Expected Boohoo growth is all the more reason to watch customer retention rates
Tomorrow online retailer Boohoo.com delivers its interim results, expected to continue impressive growth after its acquisition of e-retailers Pretty Little Thing and Nasty Gal. But benchmarking studies by Optimove show that 63% of first-time buyers with an e-commerce brand do not return to make a second purchase.
Even successful e-retailers will need to focus on customer retention to make their momentum sustainable in the long-run.
Alon Tvina, managing director of EMEA for Optimove, comments: “As retail companies like Boohoo and ASOS continue to grow, they will need to keep a firm eye on retaining their existing customers. Customer attitudes have shifted: loyalty is dead, and we are now in the age of ‘value exchange’. Retailers need to focus on offering real value to their customers.
“This can come in many forms, such as pre-orders for new collections, free returns and free shipping, and holiday or VIP bonuses. What is important is that rewards are suited to the customer, and this means retailers will need to get to know what makes each of their customers tick, and market to them on an emotionally-intelligent level.
“To gain this kind of insight into an international customer base, AI and automation programmes will be vital. By automating campaigns and using AI tools, marketers can make smart observations on which marketing works to boost revenue from each type of customer. In this way, retailers can build a long-term relationship with many of the 63% of customers who only buy once. Retailers need to be able to sort through their customers and learn what makes each individual tick, to keep them coming back.”