6 Multichannel Takeaways from Best Buy’s Marketing

Challenge: Marketers are having a tough time maintaining engagement with today’s multichannel, multi-device consumers.

According to ShopperTrack, which uses a network of 60,000 shopper-counting devices to track visits at malls and large retailers across the country, retailers got only about half the holiday traffic in 2013 as they did just three years earlier. However, online sales increased by more than double the rate of brick-and-mortar sales this holiday season. According to the study, while shoppers visited an average five stores per mall trip in 2007, today they only visit three.

One company that understands this is Best Buy. While the company’s online sales of $1.32 billion for this past holiday season were up 23.5% from a year earlier, it was not enough to pull out a win overall due to lower in store sales. Chief Financial Officer Sharon McCollam noted in a conference call with analysts that expanding the company’s online presence will be a top priority in 2014.

The company has also made great strides in moving into the mobile space.  Amy Halford, senior digital brand manager of interactive marketing and emerging media at Best Buy noted in an interview, “we have the opportunity to better connect and be relevant to customers whenever, wherever they might seek us.“

6 Takeaways:

Here are 6 lessons Best Buy learned by listening to their multichannel customers. These can help you as well:

1. Keep customers’ rapidly changing needs and behaviors at the forefront of your strategies.

2. Provide the capability to easily research products and connect with you. This is critically important to customers. Many want to do more than simply transact.

3. Customers expect a consistent experience regardless of which entry point they access, be it online, phone, or store. 

4. Test frequently, learn quickly, and scale appropriately.

5. Reinforce all marketing efforts across media channels, including those conducted for specific audiences, such as Spanish language campaigns.

6. It’s critical to focus on meeting customer needs from a multichannel perspective, and not focus solely on growing a particular channel.

Free Shipping and Returns: Cost, Value, and ROI

The Challenge: It’s no secret that online shoppers don’t like to pay for shipping. With carrier rates on the rise, ecommerce businesses are fully aware that there is no such thing as “free shipping”, it is an expense that has to be factored into pricing one way or another.

Many successful ecommerce marketers offer free shipping, and even free return shipping, as part of a “no hassle returns” policy. Zappos is famous for offering free shipping and free 365 day returns as part of their efforts to deliver a “wow” experience. The reward and ROI Zappos receives in exchange for this policy; 75% repeat buyers, even though their products are priced higher than competitors in order to cover the costs associated with delivering that excellent customer experience.

Studies on the Benefits of Offering Free Shipping

Compete.com shows a comparison between two similar retailers and the difference between Patagonia, offering everyday low shipping and The North Face, offering free shipping for holidays.

The numbers also indicate that offering free shipping increases search traffic as well as conversions for The North Face.

The Find is an online shopping comparison site where retailers can list products and offers, including free shipping. Their Quick Promotion tool showed 23% traffic increase for retailers running Free Shipping promotions.

A ShopRunner/Harris Interactive study of over 2,800 online consumers provides the following results from offering free return shipping:

• 81% of shoppers are less likely to make additional purchases on websites that charge for return shipping

• Consumers who paid for return shipping at a given retailer decreased their purchases 75% to 100% within a two-year period.

Takeaways:

Evaluate Costs Involved in Offering Free Shipping: The question for your business is whether or not shipping costs can be factored into your margins, or if it means raising the price. Free shipping does not always have to mean a reduction in your bottom line. Consider these 10 Ways to Offer Free Shipping.

• Test Different Offers: A/B testing of different offers will provide insight into how your customers react to different models. Also compare sales and returns over time to see how the conversion rate and the bottom line are affected. A ProImpact7.com survey shows that 72% of website shoppers abandon the checkout process because shipping rate was higher than expected. The word expected is key. In many cases offering a flat rate or lower shipping might achieve the increased conversion rate you are looking for without decreasing your profit margin.

• Consider the Increased Lifetime Value of Satisfied Customers: Increased customer satisfaction often leads to repeat customers, so the lifetime value of your customer can be another factor in the equation for free shipping and returns. BusinessNewsDaily reports that companies who offer free shipping on returns can see between a 58% to 357% increase in sales in the next two years.