Roy Erez, Chief Executive Officer and Co-Founder of Loop Commerce, the alternative checkout technology company focused on online gift giving, spoke with PYMNTS about the need to convert shoppers into buyers in the brave (new-ish) world of eCommerce.
Erez notes that even while a retailer’s customers may be shopping for their own needs, data show that they are not looking to buy gifts for others at the same store. In fact, says Erez, Loop estimates that these very shoppers “go elsewhere to spend 15 to 20 percent of their total online purchases” to buy gifts. That of course means lost sales.
The reason for those lost sales? Erez posits that customers face a number of obstacles that block ease of purchase.
Loop’s research shows that retailers who indeed manage to capture gift sales that otherwise might go unconsummated have a few advantages. They “understand both the emotional drivers and the transactional needs of gift shoppers,” Erez maintains. “They recognize that offering gift cards is simply not enough."
In order to capture gift sales, Erez has a few recommendations, gleaned through Loop’s analysis of data flowing through its own e-gifting platform, its observations of customer sites (retail establishments such as Macy’s, DVF and Lancome and others), and consumer behavior patterns during traditional holidays.
First, and perhaps most fundamental, according to the Loop executive: Retailers need to make it “easy and intuitive for customers to purchase a gift from your online store.”
Best practices here would include adding a gift section with the most popular gifts organized by tiered categories, ranging from price points to, say, holidays. Wish lists can help too, as they remove the fear purchasers have about purchasing the “wrong gift” for recipients. And graphics matter. As Erez says, “80 percent of millennials find videos helpful when evaluating a purchase online."
Gift giving may also be stymied by buyers’ worries that receipts may show prices, termed a “real faux pas” by Erez, and a key reason why gift cards may not appeal for a special occasion. One illustration, says Erez: “Our data shows that a large percentage of e-gifting users are men, with a 41 percent rate for Mother’s Day.” As an added bonus, these “new” male shoppers also tend to spend about 25 percent more on each Mother’s Day gift purchase than did women.
Don’t overlook the exchange process, cautions Erez, where “hassle-free” exchanges or returns can “increase transaction volume, conversion rates, and customer satisfaction.”
Many shoppers simply opt out of buying certain products online, says Erez, in an effort to keep recipients away from the burden of exchange for, say, color or style. “Our data and customer feedback shows that 60 percent of e-gifts are classified as ‘hard to gift’ items such as apparel, shoes or jewelry, that typically would not have been purchased as a gift,” he explains. Similarly, to reduce friction in the transaction, retailers should consider eliminating shipping and delivery deadlines – which can help spur “last-minute purchases through holidays.
"For Mother’s Day, we saw that 43 percent of all e-gifts purchased were ‘last minute gifts,’” purchased the day before or on that holiday, Erez offers by way of example. Additionally, belated Christmas gift gifting, defined as e-gifts purchased just after the holiday and into the new year, totaled 38 percent of e-gifts.
Finally, Erez states that marketing must be an “always-on” proposition because gift giving is a year-round proposition. Retailers must be prepared to snare consumers with impulse buying – 25 percent of e-gifts over the past 12 months fall under the heading of “Just Because” gifts.
To better understand this data take a look at Loop Commerce’s infographic, “Converting Gift Shoppers Into Buyers – Loop Commerce.”