Photo by Jesse Ramirez
The Covid-19 pandemic changed the ecommerce space dramatically – forcing more shoppers online and causing exponential growth in online retail. Forbes reported that by April, US retailers’ online year-over-year revenue was up by 68%. Conversion rates increased 8.8% in February – a figure more commonly associated with Cyber Mondays – as people stocked up on as much as they could in the panic surrounding the crisis.
This graph shows the online retail activity in revenue growth for the US and UK since January 2020. Graph by Covid-19 Commerce Insight.
As is now the trend with 2020, merchants can expect the fast-approaching BFCM gifting season to look different to previous years. With significant annual increases in sales since the term Cyber Monday was coined in 2005, the annual event saw a 19% increase in total sales in 2019 from the previous year. This trend is expected to continue in 2020, with even more customers than usual taking advantage of online sales due to Covid-19 concerns and social distancing needs. For many people, online shopping has become a part of their lives – a part that’s here to stay.
Then there’s the anxiety that many consumers will feel about being crushed in the middle of crowds of people in the midst of a pandemic. The results of a poll by Morning Consult published in April showed that for 24% of consumers it would take more than six months before they felt comfortable going to a shopping mall. Another 26% said they didn’t know when they’d feel safe enough to visit a shopping center again. This means that for numerous people, online shopping will permanently replace shopping trips of all kinds until a coronavirus vaccine is available. Online retailers can take advantage of these factors in order to attract and maintain customers during the BFCM frenzy.
Despite this, online retailers also need to be more sensitive than ever towards their customers’ situations. Many of them will be feeling the financial pinch caused by the pandemic. They may not be able to spend as much as they normally would on essentials, gifts and the other items that are made available at massively reduced prices during BFCM. Other buyers, however, may be spurred on by the Covid-19 crisis and other events to do good. They may be feeling particularly generous and not only want to buy for themselves, but make financial contributions to charities or other organizations in need.
Whichever category your customers fall in, it’s important to adapt your business to the changes in ecommerce and cater for your customers’ needs. This is the third installment of our three-part series on why you should start focusing on BFCM early and how to prepare your Shopify store for the season of giving.
Financing options for cash-strapped customers
Photo by Morning Brew
Black Friday and Cyber Monday are an opportunity for customers to buy Christmas gifts for bargain prices. But, for many people it is also an opportunity to stock up on necessary household essentials be it non-perishable food, appliances, toiletries, and detergents. Given the detrimental financial impact the coronavirus has had on many families, some people may not be able to make the most of the BFCM sales as much as they’d hoped to. This, of course, could have a knock-on effect on online retailers.
If you’re a merchant who wants to cater for these customers you can look at incorporating an app on your site which gives buyers, who don’t have a credit card, a financing option for their purchases. We previously explored how offering an alternative payment platform for buyers empowers them to manage their purchases in a way that suits their budget, helps them to budget, and gives them more purchasing power.
55% of abandoned carts are due to a total cost of purchase that’s too high. Being able to offer customers a financing option at point of purchase and on your product pages boosts sales, increases conversions, and drives repeat business. It’s definitely worth considering this as your business starts preparing for what most ecommerce stores experience as their busiest and most profitable time of year.
Because in-house credit isn’t really an option for most ecommerce stores, and it comes with a lot of red tape, using a third-party solution is the best way to go. There are a few financing options available, but we’ve found Sezzle to be a reputable option that can be fully integrated with Shopify stores. Having Sezzle on your site encourages buyers to make larger purchases as it allows for them to ‘buy now, pay later’.
Sezzle pays the merchant in full immediately and assumes all the credit risk. It’s a good option for merchants, particularly smaller ones, who aren’t able to cover large amounts of credit themselves and can’t afford the risk of customers who don’t meet payment obligations.
Another reason why Sezzle is a good option is it lets customers sign-up instantly and securely while in checkout, without having to leave the page. Your customers will browse as usual on your Shopify store, add items to their cart, choose Sezzle as their payment option, create an account, complete their order and pay off their purchase over time in four interest-free payments.
A season of generosity
Photo by Lina Trochez
While some customers are counting their pennies, others may be feeling particularly generous and find themselves wanting to contribute to causes close to their heart. Making a donation as part of an online purchase saves a customer from going through the hassle of donating directly to a charity and doing research to ensure they’re a reputable organization.
On top of this, allowing buyers to make donations through your site is likely not only to gain you more customers, but also help you retain the ones you already have. The Cone Cause Evolution Study found that 80% of Americans are likely to switch to a different brand that’s equal in price and quality to one that supports a cause. When choosing between two companies that each benefit a cause and sell the same product, 53% of Americans would rather support a company that allows them to impact the donation by tying it to a purchase. This is one way that consumer consciousness is driving brands to be more socially responsible.
Merchants who want to explore this route ahead of BFCM can look into the ShoppingGives’ Change Commerce retail program. This shopping cart technology designed for Shopify allows customers to choose a cause or charity to donate to, at no extra cost to them, during the checkout process. It keeps the checkout process simple, while offering customers millions of causes to choose from.
All your customers have to do is shop as they normally would by adding items to their cart, then choose their favorite cause when they get to the checkout, and the retailer donates the money (at no extra cost to the customer). It enables merchants to engage customers in their CSR strategy with every purchase, adding great value to the customers’ experience and allowing retailers to create a greater impact.
And while this app personalizes your customers’ shopping experience, it also gives merchants the flexibility to decide how much they’d like to donate to the causes. The options are endless – from donating a certain dollar value or percentage per sale, to making donations for certain products or product ranges only. During BFCM, when product prices are discounted, merchants may even choose to, for example, give 20% off and 20% donation per purchase. The percentage or dollar amounts that a merchant decides to donate can be increased for events such as BFCM and then reduced again afterwards.
If you decide to incorporate functions like Sezzle and ChangeCommerce into your Shopify site, do it well before BFCM so that you have time to test the apps and make sure everything is running smoothly before you get busy. It also gives you enough time beforehand to market the new services that your platform offers. Even more than that, it gives you an opportunity to make your site more competitive in the long-term as you face increased competition in a rapidly growing and changing ecommerce landscape.