Payment solution provider Klarna take us through their top tips to Get Online Right for Magento merchants.
With the busiest month in the retail calendar now behind us, now is the ideal time to evaluate what went well and where there’s room for improvement. Here are some key learnings to ensure shops and sites have the right tools to tackle the festive shoppers of the future.
1. Up the pace on processes
During peak season, efficiency becomes more important than ever. Visits to websites can hit an all time high, queues at the till can be half-way out of the door, and demands on retailers can ultimately take their toll. By making improvements in the logistics of selling, retailers can take a huge amount of the pressure off themselves when it comes to the busy season.
Ensuring a smooth delivery system, easy returns, and stress testing for websites can avoid a dreaded crash in the most crucial moments. By employing a simple and organised strategy which can identify the potential pitfalls, peak season can continue to be a profit-driven opportunity and not a loss making necessity.
‘Focus on what they [retailers] can do… Updating delivery estimates on a website, creating a separate section of a store to deal with returns, or finding new ways to let customers pay for quick and easy purchases…’
Retailers should look back at which areas of their business were under the most pressure over the festive season and focus on what they can do to ease this going forward. Whether that’s updating delivery estimates on a website, creating a separate section of a store to deal with returns, or finding new ways to let customers pay for quick and easy purchases, it’s vital retailers look at this sooner than later.
2. Don’t be afraid to ditch discounting
It’s no secret retailers are increasingly discounting items around Christmas to stay competitive, however, our research has shown this isn’t always paying off. A recent Klarna survey of 500 UK retailers reveals that not only are sales becoming increasingly stressful for operations, but their frequency is now on the rise, extending way beyond traditional seasonal sales times. On top of that, over half of retailers surveyed (53%) say the ‘always-on’ nature of sales is having a negative impact on profits.
Discounting can be tricky, and it often feels that it is a ‘must-do’ to stay competitive. However, it is important that retailers work out the true cost to profit ratio. The best way to consider this is; if you are profitable at a 20% gross margin, and you decide to discount by 10% you will need to double sales volume (100% increase) to stay in the black. If that’s not feasible, there are a number of other ways to impress shoppers this season without being out of pocket.
Additionally, over a quarter (28%) of shoppers we surveyed, say sales are too stressful and avoid them altogether, so there are significant benefits to retailers looking to break out of the discounting cycle by providing a better customer journey.
3. Seize the opportunity to win new customers
Peak season brings with it a wealth of customers who may not have discovered you if it weren’t for gift buying. This is a prime opportunity to secure loyalty from shoppers. A great customer experience will keep shoppers coming back and encourage them to spend more, during peak season and beyond.
This can be as simple as reducing steps at the checkout, optimising your mobile channel or offering deferred payment options. With Klarna, you can let shoppers pay for goods up to 30 days later so they can try-before-they-buy and return items they don’t completely love. Klarna also offers the ability for shoppers to pay over time in installments for higher-ticket items, boosting purchase power at the point of sale. Putting the customer first with a smoother payment experience means you’ll have the tills ringing all year long.