businesses need to find such tools without breaking the bank. Fortunately, they can choose from the best free business apps that will provide great service without denting the budget. Having the ability to be agile and to adapt to changes can be a major positive for your business.
If you look at a successful online retailer such as Larq, you will see a well-constructed site that is easy to navigate and that also offers links to their various social media platforms. This is a good example of how an ecommerce site should look. It shows they have looked at the customer journey and optimized their site to make it a positive one.
You need to know each stage of that journey, how those stages affect customer experiences and their relationship with you, and how you can improve the journey at every level and customer touchpoint. Let’s look at how the customer journey unfolds and what factors of customer journey mapping that are important for you to understand.
What is the Ecommerce Customer Journey?
That quote about life from Ralph Waldo Emerson can also be applied to ecommerce businesses. While it is easy to think about the destination—that purchase arriving in the customer’s hands—it is also very much about the journey and what happens en route to that final destination. Just as with life’s journey, every stage of the ecommerce journey has its own features and qualities.
Our customers no longer buy just a product, they buy the whole experience of being a customer, they buy your brand qualities, your mission and values, and more. They buy into the ease of your processes, the information you provide, the convenience, the quality of your aftersales (and presales if needed) customer service. In short, they look at the whole package you offer.
We all do process mapping for our businesses as a matter of course, so we should be doing the same for the customer experience. You need to understand every aspect of how your business operates, from dealing with logistics to ensuring your customers are happy.
And do not be afraid to use shortcuts. The very reason tools such as templates are offered is to make it easier for you to conduct business. They can save you time and money and it can be easy to find one that suits you.
It is not only the price of something that matters to them, it is everything that surrounds it, including how they access your site or app (and how easy it is to use), how you communicate with them across different channels, possibly even using companies like Slack, and how quickly you respond to their inquiries. In short, it is about providing an ecommerce customer journey map that meets all of their needs.
Focus not only on your customers’ journeys, but also on their relationship with you; that’s important whether you are a small business or a large international one. Investing in customer relationship management (CRM) software is highly advised, especially when you have a multichannel or omnichannel business.
There are also other aspects to consider. Many people now ask ‘what is affiliate marketing’, as offered by MaxBounty, and what is its place in online retail? If you use a strategy such as affiliate marketing, then you need to make sure that a customer’s journey is consistent across all the options open to them. Whether they find you via your own channels or through an affiliate.
5 Stages of the Ecommerce Customer Journey
So we recognize that the customer journey is far more than a simple buying process. We also recognize that we need to know how to develop a successful ecommerce fulfillment strategy that helps us win and retain customers. Knowing the main stages of that journey is essential to both mapping it and ensuring that it is as optimized as possible.
And when a business operates across many channels (omnichannel or multichannel), you need to recognize that their journey may differ greatly depending on which channel they are using.
Every journey has a starting point, and in the ecommerce business, that starting point is awareness. This is the stage where the customer discovers your product/service and your brand. This is also where you discover how they found you. Did they find you via a search engine (thus validating your SEO strategy)? Did they see an ad on social media or in a more traditional medium?
You can not only see where they came from but also what behaviors they are showing once they have ‘arrived’. Do they look at particular landing pages that give you an idea of what products they are interested in? You could also describe this as the first learning stage; the customer is learning about your business and you are learning their preferences and needs.
In this stage, the customer begins to show real interest in particular products or services and move beyond general browsing. For example, with a cosmetics company such as Bliss World, they may start looking at the vegan skincare range, letting you see that this is their specific interest product-wise.
From your organization’s perspective, this stage of behavior allows you to analyze what works and what doesn’t. Those analytics can help you reduce bounce rates and encourage further investigation by the customer.
One of the magic words in ecommerce, but this stage is not always a guaranteed sale. In some cases, this stage can include those customers who have added a product to their cart (or to their wishlist) but have not yet proceeded to actually buying it. In most cases, though, we do consider this to be the stage at which a prospective customer becomes an actual customer who adds to your conversion rate.
It is at this stage that you as a business have to begin delivering on any promises you may have made to get the customer to this point. Part of that delivery is making sure all your processes, such as marketing, sales, customer service, etc., are aligned and are delivering the same message and quality of service.
Another of those magic words. Having a customer make a single purchase is satisfying, but having them return again and again to buy is even more satisfying. This means they are very happy with most or all aspects of their journey and experience to date. From this point they begin to exhibit brand loyalty and may always look at your site before others.
The thing for businesses to be aware of at this stage is that providing an excellent experience once is fairly easy, but providing it time and time again is where the challenge lies.
This stage is the Holy Grail of the customer journey but do not expect to achieve it with every customer. Most companies fall short at stage four, but those who do manage to retain customers are then hoping that those people become advocates and brand ambassadors with a high lifetime value. At this stage, your best customers are not only buying but interacting at a high level.
They will interact with you across most if not all of your touchpoints, such as your homepage, any blogs, social media, etc. More importantly (from your marketing perspective), they will be sharing information that you post on their own platforms and will actively advocate and talk about your products/services. That can also include recommending you to people and writing reviews.
Building an Ecommerce Customer Journey Map
An ecommerce customer journey map is a visualization of all the potential experiences a customer may have with your organization. Such a map also highlights the sequences those experiences are most likely to occur in. It can allow you as a business to identify strengths and weaknesses, and thus make improvements where needed.
That customer journey may consist of all the stages we previously listed or they may only cover some of them, if customers do not move to later stages. What you need to focus on is that a customer journey map will show you all the possible permutations of what the customer experiences, whether only one or two stages or all five.
How Do You Build Ecommerce Customer Journey Maps?
Being able to map the customer journey offers many benefits, but if you have never undertaken this exercise before, where do you start? What things do you need to consider before starting?
The first important thing to note is that you need your map to be from the customer’s perspective. So, detach yourself from your professional role and start the process as if you were an everyday customer. This can also help you understand the overall customer persona.
To do so, pick a product or service your company offers. Use various terms on search engines to see what results come up. Read any associated material including reviews, articles, and blogs. Then visit your actual site to view the product there. Take notes on how the various customer touchpoints felt and how the experience of visiting the site unfolded.
Put together a focus group that consists of your main demographic targets. Ideally, they will not know what company or brand has formed this group. Pick one of your products or services and ask the focus group to find and buy that item online. Observe and record how they find the item, what paths they take, and what outcomes unfold.
Once the focus group has finished their exercise, take the results and compare them with your experience from part one. By analyzing the two exercises, you can see if you and your customers think in the same way, and will also have a wider overview of touchpoints and interactions.
You now have a better overview of how customers interact with your business and how the various touchpoints perform. You now need to understand what those various actions mean in terms of engagement strategy. Did any touchpoint perform particularly badly? By analyzing the information you have collected, you can see what action you need to take next.
Your aim is to have your ecommerce site performing at an optimum level at every touchpoint you (and your customers) have identified. Those touchpoints can range from your own site to your social media platforms to search engine rankings. They can also include independent touchpoints such as review sites.
4. Goals and pain.
You now have some of the foundations of your customer journey map in place. But it is more than just identifying the touchpoints and engagements you have observed. You also need to understand the goals of the customer and the pain points they experience. It can help greatly if you list some of the insights gained from your observation and data collection:
- Goals. What is the customer’s ultimate goal(s)? What is it they want to achieve?
- Emotional response. What parts of the process make the customer happy? Or what elements make them unhappy or frustrated?
- Pain points. What things cause issues for the customer and would they like to see improved?
You should now have enough (likely a lot) of information that tells you what the customer experiences. The problem is that this information is not easy to digest, so you want to simplify it and create a visual that is easy to look at and understand. How you format it will depend very much on your own specific business model.
You may decide to create more than one visual, especially when you are a larger company and may have different teams working on different areas. For example, if you have a dedicated social media team, you may decide to create a journey map that particularly pertains to social media touchpoints, pain points, experiences, etc.
Why is the Customer Journey Important?
Do you really need to make a customer journey map? What benefits does it bring you? Knowing why it is important is as crucial as understanding the whole process itself. There are many reasons why it is not only important, but should be an integral part of your ecommerce business.
- Efficiency. It can help you streamline the customer experience and journey by identifying if there are too many steps or touchpoints between the customer starting their journey and ending it.
- Effectiveness. Does the required journey make sense to your customers? Acknowledging that we all do things differently, from how we search to how we navigate a site, creating a process that has a general effectiveness for most is a major benefit of a customer journey map.
- Understanding. Knowing and understanding your customers, how they think, what they need, what they like and don’t like, is another crucial factor in determining how to create the best possible customer journey. In fact, this is an area where many organizations fail as they focus more on creating the perfect journey for them, rather than their customers.
- Setting goals. A good customer journey map can help you identify and set better and more realistic goals. The combination of a human perspective and the hard data you have collected ensures you are more in touch with what makes your business thrive and grow. It also helps you monitor and tweak in real time as you move forward.
- Planning. Every business has one eye on the future; new products and services, expansion, etc. Having an accurate customer journey map, and understanding it, means that you can more accurately focus on those future events.
- Reducing pain. Pain points are the bane of any online stores and can lose you customers if not identified and remedied. You may be surprised by how many pain points exist once you have completed your journey map. Once you have identified them, you can take action to remove them or to reduce their effects.
How Ecommerce Stores Can Improve Their Customer Journey
For companies looking closely at their customers’ journeys for the first time, it can sometimes be daunting when flaws and gaps are identified that are having a very real effect on your business. Mapping the customer journey is one thing, but knowing how you can act on the data you have identified and improving the customer journey and experience is another.
1. Create touchpoints at every stage.
Anywhere a customer interacts with your brand is a touchpoint. Seeing an ad, visiting your site, looking at independent reviews, contacting your business to find store locations, and finally making a purchase. All of these are touchpoints. Going back to the five stages of the customer journey we discussed earlier, you need to have touchpoints for each stage.
Each touchpoint serves a purpose and plays its part in optimizing the overall customer journey. So each touchpoint you create has to fulfil its specific purpose (ad attracting interest, checkout process quick and uncomplicated, etc.) Ensuring you have multiple touchpoints that fit their respective stages and work properly is essential.
2. Optimize your website for every device.
It is worth remembering that around half of all internet traffic originates from mobile devices. So if your website performs poorly when accessed from a mobile device, you are in effect alienating half your potential customer base. Optimization is key to offering a good experience to all.
It can help to look at great websites that are well optimized, such as Skullcandy, so you can see what is needed. The screenshot below shows how well you can view their products from a mobile device, making online shopping easier for customers.
And there are a few factors to take into consideration when optimizing your site:
- Test your site. Knowing your site works well on mobile devices is absolutely crucial. You can do this manually at first simply by accessing your site via several different devices. Look especially at loading times and how the site looks on a small screen. For more in-depth testing, use Google’s free testing tool.
- Web host. Make sure your web host offers the speed and resources required to make your site fast and responsive. A slow and unresponsive home page and website will put customers off. You also want a host that guarantees the minimum of downtime.
- Apps. Consider launching an app to complement your website. They are not as expensive as you think and they can help boost both sales and engagement.
3. Use proactive customer support.
Don’t wait for problems to happen and for customers to contact you. Anticipate the problems or questions most likely to occur and provide answers and solutions that will keep your customers happy. Offering proactive customer support has a number of benefits.
- Better customer retention rates. Being proactive means you’re more likely to have happy, loyal customers.
- Less calls to your support team. By solving problems proactively, customers can see the solutions themselves and thus will make less calls to you, freeing up your team to deal with more complicated queries and also reducing waiting times.
- More first time customers. People talk about the good service they receive and that includes proactive support. When satisfied customers share their experiences, that can lead to new first-time customers.
- Increased productivity. Proactivity means better communication. And that means your team has more time to listen to and help customers who call and to collect more information and data.
- Communication. You are probably already using video and messaging collaboration tools for sales teams, so why not ensure you also have great tools to communicate with customers. Chatbots and AI are great ways of proactively helping your customers find information.
4. Personalization is key.
It is neither a secret nor a surprise that people like a personal touch, and that is true whether in ‘real life’ or in online shopping and ecommerce marketing. That means going beyond using their name (which you can do with website automation or in marketing emails) and also recognizing their particular interests and buying habits.
Using tactics such as dynamic content marketing, which can customize content according to buying preferences, location, age, gender, etc., means you are offering a personalized approach that can lead to increased sales and better customer retention. Automation and analytics can be the two drivers when it comes to personalizing the customer journey, so use them wisely.
Smaller businesses may feel they could be overwhelmed by these demands, but with so much technology and automation available on a budget, it is not that difficult to do. There are many mobile apps for small business owners that can help with factors such as communications and social media posting, so see what tools can both help you and save money that may be spent elsewhere.
5. Gather data as much as possible and be flexible.
Data is not a one off exercise. Collect as much data as possible in the early stages, but keep collecting it always. Collect data not only on customer behavior and the customer lifecycle, but also general info via surveys, polls, etc. on your social media platforms and via email. The data you collect is a hugely important resource and offers you several benefits and potential uses.
And it is, of course, not just about collecting data, but about analyzing it and interpreting it efficiently. Consider using one of the many tools, such as Google Analytics, to help you with this. Identify what metrics, such as KPIs, matter most to you. A good KPI helps show your business is healthy.
Data is not just a collection of information, it offers tangible benefits that can help your business grow by developing strategies for the future.
- Understand the market. Collecting and analyzing consumer data helps you understand how your ideal customers behave online. It helps define and segment particular demographics, understand better what customers want, and see ways to improve the overall experience throughout the customer lifecycle.
- Expand your database. The more information you have on customers, the bigger, and more efficient, your database is. And with detailed data, you can segment your customers (and potential customers) into groups that make more personalized strategies, such as dynamic content marketing, easier to achieve.
A larger database allows you to use a variety of strategies. For example, instant messaging can be a great way to boost your ecommerce sales.
- Better marketing. By constantly collecting data, you get better insights into which of your marketing strategies and campaigns have worked well. The more data you have, the easier it is to identify which sorts of campaigns are best, and what platforms reach more of your ideal customer base and generate more leads.
Those campaigns could be via social media or you could identify what sort of email campaigns best drive sales.
Customer relationship management is perhaps one of the most important factors for ecommerce businesses to consider and it is worth investing in good CRM software to help with this. You may understand the customer journey, but managing that journey on an ongoing basis is a big task.
Aim to be consistent and to ensure you provide the same positive customer experience throughout every journey. Your online store has to be as accessible and helpful as any physical store would be. And that applies to every channel, platform, and touchpoint where your customers interact with you.
Ecommerce businesses range from massive multinational corporations to small solo entrepreneurs. Customers range from occasional purchasers of low value items to regular buyers of high value goods. No matter who you are or who they are, you should be aiming for parity so that every journey and experience is positive.
In 1982, Late Night with David Letterman premiered. Sci-fi classic ET was released. Doctors performed the first implant of an artificial heat.
And that same year the ecommerce timeline began with the debut of the Boston Computer Exchange, one of the first ecommerce platforms.
It was a big year.
Flashing forward almost 40 years, it’s impossible to imagine a time when ecommerce wasn’t around. Children of the 90s are blissfully unaware of life without buying and selling over the internet.
But technology has advanced considerably since Boston Computer Exchange’s bulletin-board-based ecommerce system. Where this method of client interaction sufficed at ecommerce’s inception, consumer needs have shifted too. Customer service is now at the very center of online shopping. This encompasses everything from making purchases to resolving issues while maintaining a seamless experience across different channels.
Aspect’s 2020 Consumer Index Report found that six out of ten customers do more business with companies that provide good customer service. That’s where omnichannel customer service comes in.
Omnichannel customer service can accelerate sales for your business. Read on to find out how.
What Is Omnichannel Customer Service?
An omnichannel strategy recognizes the various platforms and devices a customer may use to interact with a business. A business then applies this knowledge to create a unified shopping experience and consistent messaging across each channel. Core channels include mobile, email, SMS, social media, instant messaging and in-person.
According to Aspect, when it comes to personalized service, consumers value channel choice three times more than an agent knowing their name and history, with 46% of consumers rating this as the most crucial part of their shopping experience. Thus your business needs to be everywhere your customers shop.
1. Omnichannel customer service definition.
Ecommerce marketplaces have been on the rise since the mid-90s, with the launch of giants such as Amazon and eBay. And since then, different models of ecommerce have emerged. Whether your ecommerce business framework operates DTC (direct-to-consumer) or B2B (business-to-business or wholesale), customer service is a significant consideration.
When different channels align in an omnichannel model, consistent support is delivered as well as a unified brand experience. It should seem as though the business is running as a single channel, delivering an equally high-quality and uniform customer experience across all platforms.
Research by McKinsey shows that more than half of customers engage with three to five channels during each journey they take toward making a purchase or resolving a request. Also, the average customer attempting to book a single reservation for accommodation online switches nearly six times between websites and mobile channels.
Regardless of how or where a consumer makes contact, they should have access to an integrated experience across touchpoints. Implementing an omnichannel strategy enables organizations to understand the customer lifecycle better. It also helps them deliver personalized support.
2. Omnichannel customer advantages.
Unifying channels ensures cohesion regardless of which touchpoints the customer uses. Omnichannel customer service allows customers to get in touch whenever, wherever and however they want. Convenient, right?
An omnichannel strategy solves the issue of long customer service wait times and the accompanying feelings of frustration and despair. How? Omnichannel support means interconnectivity throughout digital channels and customer conversations. This affords your team immediate access to information provided to your business by customers across all platforms and allows you to resolve issues far more efficiently, reducing wait times.
What’s more, omnichannel platforms have built-in tools to speed up queues. They provide assistance to customer service reps via canned responses, internal knowledge bases and keyboard shortcuts. These features free up your agents to resolve more challenging issues.
Let’s take another example. You want to purchase a LARQ water bottle, but you have a question about which one is most suitable for you. LARQ’s employment of an FAQ section enables customers to answer their own questions. And they can do so easily via mobile devices or desktops. More on this later.
3. Omnichannel vs. multichannel customer service.
Implementing omnichannel customer service necessitates a multichannel ecommerce approach. As we have established, omnichannel customer service connects all channels and focuses on the entire customer service experience so that the customer can enjoy a seamless journey across all channels.
Multichannel customer service centers on the customer’s individual experiences across each channel. It concentrates on optimizing by touchpoint rather than the entire experience. Organizations use various online and offline channels. Online customer service includes email and instant messaging, where offline support takes place by phone and face-to-face.
4. Why omnichannel customer service is important for ecommerce.
Omnichannel support is essential for ecommerce for several reasons. Today’s online shoppers are busy and time-strapped. They seek convenience and consistency. Omnichannel customer service offers just that – these are the fundamental tenets the approach is built upon.
Furthermore, the customer-centric strategy and interconnected channels allow you to develop a single, holistic view of each customer, regardless of the number of channels they use. Based on that, you can personalize and optimize interactions across all platforms.
Now more than ever before, customers expect speedy resolutions to their issues. And they also want to expend minimal effort fixing them. Omnichannel support offers customer service teams the context of customer interactions with your business across platforms. This enables your team to come up with the ideal solutions.
Agents have access to multiple relevant applications without having to take the time to seek them out. This provides an overview of the customer based on the current conversation. Having access to this broad picture makes it easier and quicker to find an appropriate solution for your customer.
An omnichannel strategy can help your business thrive by allowing you access automatically to several data sources. Understanding each touchpoint and how they work together develops your awareness of the customer journey. To complete the circle, this then helps you improve your omnichannel marketing.
What’s more, a top-notch omnichannel customer experience can lead to word-of-mouth marketing. In turn, your sales increase.
How Omnichannel Customer Service Can Increase Sales
As we just mentioned, a first-rate omnichannel customer experience can increase your sales. Why? Because a happy customer is more likely to be a return customer.
Let’s delve into that a bit more.
1. It meets the customers in their preferred channel.
By understanding your customers’ preferred channels, you know where best to reach them. Gather data and analyze customer behavior to build a picture of which channels they use most often.
Ask yourself, do your customers have an online presence? Do they use review sites to make decisions? Do they have pre-sale questions, and if so, where do they ask them?
Cater to target audiences by focusing on their preferred channels. For example, baby boomers (aged 55-73) prefer to communicate via email instead of over instant messenger. Whereas Generation Z (aged 9-23) tends to find an optimized mobile experience more convenient.
By answering these questions, you’re aware of the channels to focus on. You can work on making these particularly efficient. But remember, this is an ongoing process – customer preferences may change over time.
2. It improves response time across the board.
Empowered customers want speedy responses to queries. On average, 79% of customers expect a response to social media posts within 24 hours. And 39% of social media users expect a reply within 60 minutes.
What’s more, research shows 25% of millennials expect a response within 10 minutes of sending a social media customer query before they start to feel like they’ve been put in a silo.
Consider utilizing autoresponders and categorizing your customer support tickets based on issue type and urgency to facilitate faster response times. You may also choose to employ an interactive voice response (IVR) phone system to support self-service call segmentation and routing.
Live chat should be considered, too. It’s the ideal solution to combat customer impatience. The tool significantly reduces customer queue time by providing real-time support. By receiving instant engagement, customer satisfaction increases.
Other omnichannel methods to speed up response time include implementing contact center and customer service software and SaaS. These types of software integrate all channels. For instance, with customer service software, a pop-up with all the customer’s details and contact history displays as soon as an agent answers a call. Offering self-service options such as discussion boards also helps.
Using contact center software makes it easier for customer service agents to keep track of customer concerns. For example, a customer may call, text, leave social media comments across their customer lifecycle. Less time is wasted if a comprehensive history is easily retrievable.
An omnichannel approach that speeds up response time across all channels makes your customers feel that they’ve been prioritized.
Other ways to streamline your business may include improving your checkout system. You may also consider inventory forecasting and supply chain management via cloud technology.
3. It allows hyper-personalized engagement with customers.
Omnichannel customer support helps you gain customer insights. Consumer journey maps and their previous interactions with your business can be used to personalize future interactions. That way, you meet or even exceed expectations.
A Gartner survey shows companies risk losing 38% of customers because of inadequate personalization efforts.
When the customer experience improves, your business sees better conversions. Customer loyalty improves, too. Over time, these positive factors boost sales and revenue.
Let’s say your ecommerce business employs fulfillment by amazon. This involves Amazon managing the picking, packing and shipping of orders on your behalf. To gain complete control over your customer service and provide a genuinely bespoke service (as well as picking, packing, selecting and keeping inventory of specific SKUs, shipping, and returns), you may want to consider switching to fulfillment by merchant.
4. It empowers customers with control.
By offering your customers self-service options as part of your omnichannel strategy, you pass the control to them. Self-service portals provide customers with instant access to problem-solving info. They don’t have to wait for an answer.
You expand their knowledge base, meaning they may not need to contact you in the future if a similar issue arises. Greater control equates to increased satisfaction.
5. It offers a mobile-friendly service.
A core part of an omnichannel strategy is providing a mobile-friendly service. This is critical to customers. In fact, in 2021, global mobile ecommerce sales are expected to be worth $3.56 trillion. To facilitate an accessible mobile service, consider building a BigCommerce ecommerce store with mobile-ready storefront templates.
Research shows that 90% of consumers have encountered a poor experience seeking support via mobile devices. Long load times, incorrect displays, tricky navigation and unhelpful search results can lose clients. Is your website optimized for mobile use? Test it out yourself and see how you fare.
How to Build an Omnichannel Customer Service Strategy
We now know what omnichannel customer service is, why it’s so critical and how it can increase sales. The next thing to think about is building the strategy itself. There are a handful of things to consider:
1. Understand the customer expectations.
We’ve talked about meeting or even exceeding customer expectations. But how will you know if you’ve done that? Every customer will likely have their own unique benchmark.
To get to grips with customer expectations, you need to understand their journey and the entire customer lifecycle. When you engage with clients and make an effort to understand them, you can deliver a more personalized experience.
By understanding how your customers interact with your business across each channel, you can optimize your processes.
For example, you have developed a quality product and are deciding on a retail vs wholesale strategy. You may choose retail over wholesale because it gives you the ability to offer a more personalized experience. You can specifically target a tailored consumer base. As the retailer, you’re able personally to select the channels you target to reach your customers.
2. Identify the channels to use.
Your business has a specific target audience. Let’s take Revelry as a case study. It has a clear target audience of brides. To offer a first-rate customer experience, it offers a home try-on facility for busy brides.
Skullcandy targets the outdoor action sports demographic such as snowboarders and skateboarders. Their target market is primarily millennials, so leveraging social commerce has been a big priority. Their platform integrates easily with Facebook and Instagram, providing additional valuable sales channels.
Within your target audience, try to discover their needs. Identify their preferred channels for interacting with you. Pay attention to your various channels and offer consistent customer service across them.
As well as this reactive approach, think about being proactive, too. For example, don’t just have a presence via the channels you know your target audience uses. Instead, consider new platforms to reach potential customers.
And within your current customer base, keep on top of trends. If your target audience values social media the most highly as a channel, be sure to keep up with its new features
3. Invest in customer service technology.
Your ecommerce business will likely already make use of CRM technology. An omnichannel strategy will boost an already powerful CRM. How? Omnichannel tools support data gathering. That gives your team customizable access to relevant customer information. Such tools also reduce turnaround times and help you track how the customer interacts with your brand at each step of their journey
Aside from CRM, there’s a lot of innovation in the technology arena. With the development of artificial intelligence (AI) software, automation processes can relieve sales pain points. This is commonly seen in the use of chatbots, for example.
What’s more, with the progress of video, real-time messaging and self-service, customer service is evolving.
Technology helps customer-facing professionals do their jobs more efficiently. Over the next decade or so, it’s likely the following technologies will change the future of customer service:
- Face-to-face video communication. This is on the rise, with eye contact a powerful communication tool. Businesses using video voicemail applications or video conferencing are setting the pace.
- Real-time messaging. Customers expect you always to be online. Many customers prefer to interact using instant chat rather than email or phone calls.
- Remote work. Rather than being confined to call centers, customer service reps will have the tools to work from anywhere.
- Bots and AI. These will help customer service agents, not replace them. And bots can be available when you aren’t – like when your customer service team is asleep. Bots improve self-service for customers and reduce costs for you. As this technology advances, bots will become increasingly capable of answering repetitive questions. That leaves reps to concentrate on questions requiring judgment.
Omnichannel strategies should make the most of these technologies. By doing so, you create a harmonious and uniform user experience for customers and consistent messaging.
4. Upskill your customer service team.
With the rise of AI, less complicated problems will be solved by service technology. But that doesn’t mean human customer service teams will be a thing of the past. Instead, upskill them to improve their product knowledge and ability to solve more complex problems.
Other essential training areas include communication skills and support etiquette. You must ensure you upskill your team to solve issues across all channels consistently.
By upskilling, your reps provide a more personalized experience. That means the customer experience improves. An upskilled customer service team also allows your product experts to spend more time innovating. That’s because they spend less time carrying out customer-facing duties.
Moving from a multichannel to an omnichannel approach is all about putting your customers first. It’s also about offering them a high-quality user experience at every point in their purchasing cycle. As part of this, an upskilled customer service team is critical.
5. Create a Self-Service Option.
Increasingly, ecommerce businesses recognize the benefits of reliable self-service options. Not only do they improve brand image, but they also keep you ahead of the technology curve.
Options range from tutorials and manuals to videos, as well as the previously mentioned FAQs.
Self-service portals allow personalization and save you resources. For example, agent productivity improves because support tickets reduce.
Furthermore, customer service costs fall. If customers find out answers on their own, support requirements drop. It also helps strengthen your brand reputation when customers have positive self-service interactions.
6. Ensure customer data security.
With more touchpoints comes increased data security considerations. But don’t let that put you off. Customers expect and trust that their security info is secure as they hop from each device. With proper processes in place as part of your strategy, that will be the case, and their data will be safe.
Consider implementing multi-factor security verification. Options include text messages and Google authenticator. Providing a consistent login experience is vital, too.
7. Map out the entire customer journey.
As businesses adopt new technologies, these should be analyzed. That data can be used to map the customer journey.
By doing this, you gain insights into previous customer interactions. For example, you can see conversation history and whether a customer has interacted with chatbots, via phone calls or SMS. If customers prefer to use text messages to communicate, you know that’s an area to concentrate on and improve.
Armed with that info, you can be proactive and deliver streamlined support via the preferred channels.
Omnichannel Customer Service Best Practices
Once you’ve built your omnichannel customer service strategy, you need to optimize it and make it as effective as possible. But first, there are some best practices to keep in mind.
1. Offer mobile-based service.
Creating an attention-grabbing yet functional mobile app is a must and should be part of your omnichannel campaign. It provides a fluid experience and takes the customer on a journey, from welcoming new customers and keeping them engaged to converting satisfied users into advocates. Indeed, as of 2020, mobile traffic accounted for 52% of all online traffic, and this is continuing to grow.
It would therefore be a tremendous ecommerce mistake not to equip your site with mobile compatibility. Your application should offer personalized service while maintaining the brand message. Be sure all customer support and solutions pages are mobile-friendly. Also, ensure website engagement strategies focus on mobile optimization when designing your website.
Behind the scenes, monitor and track in-app behavior. This data offers invaluable customer insight. It will enable you to understand individual pain points and preferences.
2. Be available 24/7.
Chatbots are an excellent way to facilitate round-the-clock support. A chatbot is an automated program that interacts with customers as a human would. A form of AI in messaging apps, it adds convenience for customers by being available 24/7.
Whatever the time of day and wherever in the world customers are located, they can receive support.
3. Always have FAQs.
A frequently asked questions page empowers your customers to find answers quickly and for themselves. The workload of your customer support team thereby reduces, freeing them up to concentrate on other facets of their role.
An excellent FAQ page is conversational, doesn’t skip the basics, answers questions directly and is easy to navigate.
You may also want to create (digital/online) brochures to provide customers with a greater knowledge base.
4. Automate workflows.
Hybrid support between humans and AIs is the new era of customer service. But it’s about striking a balance. Automate repetitive tasks, but leave more complex queries to humans. Automatic data processing would be particularly instrumental in organizing customer information and other tedious tasks like handling your inventory on balance sheet.
Learn the pros and cons of automation and decide the best way to integrate it into workflows. For instance, use chatbots at the primary stage and switch to human support for more complex conversations. Using a chatbot helps with customer engagement. Chatbots can answer simple queries and do some of the groundwork instead of your agents.
5. Gather customer feedback and behavior data.
By gathering feedback and data, you can analyze how your omnichannel customer service strategy is performing. Essential customer service KPIs and metrics used by businesses to monitor customer service are:
- Net Promoter Score (NPS). This measures customer experience and indicates how likely a customer is to recommend you to family and friends.
- Retention Rate. This helps find out whether customers are satisfied with your service and will keep buying from you.
- Number of touchpoints. This indicates the total number of touchpoints a customer uses to get the solution to their problem.
By measuring customer service, you know where you’re falling short and can do something to fix it. In turn, this enhances team performance and customer satisfaction.
An omnichannel approach syncs your communication channels, allowing your team and customers to work consistently between them. It’s an increasingly popular strategy.
A streamlined and cohesive service quality impacts revenue. It’s no wonder all enterprises are investing in providing omnichannel customer service. Travel, banking, telecoms, healthcare: You name it; every sector is pumping dollars and expertise into it.
The demand for an omnichannel customer approach is amplified by the need for a perfect customer service experience. You should adhere to best practices to reach such levels of perfection. These include automation, 24/7 availability and first-rate mobile service. Combined, these will accelerate sales – the aim of any ecommerce business.
Remember the days in the not-too-distant past when subscriptions just meant gym memberships and newspaper deliveries? Today, there’s a subscription for pretty much every occasion. In fact, if you wanted to, you could easily fill your entire day with subscriptions from start to finish. The coffee you drink, the clothes and makeup you wear, the software you use, the meals you make and beverages you drink, the shows you stream—all of these and more can be delivered straight to your door on a recurring basis.
From SaaS companies to subscription boxes, the subscription ecommerce market is experiencing monumental growth — and it shows no sign of slowing down.
ReCharge’s latest State of Subscription Commerce Report found that more subscription stores joined the market than ever before, with 90% year-over-year subscriber growth.
With subscriptions, one-time purchases turn into repeat sales. In other words, transactions turn into relationships. Your business has the opportunity to get to know your most loyal customers over time, honing your offerings to meet them where they are. Through delivery skips, product swaps, cross-sells, upsells and more, the flexibility and customization power of subscriptions delivers enormous benefits for both customers and merchants.
Considering offering subscriptions for your brand? Let’s dive into the world of repeat purchases and explore the ways you can meet your subscribers where they are with this offering.
What is an Ecommerce Subscription Service?
Brands are looking to explore providing recurring options to their customers in exchange for higher lifetime value (LTV) and decreased churn. Where in the past, one-time purchases meant shorter relationships with customers and harder work at a return purchase, today, subscriptions offer brands the opportunity to engage with their customers on a longer, more predictable basis.
So, what exactly is an ecommerce subscription? When companies collect recurring payments for products or services they offer on a set, repeating cadence, they’re providing a subscription service. When those products or services are sold online, they’re ecommerce subscription services.
Subscription services can encompass many different product categories, from the most popular (i.e. food and beverage subscription box services) to novelty items like hobby boxes and everything in between.
The Three Types of Ecommerce Subscriptions
Ecommerce subscriptions generally fall into one of three categories: replenishment subscriptions, curation subscriptions (aka “subscribe-and-save”) and access subscriptions. Let’s take a closer look into each to explore their differences in product focus, as well as their benefits for both merchants and customers.
1. Replenishment subscriptions.
Making up 32% of the overall subscription market, replenishment subscriptions refer to products that are used on a regular basis. Think deodorants, laundry detergents and protein shakes — Dollar Shave Club is a great example. These subscription boxes lean on the convenience of regular delivery for customers, providing them with their favorite products just as they’re just about to run out. Also referred to as “subscribe-and-save” (think Amazon’s option), these subscriptions often give discounts to customers who elect to receive the product more than once on a regular cadence.
2. Curation subscriptions.
The most popular subscription type, coming in at 55% in popularity, curation subscriptions were some of the first to market in the recurring subscription world — and they’ve only gained in popularity over the last decade. A curation subscription focuses on boxes of curated products shipped directly to consumers. Product types can vary within a box, or stick to a theme, such as international snacks, meal kits or skincare products. Popular examples of this subscription type include Birchbox and Blue Apron.
3. Access subscriptions.
Access is most commonly used to offer membership or availability to special benefits, content or discounts — for example, streaming services like Netflix. As things like connected hardware and community growth become more popular, utilizing access subscription services is becoming more and more attractive to merchants.
Benefits of Running a Subscription Service
Now that we’ve dug into the types of subscriptions you can offer, let’s explore what these offerings could mean for your business. Recurring revenue, increased acquisition and retention, easier and more accurate forecasting and building a community of brand advocates — all of these and more are possible with intentional subscription offerings.
1. Increase acquisition.
Research shows that new customers are joining the subscription space at unprecedented rates. ReCharge’s latest State of Subscription Commerce report, which studied physical subscriptions, found that from 2019 to 2020 there was an average of 90% growth in subscribers across all verticals. By their very nature, ecommerce subscriptions have many value-drivers that attract new customers, including financial incentives, convenience and novelty or entertainment.
Due to their unique ability to foster customer relationships with the recurring nature of their offerings, ecommerce subscriptions have unique opportunities to increase their acquisitions. Those with strong subscriber communities can leverage positive reviews, engagement on social media and even influencer content to reach new customers and encourage signups. And because these companies are able to study their subscribers’ behavior over time through analytics and market research, they have the opportunity to more effectively target their acquisition efforts for potential customers.
2. Increase retention.
As subscriber growth increased in 2020, so did lifetime value. The State of Subscription Commerce report saw an average LTV growth of 11% in 2020. In other words, subscription customers are spending more over their use of the service before they cancel.
A major opportunity for online stores to increase loyalty and boost retention lies in their customization. According to a McKinsey study, 28% of curation and access subscribers said that the most important reason for staying with a subscription was having a personalized experience. This can include everything from customization of product choices (such as swapping out one product for another or adding a one-time add-on purchase to a subscription) to communication preferences (such as having the option to enable SMS notifications) to frequency of purchases (such as giving options for different frequencies of deliveries or allowing options to skip deliveries). Empowering subscribers to manage their own subscription and customize it to fit their lifestyle increases trust in the business and keeps those customers around longer.
3. Make forecasting easier.
The recurring nature of subscription payments offers enormous benefits not only for customers, but also for merchants. Aspects of the subscription business model like vaulted payment information and scheduled orders create a predictable revenue stream. This has the potential to make forecasting easier and more accurate, and in turn benefits aspects of the business like inventory and supply chain management management.
This recurring nature also means that subscriptions are a valuable tool for tracking product performance and customer behavior over time. If subscription brands are intentional about their data and analytics, they can hone their KPIs over time to reach consumers even more effectively.
4. Build a stronger brand community.
Due to their ability to track customer behavior and product performance over time and their variety of touchpoints to interact with their customers, subscription businesses are uniquely poised to create strong brand communities. This type of engagement offers many benefits for subscriptions that can ultimately help scale the brand. Brands can attract new customers through current community members who leave positive reviews and engage with the brand on social media. These not only foster brand loyalty and increasing lifetime value, but also create valuable feedback loops to improve subscription product offerings. And, when brands interact with community members who engage on social media, they send a signal that they are present and able to deliver a strong customer support experience.
Possible Challenges to Creating an Ecommerce Subscription Service
What are some of the hurdles of running an ecommerce subscription service? For many businesses, the main pain point is shifting from a transactional business model to a relational commerce model. Offering an ecommerce subscription means recalibrating your business processes to embrace this shift.
1. Transitioning to relational commerce business processes.
With a transactional ecommerce store, your main focus is attracting customers and getting a sale, then moving on to the next customer.
With a subscription model and relational commerce, you don’t focus on one and done conversions. Merchants retain subscribers by forming a bond and sense of community around their products, which boosts brand loyalty and drives repeat purchases.
Subscribers are more loyal to strong brands whose offerings align with their personal values. When you can build a brand community around your subscription offerings and create an engaged group of customers, that’s the sweet spot.
2. Lack of differentiation from other subscription services.
Why should future customers sign up for your subscription plan? What differentiates you from your competitors or incentives consumers to become subscribers? These are the main things subscription merchants need to think about to have success.
Differentiation and diversification are key to standing out in a saturated market. Being smaller or just starting out allows you to be more agile and embrace innovation. Successful merchants are able to utilize their data to understand their customers, form a plan of action and meet customers where they are and where they’re going.
Tips for Running the Best Ecommerce Subscription Service
No matter your industry or focus, there are few key themes for setting up your ecommerce subscription service for success. The bottom line: Get to know your customers as deeply as you possibly can, track your learnings over time and pivot your offerings to meet customers’ needs. The more seamless you can make your user experience, the happier — and more loyal — your customers will be.
1. Track KPIs and data.
It’s easy to make assumptions about your customers and their spending habits, but if you’re not using data to back up those beliefs, you’re willfully stumbling around in the dark. Properly tracking the right data is often the lifeblood of thriving subscription ecommerce platforms. Important metrics to consider are customer churn rate, customer acquisition costs (CAC), average order value (AOV) and your customer lifetime value (LTV) or average customer value.
Due to their recurring nature, subscriptions grant merchants an incredible opportunity to collect data about their consumers, which can be harnessed for more in depth personalization (think personalized recommendations, offers or discounts).
2. Make sure you have the right ecommerce platform.
BigCommerce. Shopify. Woocommerce Subscriptions. Subbly. Different ecommerce platforms are better suited for different needs — but with so many different options to choose from, it can be hard to decipher which would best serve your subscription platform.
Are you looking to run a fairly basic monthly subscription box offering? Are you looking for a niche custom headless build? Or are you looking to implement an omnichannel business model, where customers are getting the same, high-quality brand experience whether they are purchasing off your website, social media or in a brick-and-mortar store? What will your pricing model be? What payment gateways will you be using? What will your transaction fees be from your ecommerce platform? What does the subscription management experience look like?
These are important questions to answer when running a subscription-based business. You need to find the ecommerce solution that works best for you and various platforms are better suited for different needs. For example, for merchants who want to offer an omnichannel business model, BigCommerce is an ideal platform. Their documented four pillars of omnichannel success (sales channels, marketing and advertising, operations and fulfillment) allow you to meet your customers where they are.
Do your research before committing to a subscription ecommerce platform and find the one that best suits the needs of your business.
3. Incentivize autopayments and auto renewals.
Subscriptions are ideal for businesses because of the predictive nature of their recurring payments. Making those repeat orders as frictionless as possible is beneficial to both merchants and subscribers, and ensuring customers can make repeat orders on-site benefits your engagement and SEO.
Incentivizing autopayments for your subscriptions provides the customer with convenience and allows the business to more accurately forecast future revenue. You can incentivize subscription products and autopayments over one-time purchases with discounts or bundle deals.
Auto renewals, on the other hand, can be a very valuable retention strategy. Losing a loyal customer because their credit card expired or because they forgot to renew their subscription products is a devastating outcome.
Letting customers know of the various payment options and incentivizing subscription plans that include auto renewals saves your business hardship down the road. Smart businesses also know to notify their customers before their subscription renews. If you want to keep customers in your subscription program and preserve a positive brand affinity (and avoid a headache for your customer support team), notify your customers in advance of any charges going on their account.
Including options to skip a delivery or swap a product is equally as important in these notification emails. Data shows that subscribers who take skip or swap actions stay around for more than twice as many subscription periods as unengaged customers.
4. Make sure the subscriptions align with business goals.
Subscriptions in the ecommerce world are skyrocketing in popularity right now, and they aren’t showing signs of showing down. But starting a subscription business on a whim is no guarantee of success.
Make sure that your subscription offerings align with your business goals long term. Will you dedicate the services and tools necessary for your subscription business to thrive? Are your products optimized for subscriptions, or are they too niche to be ordered on a recurring basis?
In the right hands and supported with the right resources, subscription platforms are a revenue generating machine. Just make sure the business is providing the right services for that machine to be well-oiled.
Key Examples of Ecommerce Subscription Merchants
It’s clear that subscription businesses can take endless forms, and offer enormous potential for both businesses and consumers. Now, let’s dive into a few key examples of merchants that are raising the bar with their recurring product offerings.
WebEyeCare is a contact lens and prescription eyeglasses seller that offers consumers a variety of different brand options. Their subscription service falls under the subscribe-and-save model, offering a discount on all recurring orders. However, it also contains some elements of access subscription, as subscribers have access to a dedicated customer service representative.
2. Pure Canna Box.
Pure Canna Box is a curation subscription service that delivers an assortment of customized, all-natural CBD products on a monthly cadence. Items in each delivery are personalized based on an initial quiz that takes customers’ preferences into account, such as their frequency and preferred method of consuming CBD and any allergies.
3. First Aid Beauty.
First Aid Beauty is a skincare brand geared for sensitive skin that offers its products in both major retailers such as Sephora, Ulta and JCPenny and on its own ecommerce site. It offers its products on both a one-time purchase option and a 15% off, subscribe-and-save option for recurring orders, in addition to other benefits such as free shipping and four free samples with every order.
Key Takeaways for Businesses
When considering how to build thoughtful subscriptions for your business, remember: relationships build over time. Keeping your customers around longer all depends on how well you’re able to learn from those customers and listen to their needs, pivoting to meet them where they are with a seamless customer experience and flexible, customizable offerings. The results — increased customer satisfaction, average order value, lifetime value and more — speak for themselves.
Santa Monica Seafood was officially founded back in 1939 on the Santa Monica Pier. One or two things have changed over the years. They still offer the highest quality and selection of seafood to restaurants and customers at their two Southern California retail locations. However, now customers nationwide can experience their lobster tails, swordfish and more through their Dock Direct online store.
The COVID-19 pandemic has had a significant impact on people worldwide, affecting everything from their jobs and social lives to how they shop and where they eat. Overnight many of the restaurants the seafood brand company supplied were shuttered. At the same time, those restaurants’ former customers were missing the seafood dishes they formerly enjoyed. The direct-to-consumer business exploded as people decided to try cooking their favorites for themselves.
Fishing for the Right Fit
As Santa Monica started to investigate expanding their direct-to-consumer ecommerce business, they knew they needed to continue to prioritize their customers and give them the best possible experience. They also knew, as they were still figuring out how this new customer base was shopping, they would need a flexible site that would let them make changes quickly.
As Alfredo Chavez, Director of Ecommerce at Santa Monica Seafood, explains: “We had a deep relationship with our customers we wanted to continue. The amount of flexibility that was offered by the platform was key to us because we didn’t know exactly what our direct-to-consumer offering was going to look like. We had some broad strokes. But we didn’t know, for example, that it’s very important to customers that they be able to choose the shipping date. And we didn’t know if they would prefer to choose the species or have it pre-selected because buying fish was new to them.”
They considered Magento and Shopify Plus before settling on BigCommerce. Khai Vuong, Director of IT for Santa Monica Seafood, explains: “We wanted to get into a platform that would allow us to grow to thousands, and potentially millions, of transactions per month. So that’s why we started the journey, looking at multiple solutions out there. BigCommerce strikes the perfect middle ground between the large, complex solutions, such as Magento, and a smaller, more agile but restrictive solution, such as Shopify.”
Magento was quickly removed from the options because of the high development costs. “Magento would require more from the IT team to maintain. The security implications, the patching and some of the support on creating content on our web store, maintaining some of the marketing campaign, we considered all of that,” says Vuong.
Chavez explains why BigCommerce ultimately won out over Shopify: “Once we started really digging in and talking to our developers as well, BigCommerce became the easiest choice. It offered the most flexibility, both in terms of programmatically and how easy it was to make adjustments.” Chavez appreciates that his team can easily make adjustments to themes as needed.
A Site That Works for Everyone
The flexibility was incredibly important because it allowed Santa Monica Seafood to make a site that worked both for developers on the backend and the marketing team on the frontend.
“One of the advantages of BigCommerce that really stood out is the Page Builder widget,” says Vuong. “That allows our creative director to not only create the store, but also to maintain the content of the store without involvement from IT. That is absolutely crucial for us, as we go through the pandemic and approach the migration of our entire business over to a new ERP system. The IT team really needs to focus on the ERP side.”
Speaking from the marketing side Chavez adds: “I have all the freedom to do whatever I want to build this up. With a tool like BigCommerce, it’s easy. So, I never worry about, ‘How do I do that? How do I put a banner up? How do I end this promotion or start a promotion? How do I offer a buy-one-get-one-free [offer]?’ All that stuff is just built in. Once you’ve used it once, that’s it. You’ve learned it. It’s like a bicycle, you’re not going to forget how to do it.”
Santa Monica Seafood leverages headless commerce — that is using a separate frontend and BigCommerce for ecommerce on the backend — to provide even greater flexibility. Vuong explains: “The headless commerce aspect allows us to get a store up and running quickly, capitalize on the market that was out there and start broadcasting our presence out to our consumers. But it allows us the flexibility and the power to grow into something vastly larger than what we even had in mind when we started out.”
Giving Customers What They Want
Adaptability has been incredibly important as Santa Monica Seafood has explored new markets and new customer bases. Chavez has been able to experiment to explore ways to improve the conversion rate and give customers what they want.
“When I started running Google ads, I was getting a good amount of traffic, but I was getting very low conversions,” says Chavez. “I went in. I changed some verbiage. I added a first purchase coupon of 10%, all on my own, and my conversion rate went up. The customer needs a little bit of incentive to complete that purchase. We can do that.”
But not all customers were coming through Google Ads, so Chavez made sure to address all touchpoints to leave no customer behind. “We added the 10% to a banner on the landing page and as a coupon when you sign up for the newsletter. At every step of the way, it was easy to communicate to my customers, because BigCommerce has the tools. We also enjoy the seamless integration with Klaviyo to work the offer into our email flows. So every chance I get, we provide a possibility for a customer to know about that first 10% coupon.”
The company is also listening to its customers when it comes to feedback. Some didn’t like that they were using styrofoam packaging, so they shifted to curbside recyclable packaging. Another way they’re addressing their DTC customers’ needs is by adapting the fulfillment process to address all preferences. For example, when customers wanted a curbside pickup option from their two retail locations, they were able to add that easily. They’re also using ReCharge, which integrates with BigCommerce, to create a subscription plan so customers can set up recurring deliveries.
Teach a Man to (Cook) Fish
One more way Santa Monica Seafood supports their new customer base is by providing content in the form of recipes to help shoppers master cooking their favorite dishes and explore new ways to enjoy seafood.
“The BigCommerce blog allows us to very easily create and maintain recipes, which is very important to drive customer engagement and also purchases, by giving customers ideas on what they could make with our products. It was a must-have feature during our product selection phase, and we love the current implementation of it in BigCommerce,” says Vuong.
From the marketing side, Chavez enjoys how easy the process is: “I can throw recipes up there at a moment’s notice, or on a consistent basis, and not have to worry too much about how to build the content out and what I want it to look like.”
Never Stop Experimenting
While Santa Monica Seafood has now built a beautiful site with an exciting new customer base, they can’t rest on their laurels. Things are constantly changing, and so too must the site adapt to keep up.
“Since restaurants started opening back up at the end of February, what was working isn’t working anymore,” says Chavez. “My traffic started to dip. And my ad words budget had to be adjusted. It was a direct correlation from opening up, to losing traffic, to then having to adjust how I sell products. For example, I was selling more crab legs and lobster tails when restaurants were closed. Now that they’re open, I’m more focused on everyday items like wild-caught fish, salmon, wild-caught halibut, things you might prepare on a Tuesday night, instead of something that you miss from a Saturday evening dinner at your favorite restaurant.” Being able to pivot quickly to adapt to changing customer behavior has been an important piece of Santa Monica Seafood’s strategy.
Every business has their unique challenges. Santa Monica Seafood solved theirs by finding an ecommerce platform that supports their need for flexibility so they can continue to adapt as they explore new audiences. On BigCommerce, they can add new fulfillment methods, quickly spin up new content or promotions and not affect their backend development work.
Some of the challenges they experienced mirror the pain points of other enterprise businesses as they seek to adapt to a changing retail landscape. From paying too much for tech to overreliance on developers, you can explore some of the biggest challenges experienced by ecommerce businesses today — and how they’re solving them — in this data-driven report from Digital Commerce 360.
Is your business growth being constrained by these pain points? Get the full report here to find out.
This material does not constitute legal, tax, accounting, or other professional advice and is only for general informational purposes. Readers should consult a qualified professional to obtain advice for their own circumstances and supply chain.
On 1 July 2021, the 27 member states of the European Union (EU) will be making changes to value-added tax (VAT) obligations. The changes will affect businesses that sell goods from one EU country to another (known as distance selling) as well as businesses that sell goods which are imported from a non-EU country and delivered to an EU shopper. There are also changes to the rules for business to consumer services.
The changes aim to simplify tax filing for all merchants selling within and to the EU, as well as assist EU businesses in competing on equal footing with non-EU businesses who may not currently charge VAT. This article provides an overview of the changes coming for EU and non-EU merchants selling to shoppers in the EU.
1. Changes for Intra-EU Distance Selling
These changes are applicable to merchants with existing stock in the EU which are sold cross-border from one EU country to another (for example: selling goods located in France to a shopper in Germany). Specifically, the changes are in relation to:
- 1.1 Withdrawal of distance selling thresholds
- 1.2 Introduction of One Stop Shop (OSS) filing
- 1.3 Introduction of EU-wide threshold for micro-businesses
1.1 Withdrawal of distance selling thresholds
Until 30 June 2021, the EU distance selling thresholds are as follows:
- €100,000 per annum: Germany; the Netherlands; Luxembourg; Northern Ireland which is still in the EU VAT regime (£70,000)
- For other countries of the EU, it is €35,000 per annum or local currency equivalent
From 1 July 2021, the EU distance selling thresholds will be replaced by an EU-wide distance selling of threshold of €10,000. This means from 1 July 2021, merchants selling intra-EU cross-border, must charge VAT at the rate applicable in the shopper’s EU country of residence from the very first sale if their total cross-border sales across the EU exceed €10,000. Merchants will need to report these sales to the appropriate foreign tax authority unless exempt (see section 1.3).
To coincide and assist with the above change, the EU is introducing One Stop Shop (OSS) filing which provides a new way to file VAT returns for ecommerce merchants engaged in intra-EU cross-border sales (see section 1.2).
1.2 Introduction of One Stop Shop (OSS) filing
From 1 July 2021, merchants in the EU will be able to file a simplified EU VAT return, called the One Stop Shop (OSS), to assist with reporting their intra-EU cross-border sales to multiple EU countries. Merchants do not need to be registered for VAT in the EU countries that are included in their OSS filing, so long as those included are not their home EU country or an EU country where they have a physical location or hold inventory.
Merchants will be required to submit an electronic OSS filing using their domestic OSS portal on a quarterly basis, as well as keep a record of all reported sales for at least 10 years.
For the EU countries where the merchant has a physical location or holds inventory, such as in a warehouse, merchants may need to be VAT registered and file a domestic VAT return in each country.
OSS minimizes the overhead of registering for VAT in every EU country where intra-EU cross-border sales occur and simplifies the tax filing process by consolidating all relevant intra-EU sales to one OSS filing.
1.3 Introduction of EU-wide threshold for micro-businesses
Merchants with less than €10,000 per annum in intra-EU cross-border sales of B2C goods and services will be exempt from the obligation of completing an OSS return. Instead, eligible merchants will be allowed to charge their domestic VAT rate and report the sales below this threshold within their domestic VAT return.
2. Changes for Non-EU Merchants Exporting Goods to Shoppers in the EU
These changes are applicable to non-EU merchants that are selling cross-border from a non-EU country to an EU country (for example: selling goods from Australia to a shopper in Italy). Specifically the changes are in relation to:
- 2.1 Withdrawal of VAT exemption threshold for low-value consignment imports
- 2.2 New €150 VAT cap for imports to use new simplified filing
- 2.3 Import One Stop Shop (IOSS) filing
2.1 Withdrawal of VAT exemption threshold for low-value consignment imports
From 1 July 2021, the current VAT exemption for goods in low-value consignments (up to the value of €22) imported for delivery to shoppers in the EU, will be withdrawn. This means, merchants currently taking advantage of this existing VAT exemption will need to understand and prepare for any new schemes that are applicable from 1 July 2021 (see section 2.2).
2.2 New €150 VAT cap for imports to use new simplified filing
From 1 July 2021, VAT on importing goods into the EU can be paid under an optional simplified regime where the goods are part of a consignment of an intrinsic value not exceeding €150 and the goods are imported from non-EU countries for delivery to shoppers in EU countries.
The €150 intrinsic value is essentially the price of the goods excluding VAT, transport and insurance costs if separately itemized, and any other taxes or charges. If the intrinsic value of the goods in the consignment is €150 or less, merchants will still be required to collect VAT on separately itemized transport/insurance costs. For example:
Price of the goods as indicated in the invoice: €140
Transport charges as indicated in the invoice: €20
VAT (20%) as indicated in the invoice: €32
Total invoice amount: €192
Merchants with consignments meeting the above criteria can choose from one of the following approaches:
- 2.2.1 Collect the equivalent import VAT at point-of-sale and report and pay the VAT collected to the EU on a monthly basis through the IOSS filing
- 2.2.2 Merchant pays the import VAT or DDP (Delivery Duty Paid)
- 2.2.3 Shopper pays the import VAT or DDU (Delivery Duty Unpaid)
2.2.1 Collect the equivalent import VAT at point-of-sale and report the VAT collected to the EU on a monthly basis
To assist ecommerce merchants that choose to take this approach, the EU is introducing the Import On Stop Shop (IOSS) filing, a new way to file VAT returns for ecommerce merchants engaged in cross-border sales from non-EU countries to EU countries (see section 2.3).
2.2.2 Merchant pays the import VAT or DDP (Delivery Duty Paid)
Merchants that opt to pay the import VAT at the time of import, which is also known as DDP (Delivery Duty Paid), can work with their shipping provider to have the shipping carrier bill for the import VAT on a per shipment basis.
This approach streamlines the sales process and minimizes unexpected costs on the shopper, which can result in negative feedback and returns. BigCommerce is partnered with a number of cross-border solutions which can offer this service, including; Global-E and Zonos.
2.2.3 Shopper pays the import VAT or DDU (Delivery Duty Unpaid)
Merchants can also opt for the shopper to pay the import VAT at the time of import, which is also known as DDU (Delivery Duty Unpaid). In this scenario, the import VAT may be first paid by the shipping carrier or customs agent on behalf of the shopper, in addition to any customs brokerage fees. They will then bill the shopper and release the goods once paid.
If the shopper refuses to pay the bill, then the goods may be returned to the merchant who may then be obligated to pay any import costs and return shipping fees.
Separately, if a merchant is using an OMP (Online Marketplace) or platform, then the OMP or platform will be liable for VAT on those sales. BigCommerce is not a facilitating OMP or platform.
Note: Import VAT as well as import duties will continue to apply, as they do today, to all consignments imported to EU countries above the €150 threshold.
2.3 Import One Stop Shop (IOSS) filing
From 1 July 2021, merchants that choose to collect VAT at the point-of-sale for all consignments not exceeding €150 being imported from non-EU countries to shoppers in EU countries, will be able to file a EU VAT return, through the Import One Stop Shop (IOSS). Merchants only need to register for IOSS in one EU state and they will be issued a unique IOSS identification number which should be listed on all packages sent to EU countries. This will indicate to customs authorities that VAT is being properly declared and help ensure speedy customs clearance.
Unlike the OSS, IOSS will be a monthly filing submitted to a tax authority in one nominated EU country and it will declare import VAT due in all EU countries. It will be particularly useful where the merchant’s shoppers are located in other EU countries and the merchant wants to take care of the import VAT on behalf of the shopper.
Finally, IOSS is not compulsory for consignments of an intrinsic value not exceeding €150. Merchants can instead work with their shipping carrier to pay the import VAT on their behalf before being billed for it by the shipping carrier or alternatively, pass the import VAT onto shoppers to pay (see sections 2.2.2 and 2.2.3).
Note: Non-EU merchants, including from the UK, may need to appoint a VAT Intermediary to act as their agent in a similar way to a Fiscal Representative to support their EU VAT registration under the IOSS (learn more here).
Frequently Asked Questions
1. How can I register for OSS / IOSS?
Each EU country will have a domestic online OSS portal where you can register. This single registration will be valid for all sales to consumers in other EU member states where merchants don’t have a physical location or stock inventory. However, non-EU merchants wanting to register for IOSS in the majority of cases will likely need to apply for IOSS registration through an intermediary.
2. In which EU country should I register for OSS / IOSS?
For OSS registration, EU merchants must register in the EU country in which they are established and non-EU merchants should register in the EU country they hold stock. If there are multiple locations, then the merchant may choose the EU country where they want to register. For IOSS registration non-EU merchants are free to determine which country to register but are likely required to appoint an intermediary.
3. What’s the benefit of registering for OSS as an EU merchant?
Using OSS will simplify the filing process and save merchants time and compliance costs in from registering for VAT in multiple EU countries where they sell to shoppers.
4. Does the €150 import VAT threshold include or exclude tax?
The €150 threshold is exclusive of tax and includes the value of the consignment of goods being shipped. You can also exclude separately itemized shipping and transport costs from this threshold, but you must remember to add VAT on these amounts.
5. I’m still not sure how the upcoming EU VAT changes will impact my business. Where can I go for more information?
If you’re unsure how these changes will impact your business and the changes you need to make to support them, consider contacting a tax consultant or lawyer for more information.
6. Is BigCommerce a marketplace or facilitator?
BigCommerce is not a facilitating OMP / platform.
7. How is Bigcommerce supporting sales tax calculations involving Northern Ireland?
In partnership with Avalara, when AvaTax is the enabled tax provider, BigCommerce will be sending a country code of “XI” when requesting tax quotes involving Northern Ireland to ensure the most accurate sales tax quotes are returned by AvaTax.
8. Are there solutions available on BigCommerce that can assist with addressing these changes?
Avalara AvaTax can assist with VAT registration, collecting the equivalent import VAT at point-of-sale and reporting VAT returns.
Global-E and Zonos can assist with import VAT collection (DDP). Finally, ShipStation can assist with international shipments, commercial invoices and customs declarations.
9. What if I have Manual Tax enabled on BigCommerce?
If Manual Tax is enabled, you will not be able to collect the equivalent import VAT at point-of-sale based on the consignment not exceeding €150. Instead consider DDP (section 2.2.2) or DDU (section 2.2.3).
10. How do I customize my BigCommerce invoices?
There are four editable invoices in BigCommerce, including; email invoice, merchant printable invoice, shopper printable invoice and detailed customer printable invoice. Find out more about how to customize them here.
- European Commission: Modernising VAT for cross-border e-commerce
- European Commission: All you need to know about the One-Stop Shop (OSS)
- European Commission: All you need to know about the Import One-Stop Shop (IOSS)
- EU July 2021 ecommerce VAT Package
- 2021 Guide: ecommerce EU VAT reboot
- Understanding the UK Value-Add Tax: How to Prepare for Brexit as an Ecommerce Business
This material does not constitute legal, tax, accounting, or other professional advice and is only for general informational purposes. Readers should consult a qualified professional to obtain advice for their own circumstances and supply chain.
Data, analytics and business intelligence are common topics in the business world. Businesses across sectors, including ecommerce, are investing heavily in new technologies around data collecting and use of data.
That’s because data-driven decision making is more important than ever for ecommerce businesses as they seek to understand their audience, make tactical business decisions, and stay ahead of competitors.
However, while most businesses are well aware of the importance of leveraging data for the business insights it can provide, many struggle with best practices around using data to inform business outcomes.
In this post, we’re sharing some of the challenges ecommerce businesses face with data, how the right combination of strategies and technology solutions can help provide much-needed insights, and examples of ways BigCommerce merchants are using data solutions and insights to drive their business forward.
The Challenge: Too Much Data, Not Enough Insights
According to a report by Forrester called “Data Literacy Matters,” 90% of global data and analytics decision makers are focusing on prioritizing data insights in business decision making. The same report indicates that 91% of organizations report that they struggle with improving their use of data for business insights.
Businesses are more eager than ever to make investments in data and recognize its importance. Yet, many still struggle to turn their data into insights — and these insights into actions.
In fact, a Forrester states that between 60% and 73% of all data within corporations goes unused. Additionally, data from Statista identifies that 25% of companies are struggling with too much data.
This is where technology solutions can help you build a data-driven business.
Technology Solutions That Can Help You Make Data-Driven Decisions
Utilizing the right combination of data solutions is one way merchants can generate insights that allow them to make data-driven decisions and create customer experiences that help their businesses grow.
1. Data warehouses.
A data warehouse is a central repository or data catalog of integrated data, usually from multiple sources. A strong data warehousing architecture can provide a business with valuable data points.
It isn’t just huge enterprises that can use data warehouses to gather information that is relevant to their businesses. Data warehouse tools can work with businesses of all sizes. While the term “warehouse” brings to mind a physical place, many tools are available on the cloud, making them ideal to scale to the size you need.
Google BigQuery is a great example of a data warehouse that BigCommerce has built a native integration with for merchants on Pro and Enterprise plans.
Google BigQuery works in conjunction with Google Cloud Storage. It’s a fully managed data warehouse on RESTful web service that offers a scalable and cost-effective place to store your data. They also have a generous freemium tier and an easy-to-use UI which makes the tool accessible to a broader group of users.
2. Business intelligence solutions.
Data warehousing is a part of business intelligence. So what’s the difference between a data warehouse and a business intelligence solution? Essentially, data warehouses are tools that help you store the data while business intelligence solutions help you to analyze the data in concrete ways to support data-driven decision making and forecasting.
These tools can help you take the abundance of data you have and view it in dashboards that make sense to your various teams. Here are a few examples of these tools:
Google Data Studio is a data visualization tool that provides your team with some powerful ways of looking at your data. It has the advantage of being free and tightly integrated with Google BigQuery. Additionally, BigCommerce merchants can take advantage of pre-built reports to get started with Google Data Studio.
Tableau describes itself as a data visualization software with the goal of helping anyone to understand their data.
- Microsoft Power BI is an industry leader in the business intelligence solutions field. Run by Microsoft, the solution provides interactive data visualizations with easy-to-understand dashboards.
3. Customer data platforms.
Today’s customers seldom just visit one store, make a purchase, and go about their life. They research and shop across multiple sites and platforms before making a decision. Tracking that omnichannel customer journey is where customer data platforms come in.
Customer data platforms, or CDPs, collect data to build customer profiles that can help inform marketing efforts. They work by capturing information as customers move across each touchpoint and aggregate the data so that it can be used by other business intelligence systems.
CDPs can help your business avoid data silos by making sure your teams know who your customers are, how they shop, and what makes them tick. The better you know your customers and their needs, the better you can market to them and solve their issues.
Segment is an example of a CDP that integrates with other business intelligence tools, as well as the BigCommerce platform, and allows you to unify your view of your customers across all products and channels.
Personalization solutions enable businesses to transition from a one-to-many customer marketing strategy to a one-to-one approach. With personalization solutions, you can deliver custom experiences for each shopper through dynamic content, product recommendations, discounts and offers and so much more. Here are some examples of personalization solutions in the BigCommerce partner ecosystem:
Understanding how your customers behave online can give you powerful insights into what’s working and what’s not on your ecommerce site. At its most basic, analytics refers to systematic computational analysis of data, which can be used to measure metrics across web, marketing, search and sales.
Here are some examples of analytics solutions in the BigCommerce partner ecosystem:
BigCommerce Provides an Open Platform for Data
The above types of data solutions have something in common: they rely on each other to work. Business intelligence isn’t something accomplished by one tool, but by a system working together to gather, store, and analyze data into actionable insights. Data-sharing between systems is an important part of this.
The key to taking advantage of the power of data is communication. That is to say: communication between data tools. There is no point in gathering and storing data if you can’t analyze it. And there’s no point in having it analyzed if it’s not viewable in a way that is meaningful for your teams.
That’s why at BigCommerce, we embrace a philosophy of openness, so that you have control over your data and can use the solutions that will have the biggest impact on your business — we like to call this our Big Open Data Solutions.
Big Open Data Solutions is a full product suite featuring both native and best-of-breed partner data solutions that give merchants the ability to aggregate, analyze, understand and use online store data to gain insight into customer behavior to enhance decision-making and improve business performance.
How BigCommerce Customers are Making Data-Driven Decisions
Here are some examples of how BigCommerce merchants are leveraging our Big Open Data Solutions to generate insights and make decisions.
Origin, an apparel and nutrition brand that handcrafts its products in the mountains of Maine, has been optimizing their tech stack to keep up with channel growth. Specifically, the company has leveraged the BigQuery integration and pre-built Data Studio reports to harmonize consumer data from multiple sources as part of their overarching omnichannel strategy.
“BigCommerce’s BigQuery integration allowed us to provide clean, actionable data while avoiding (error prone) manual reporting in order to make better decisions for the business. It’s been key in unifying our data and providing the insights required to make the right investments,” Sid Martin, Systems Analyst at Origin.
For Garrett Wade, a premier provider of fine woodworking tools and hand tools for the garden, the BigCommerce integration with BigQuery has been “game changing” for the company’s analysts.
This integration with BigQuery allowed the business to start looking at actual, accurate data from day one. The company reported spending very little time cleaning and normalizing the data. Plus, they were able to utilize the data to verify the accuracy of the testing environment prior to our launch. This also allowed the company to develop vetted reports right away; thus, creating the space that the development team truly needs to do the more difficult report work.
Being able to analyze how shoppers perform and behave, then churn out detailed reports in Tableau from a single location is not only efficient for the company’s two-person development team, but cost effective.
“When we were evaluating the move to BigCommerce as our platform provider, the integration with Google BigQuery was not high on the decision tree, but after using it for several months now, I can honestly say that this feature confirmed that we made the right choice with BigCommerce. I highly recommend,” stated John Chan, Inventory Planning and Business Intelligence Analyst, Garrett Wade Company.
Fore Ladies Golf
Fore Ladies Golf, a woman-owned business committed to providing women golfers with high-quality golf clothes, launched successfully on BigCommerce in 2018. However, owner Jessica Benzing quickly realized that she needed a solution for reporting and analytics to build a more data-driven strategy for her business.
Turning to Glew, Jessica was able to get a handle on what was working, what wasn’t, and what she needed to do to continue to scale. With Glew, she has a view of her top KPIs to analyze Facebook and Google Ads campaigns; a report on inventory to help manage budgeting and ensure consistent stock levels; and customer segmentation data to run targeted campaigns to her VIP customers, discount shoppers and more.
We know that data has power. As consumers demand more personalized experiences from ecommerce, shop in more omnichannel ways, and generally turn to ecommerce more and more for their purchases, the need to collect and understand data is only growing.
Having an ecommerce platform that supports your data-driven strategy is going to be crucial. At BigCommerce, we believe open SaaS is the future — and data is an important part of that. Being able to choose the data solutions from warehousing to analytics that best support your business intelligence goals and having them able to easily communicate with each other will make all the difference in honing a streamlined data strategy.
Effective decision making starts with data. However, before you can start making decisions, you need the right technology solutions in place to translate raw data into actionable insights.
With that in mind, BigCommerce is excited to share more details about how merchants can take advantage of our partnership with Google and their robust data solutions, including Analytics, BigQuery and Data Studio.
While you might already use Google Analytics for measuring website traffic, product sales, conversion rates, and so much more, you may not be familiar with Google’s advanced data offerings and how they work with the BigCommerce platform.
To help explain, we’ve brought in some of our internal experts, Derrek Pearson, Senior Manager, Product Management, and Mindy Regnell, Market Insights Manager, to answer some questions.
First off, what is Google BigQuery and Google Data Studio?
Google BigQuery is an analytical data warehouse that enables you to bring together all your data from various sources. Once you have your data in one place, you can leverage structured query language (SQL) and artificial intelligence (AI) to ask analytical questions and visualize your data so that you can make strategic business decisions.
Google’s Data Studio is a free visualization tool that you can use to build and customize reports that are easy to share with your team.
So what is the advantage of the pre-built Google BigQuery integration with the BigCommerce platform?
While merchants with no developer skills could always sign up for a free Google BigQuery account, the difficult part has always been moving their data. There’s a lot of development work that must take place, either building the connection yourself or going through third-party tools.
Exactly, it’s not as easy as exporting and importing using a CSV file because there’s only so much data that you can export cleanly into a CSV file. Instead, you’re using APIs, and you probably need to involve a developer, which makes the process more resource-intensive.
With the pre-built integration, we’ve done the work for you to get your BigCommerce data into the data warehouse. Now, you can go into your control panel, follow a series of very simple steps that don’t require any development skills, and at the end, you’ll have your data represented in Google BigQuery.
This enables you to leverage the full power of Google BigQuery on your BigCommerce store data — without taking on a big development project.
Not only is the integration good for merchants, it’s also good for developers because they can spend their time doing other things that will have a bigger impact on the business. For instance, they can create custom reports and scripting, find unique ways to slice and dice your data, or visualize data in new ways using business intelligence tools.
One of the things that BigCommerce has done really well is we’ve been investing in sample scripting and reporting, so all you need to do is change the variables and networks for your store. So we’re solving a lot of those most common use cases already.
How can merchants get started using the pre-built Google Data Studio reports?
So far, we’ve published three Google Data Studio reports: product revenue by category, cost of goods sold, and revenue by city. They’re a great solution for getting started using Google Data Studio with Google BigQuery. You can find them here in our Knowledge Base.
What’s particularly cool about the reports is that there’s a set-up instruction section showing how merchants can copy them, and once they do, it’s their report that they own. Then, they can follow a series of steps to swap out the sample data with their data. Now they have full control over the data and the reports.
Using these sample reports is a great first step in taking your BigCommerce data and leveraging it in a business intelligence tool, like Google Data Studio, to gain insights that can help drive your business. And once you have these first reports, you can build out your own reports to suit your particular needs.
How does BigCommerce’s open approach to data benefit merchants?
Our strategy across the board, data included, is to really maintain an open platform — what we like to refer to as Open SaaS. Merchants can use the best tools that meet their needs, and we aim to reduce any friction and make that process as easy and smooth as possible. And that’s the approach we’re bringing with our data solutions, which we’re calling Big Open Data. We believe this is a unique approach that nobody else is really doing.
To elaborate on what Derek said, generally, with other ecommerce platforms, it’s possible to take your data externally, but they don’t make it easy. For instance, some have very strict API terms of service that restrict where you can take your data. While others prefer that you use their intelligence tools, which may seem like a good solution at first, but you may find that you eventually want to build a custom report that isn’t supported. Many larger organizations often use more than one analytics or reporting tool, so being able to easily move your data into another system can make it easier.
The BigCommerce difference is that we give you control over your data, so you can get very granular with the types of insights you’re generating. You can also use the solutions that you’re most comfortable with and can provide the biggest impact on your business.
For example, your BigCommerce data can be passed through your instance of Google BigQuery, and then you can use your instance of Segment.com to start identifying your customers and building out their journey. And you own the data every step of the way.
Connect Your Data to Google BigQuery Today
For merchants already on the BigCommerce platform, you can get started with Google BigQuery right now by following these simple setup instructions. One thing to note is that this integration is only available for merchants on Pro or Enterprise plans. For merchants on Standard or Plus, you’ll need to upgrade to access Google BigQuery.
Additionally, you can explore all of our data technology partners to learn more about additional solutions for business intelligence, customer data platforms, personalization and more.
Within the B2B market, there are several metrics you can measure, analyze and compare. If you don’t want to get drowned in the sea of numbers and graphs, you have to know where and what to look for. Understanding which metrics to prioritize can help you refine your approach and increase your likelihood of converting customers and driving growth.
With that in mind, here are a few metrics we recommend tracking in order to make informed business decisions.
B2B Ecommerce Metrics
1. B2B Lead-to-Close Conversion Rate (CVR).
Conversion rate optimization (CRO) is the process of improving the shopping experience to drive a specific KPI — usually, sales. This is the best rate to see how successful your marketing tactics are as it measures the percentage of website visitors that convert to buyers.
A healthy conversion rate means you have a highly engaged customer base, and it is a sign of growth and success. If it is low, look to user-journey mapping to see where you’re losing site visitors.
Because B2B sales cycles often take longer to close than B2C sales, calculating your conversion rates and assessing the performance of marketing campaigns is even more crucial. That’s why it is important to keep an eye on these numbers throughout the entire year rather than a month-to-month basis.
2. B2B Initial Customer Acquisition Cost (CAC).
Acquisition metrics are focused on how effective your website and other marketing efforts are at driving people to visit your site. More than just generic traffic volume, acquisition metrics can help you dig into who’s visiting and where they came from — so you can better contextualize traffic numbers.
The customer acquisition cost (CAC) measures how much your company spends to acquire a new customer by looking at your marketing spend and how it breaks down per customer. This helps determine your brand’s total ROI for marketing and advertising. Having an active awareness of your CAC can help prioritize campaigns within your budget.
For some B2B businesses, it’s the only metric that shows how good (or bad) their performance and efficiency is. For others, it’s a clear indicator something is not done right. But these numbers can help you detect where you need to make some changes (program, campaign, initiative, channel, approach) and as a result it clearly highlights the positive and negative effects of those changes.
Marketing percentage of customer acquisition cost
This one is a mouthful and is a bit technical. However, it’s a very telling metric that shows how well your marketing team’s performance and spending is.
Essentially, the marketing percentage of your CAC indicates how much money marketing spends within a time period and how many new customers it generates. It gives you insight into how well your marketing program is functioning and can be used to make better sales and marketing decisions.
Marketing originated customers
The marketing originated customers metric gives you the chance to have a clear insight into how much your customer percentage has been gained through marketing. You might have invested in tools and techniques and therefore, you should expect your audience to grow consequently.
Understanding this metric and it’s calculation helps identify how many individuals found out about your business and helps you know exactly what to do next and how to do it better. This metric plays a role in helping your company grow and acquire new business.
3. Churn rate for B2B ecommerce.
The churn rate is a brutally honest metric that relates whether or not you have a viable business. Churn rate is a business metric that calculates the number of customers who leave a product over a given period of time, divided by total remaining customers.
This helps you determine the stage at which you are losing your customers and from there you can develop a strategy to improve the interaction with your product or service. Knowing the churn rate is important because it can be much easier and cheaper to have more returning customers than trying to attract new ones.
B2B Ecommerce Metrics Key Takeaway
If you are committed to improving your sales approach, you need to be tracking the right metrics. It is impossible to make an effective, informed decision without having the right metrics to guide you.
By tracking the above metrics, you can identify areas where you need to make changes and improve your overall sales approach. Depending on your business and your needs, there are several other metrics that can be measured, calculated, compared and changed to help improve your business.
For more information about B2B ecommerce, Imagination Media has prepared an information-brimming ebook for B2B merchants. You’ll learn more about metrics and the trends affecting them.