Friday, November 9, 2012

The importance of returning customers

This month, there has been some interesting data concerning what online retailers think about the importance of returning customers and some juicy trends highlighting the real worth of shoppers who come back for more compared to first time buyers.

E-retailer confidence

How customer experience can improve e-retail performance is a focal point of Intershop’s recent The E-commerce Report which gives a comprehensive look at the sector in Europe.
Returning customers are at the forefront of many e-commerce specialists’ activities. 73% of European online retailers believe the experience on their website can influence whether consumers return.

Looking closely at seasoned e-retailers from the continent, 91% are confident that the experience customers have on their website can ensure they come back. In the UK specifically, 82% of all e-retailers are of the same opinion.

So just how valuable are returning customers?
Adobe’s recent whitepaper, titled The ROI from Marketing to Existing Online Customers compared first time shoppers with returning purchasers and repeat purchasers in Europe and the US.
In Europe, the average revenue of a returning purchaser is €5.34, three times higher than first timers (€1.75). Repeat shoppers, those who come back again and again, spend €11.54 per person on average – seven times higher than the typical online shopper.

 

Adobe also highlights average spend trends among first-timers, returning shoppers and repeaters. While the average revenue from first time and returning shoppers have remained pretty much level since Q2 2011, repeat visitors were spending around €5 more by April 2012.

Of course, there are less repeat shoppers than there are first timers, but the average amount repeaters spend mean they are accounting for a bigger proportion of overall revenue.

In Europe, repeat shoppers account for 26% of total online revenue (up from 23% in 2011). In the UK, the figure is a little lower at 16% (but still climbing, from 15% in 2011). In the US, despite only 8% of e-commerce shoppers being returning or repeat visitors, 41% of overall revenue comes from these customers.

How online shops are preparing to entice customers back

Intershop’s data shows that European e-commerce sites are aware of the possibilities for good onsite experiences to turn first timers into repeat customers. So how are how are they intending to achieve this?

Many European e-retailers are confident that a well-delivered multichannel marketing campaign is their key objective, with 49% acknowledging that conversions and basket values will improve if they can ‘consistently market promotions across all channels. ‘
Additionally, 48% are looking to the importance of seasonality and timeliness to try and improve the performance of their sites.


 

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