While it may feel like eCommerce dominates the retail world, online selling continues to be tricky for merchants to measure and refine. Setting up an online storefront can be done in a matter of minutes and it opens access to a web of customer metrics—however, those measures aren’t always indicative of true behaviors (i.e. accidental clicks, bots), and even when they’re adjusted for misrepresentation, observational metrics don’t necessarily provide a clear path to driving purchase.
What retailers of all sizes are learning is that while starting an online store is easy, being profitable has never been harder.
The conversion problem
Let’s take a harder look at retail’s gold standard: conversion. Conversion—actually having a customer complete a purchase—is a notoriously tough task. Customers tend to second guess a purchase before buying, and online there’s traditionally little engagement to prevent shoppers from abandoning their carts. Even if they do purchase, 30% of the time they’ll return items, an added cost for merchants.
As a result, 1.5-3.5% conversion rate is normal for online retailers. Even market standouts like Amazon convert in the single digits to low teens, or eight to thirteen percent. Compare that to in-store traffic, which converts at an average of 15-30 percent.
Despite online shopping’s detailed analytics, high conversion remains in the domain of brick-and-mortar stores.
What is physical retail doing right?
There are a few obvious hypotheses to explain higher conversion rates in stores. On one hand, in-store shopping offers immediacy and instant gratification. Though this is a big benefit, we’re learning that customers receive the same immediate “retail therapy” mood boosts from digital shopping as they do perusing a sales rack.
Another explanation might be that customers browse online only to buy in-store. However, this claim is largely dependent on the industry and overall, not as prevalent as we think. 83% of shopping journeys still happen within a single channel.
We attribute a good amount of in-store success to great sales help.
Great sales help results in:
- Very quick answers
- Customer needs addressed
- Customer confidence reassured
- A very, very easy purchase
As a customer, you can expect to get all the answers you need in one visit and to walk away with the right product.
The power of your best associates
Let’s dive deeper into the power of in-the-moment sales help.
Think of an associate you’re always excited to see, who knows your taste, remembers your favorite order, and makes great suggestions to delight you and encourage you to try something new. This knowledgeable associate can make or break a customer experience and further a lifetime relationship by supporting the customer through a purchase and lifetime of brand loyalty.
What does that associate help with specifically?
Without proper help, customers are left to assessing their own needs and matching them to terms or categories used by the merchant.
Navigating product selection
In a related role, associates help customers make a selection, or curate a bundle of products. This is particularly important in environments where the product catalog is overwhelming or products aren’t apples-to-apples comparisons.
Even when a customer has made a choice, they must feel confident enough to follow through with the purchase. Associates help to affirm that a product is a good match, fits well, or delivers on the required need.
Creating a feedback loop
A stellar associate is not only helpful to the customer, but an asset for the brand to report on up-to-date customer trends and provide feedback for improvement.
Bringing the magic of offline, online
Luckily, many merchants already have some of their best associates accessible online through live chat solutions. Yet, many merchants silo chat as a customer service tool, only assisting with questions post-purchase.
However, when customers engage with chat pre-purchase, retailers see a 60% increase in the order value and an average conversion rate of 12%.
Leveraging chat as a sales and engagement tool
It’s time for digital retailers to bring live engagement earlier into the sales funnel. Advising and guiding customers, from the moment they experience your brand to the point of purchase, can help them overcome their fears and concerns while providing the ease of use that motivates them to act.
We have designed Caravel as a new type of online retail experience, that helps customers build confidence towards their purchases with support mechanisms.
Caravel’s best practices for conversational selling
Customer Experience is our KPI
We see that exceptional customer service is a critical driver for conversions. Rather than prioritize other pre-purchase metrics such as impressions or engagements, we prioritize delivering high-value customer experiences that make customers feel invested in their purchase and the brand.
Suggest the intuitive, not the obvious
Our AI team uses Deep Learning to understand in-context needs and semantics of conversations to guide customer's into products. Rather than suggesting the same shirts a customer has already purchased, we’re matching the value of an associate who can put together the perfect outfit.
Limit the guesswork from understanding your consumer
While there is much to be learned from observing and analyzing online customer behavior, we encourage merchants to harness the power of direct conversation to identify customer needs and priorities and gather feedback. Conversational commerce adds a valuable layer of explicit customer input to business insights and strategies.
Learn from each response
We’re constantly analyzing unstructured information that holds key details your customers want and insights that you should have: reviews, chat logs, merchandise data, knowledge bases, and more. This enables us to surface real time insights that can inform you on what is motivating your customers to buy and quickly alert you of concerns customers have on merchandise. At the same time, giving your customers quick access to important details they care about, like product quality, or how something looks, feels, or fits.