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Are 7 interactions optimal for driving maximum basket revenue for retailers?

By / / In Insight /
Yes, it’s a fact. A new study shows that there are seven interactions required to produce the healthiest online sale. So what does that ideal customer journey look like and how can brands engage new customers during the purchase consideration cycle? Mark Kuhillow did the research and has some answers.
ideal customer journey, maximum basket revenue Marketing strategy article

Online shopping journeys with seven interactions produce the healthiest sale and the maximum basket revenue, according to new research we (R.O.EYE) recently carried out, which looked at the value of the purchase consideration cycle to determine the ideal customer journey.

110,099 individual sales worth £9.2 million were analysed over a period of 11 months across multiple UK retailers and financial services brands, tracking shopping journeys from first measurable awareness to last click.

The data found that seven interactions encompassing eight different channels – Google Adwords, organic search, affiliates, display ads, blogs and forums, email campaigns, Facebook and direct to site – produced an average order value of £132, compared with one (£69) three (£92) and 11 (£129).

On average, consumers made three interactions when purchasing online.

 

ideal customer journey

 

When looking at all interactions and resulting sales, the highest number of transactions – 51,081 – were from shoppers who interacted only once, going direct to their chosen retailer’s website via a search engine. However, average order value was worth nearly half that of shoppers who interacted the maximum 11 times before purchasing. 11 interactions across all channels saw 86% higher average order values.

Overall, we saw sales that had more than one interaction yielded 25% higher average order values.

ideal customer journey, maximum basket revenue

For a consumer looking to buy a camera, the landing page for specialist Jessops offers the start of a different customer journey to that of retail giant Tesco.

ideal customer journey, maximum basket revenue

Seven interactions may well represent the optimal user journey in terms of basket revenue. However, research and conversion dynamics from the consumers’ perspective will vary for every retailer they visit. If we were to use a real-world example, purchasing a camera from Tesco versus Jessops would be an incredibly different experience.

What type of camera is needed, and can the retailer assume a certain level of customer knowledge? How about technical specifications – do customers require handholding throughout the purchase process and post-sales support? So many details can make a shopping trip – or turn it into a frustrating process unlikely to be repeated.

Each retailer has the ability to sell the correct product to the relevant consumer in diverse ways. In the same vein, no two online consumer journeys can be directly compared and optimised, unless they are regular repeat purchases, when looking at how retailers can engage with new customers online.

From the retailer’s perspective, while most stores are by definition similar in terms of their content, navigation and conversion point, each store has different brand values, target audiences, consumer propositions and, potentially, products. A good example is two bricks-and-mortar retailers in a shopping centre: each will have window displays and products to assess and try on, while there’ll be signposting within the store and a till point at which to pay.

This means that there is no one-size-fits-all approach for an online engagement path when brands are looking to find new customers online. Every retailer needs to understand the dynamics between how users are initially interacting with their brands, how they then undertake their research and comparison process and ultimately convert. Or not, of course, which can be just as important to understand.

Our study also found that shoppers looking to make major purchases such as furniture spent the longest time online, an average of one hour and three minutes, while those buying insurance took the least, taking 22 minutes.

Purchases relating to hobbies such as photography and cycling involved lengthy online consideration, with shopping journeys taking between 35 and 60 minutes.

Meanwhile, organic search, Google Adwords and direct to site were the most popular channels for researching products. Research also indicates that social media contributes to the success of transactions. When observed on days where Facebook campaigns were running, as sales peaked, the number of transactions involving Facebook also peaked. So here, the value of niche online communities within social networks comes into play.

This level of understanding can only come from analysing all touchpoints within the user journey, overlaying the costs for those respective journeys and building a media planning model which sends users down the most efficient and effective route possible. At scale.

The ideal customer journey to maximum basket revenue

First and last click are the channels most regularly recorded by retailers and acted upon. Google Adwords was the most popular first-click channel of the eight that were measured, whether a shopper performed one or more interactions before making a purchase, accounting for 42% and 45% of transactions respectively.

The top last-click channel was also Google Adwords, which was used across a third of transactions analysed. Affiliates were responsible for completing 22% of sales, while direct to site represented 18% of all final clicks. Organic search (15%) and blogs and forums (8%) took fourth and fifth place.

When interacting with multiple channels, organic search was the second most frequently used entry point (22%), followed by direct to site (15%), affiliates (9%) and blogs and forums (4%).

Findings revealed that affiliate, direct to site and blogs and forums were the most valuable conversion channels away from first or last click. For shopping journeys with four or more interactions, affiliate and direct to site became the most popular ways to re-engage customers in between steps.

While use of channels aside from affiliate and direct declined from step three onwards, blogs and forums remained a steady, if smaller contributor to the sales process, helping encourage shoppers towards the final sale.

 

ideal customer journey, maximum basket revenue

 

So yes, there are some trends that tend to be fairly uniform across most campaigns. When looking across the wider retail industry, conversions initiated via generic paid search will typically see 15% to 20% higher basket values. Conversions that complete through a voucher code will lower basket values, but retailers will see up to 12% higher conversion rates.

Clearly, the art of optimisation lies in insight derived from the optimal journey for each retailer and the media implementation required to reach desired customers.

Read also:

What’s the future of retail – visualisation?

Understanding the customer experience journey internally

Author: Mark Kuhillow
Founder at R.O.EYE | www.the-gma.com

Starting his career in 1994, Mark Kuhillow’s media roots were firmly planted within the offline direct response world before moving online in 1999. Seeing the opportunity to apply a digital direct response agency model to affiliate and performance marketing campaigns, he founded R.O.EYE in 2004. Now a major specialist in its sector, digital marketing agency R.O.EYE counts the likes of HMV, Best Western and Jessops among its clients.

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