Four red flags for ecommerce stores as we enter Q2

Q1 came and went at warp speed, bringing with it a slight stabilization of the growth curve that ecommerce has been on for the past two years. Data from Morning Consult’s new State of Retail and Ecommerce report has pointed to an increasing preference for offline shopping, alongside a normalization of online shopping rates. 

These trends are set to continue into Q2 as we tackle significant increases in the cost of living combined with a decline in consumer confidence. With shoppers potentially tightening their belts and moving further away from the ad hoc online spending they have done so much of in recent times, attracting new customers can be tough. To prevent stalling, it’s time to drive more revenue from the customers already in your database.

Here are the top four red flags to watch out for in your existing customer base that could hinder your growth as we launch into Q2 2022.

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Red flag #1: stepping back from subscriptions 

With the cost of living continuing to increase at alarming rates, many consumers will feel the need to revisit the active subscriptions that they’ve had running in the background, and cut those that feel like luxuries.  The result? Increased subscriber churn. 

How to counter:  

Brands who deploy VIP experiences and perks for their subscribers can prevent and even reverse churn. Subscriber tiers that offer valuable rewards such as bonus points, early access to new products and much more will go a long way towards persuading a customer that yours is the subscription that they should keep over another that simply delivers a product to the doorstep each month. Make sure your subscription offers value and brand engagement outside of just what’s in the box.

Find out how Amora Coffee keeps their subscribers on side here

An example of ecommerce store providing subscription rewards access for its customers

Red flag #2: a greater gap between purchases 

The impact of economic factors on day to day spending may also leave you seeing a change in replenishment patterns. As consumers get used to having less disposable income, they may wait longer to top up non-essential items. The result? Increased time to their next purchase. 

How to counter:  

Brands who are able to get to know their most loyal customers and identify their typical shopping behaviors and timelines will be best placed to counter any changes in those timelines. 

Make sure the customers who shop with you most regularly can continue to by launching incentives such as bonus points or shipping perks, that are linked to specific products. This gives you a greater chance of reducing the impact of increased gaps between purchases. Reminding shoppers that they have unclaimed rewards they could use as part of their purchase will also help motivate their next purchase sooner. 

An example of monthly updates about bonus point and perks from an ecommerce store

Red flag #3: out of stock annoyance 

Many brands are still facing supply chain issues at every turn, and as a result run the risk of frustrating customers with out of stock messages that leave them shopping around rather than waiting patiently for your product. The result? Fewer repeat purchases. 

How to counter: 

Supply chain problems may be beyond your control, but your customers are more likely to be accommodating if they know you’re doing what you can to improve their experience. 

Make every effort to make sure our most valuable customers are seeing minimal disruption by prioritizing them with early access to products as they come into stock, faster shipping options or access to priority waiting lists. VIP experiences that make loyal customers feel valued are often enough to stop them from shopping elsewhere, as they know you’re worth the wait. 

Red flag #4: declining ad engagement

Customers who are doing less ad-hoc and unplanned shopping are still perusing Instagram, but they’re less likely to stop and take notice of great product content. If they’re not window shopping, they will likely scroll straight past the ads you’re spending so much to deliver. The result? Reduced return on your ad spend. 

How to counter:

Consider changing up your ad strategy during this period. As well as your product-led ads, launch some more brand-related messages that showcase your brand story and the values you represent, or tell the stories of your customers who are already using and wearing your products.

This will help you connect with your customers in a way that makes them hit follow, mentally bookmark your brand and prioritize you when they do decide to make a purchase. It’s also a good time to consider other acquisition activities that are less reliant on a shopper stopping in their tracks, for example running a referral campaign that incentivizes your existing customers to introduce others to your brand. 

Ecommerce may be levelling out, but the growth of your store doesn’t have to. The key to your success already exists within your business and your existing customer base is ready and waiting to be re-engaged. 

Don’t wait until we’re halfway through the year to get started! 

Want to get inspired by leaders in customer loyalty? Check out the LoyaltyLion Hall of Fame for 25+ award-winning loyalty programs to inspire your own.

LoyaltyLion Hall of Fame 2021: A celebration of the best ecommerce loyalty programs

About the author

Fiona Stevens

Fiona Stevens is the Head of Marketing at LoyaltyLion. Fiona has over ten years’ experience in Marketing, having worked in-house and agency side across functions including PR, SEO and content. She has specialized in loyalty for retail and ecommerce brands for the past six years.

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