digital Customer Journey.pptx

Customer Journey
DHRUV BANSAL
PRODUCT STRATEGY & ONLINE MARKETING

E-commerce Industry in India
▶ 800 mil Internet Users in
India currently
▶ Massive inflow of internet
users from 2016. Why?
▶ Ecommerce Business has
grown from 26k Cr in
2010 to 370kCr in 2020.
Grew 13 times in 10 years
▶ Active E-commerce
Penetration at 77%in
2021
92 126 159 193
251
302
342
422
493
636
749
845
932
1008
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Number of Internet Users (mil)
26 35 47 53 81 108
136
200
243
295
370
450
530
610
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Ecommerce Business In India ('000 Cr)

Advantages to India
▶ Increasing Investment :Start-
ups in India have witnessed
$10bil+inflow of funds in just
Q3 of 2021
▶ Attractive Opportunities :
India’s Start up ecosystem is
growing thanks to better FDI
policies & Govt initiatives like
Start-up India & Digital India
▶ Growing Demand :Increased
Internet Penetration has led
to high DAUs& MAUs. T
op 10
sitesin India enjoy more than
7 mil DAUseach

T
raditional BusinessModelsfor E-commerce
• B2C : Business to Consumer :this is where the end consumer makes the purchase
directly. E.g. :Flipkart, etc.
• B2B : Business to Business :A Business selling it’s products/ Services to another
business; E.g.: Amazon Business
• C2B :Consumer to Business :Allows users to sell their products/ services to businesses.
E.g.: Cars24
• C2C :Consumer to Consumer: Where a customer sells their products/ Services to
another customer. E.g.: Ebay, Quikr
Ecommerce BusinessModels

Guess the Traditional Business
Model?
B2B

Model?
B2C

Model?
C2C

Model?
C2B

Ecommerce Business Models basis on Inventory
Management
Further Classification in Five Categories :
• D2C : Direct to Consumer : Cutting the middlemen thereby reaching their end-
customers directly :Lenskart.com/ Lenovo.com
• White Label or Private Label : Buying from a distributor and putting your brand :
Patanjali
• Wholesaling : Where bulk purchasing is offered to end customers thereby providing
discounts :Flipkart Wholesale
• Dropship: Sometimes some companies sell products fulfilled by third party supplier :
Indiamart
• Subscription Service: Netflix being the main example on how Subscription models
work

Product
▶ A categoíy’s peífoímance staíts with the stíategic píocuíement of goods. Of couíse,
categoíy managers need to bíing in píoducts to stock shelves, but detailed analysis
and píoduct data aíe all paít of a healthy categoíy management píocess. It's all about
bíinging in the íight píoducts, at the íight píice, at the íight time. Categoíy manageís
use píevious sales íepoíts, consumeí tíends, and seasonal foíecasting to infoím theií
buying decisions.
▶ Let’s dive into an example. If a categoíy manageí foí a clothing íetaileí is looking to
bíing in affoídable bottoms ahead of the next season, theíe may be a gíeat paií of
wool tíouseís that have histoíically sold well fíom one of theií supplieís. Maíket
feedback suggests that demand foí these tíouseís is high among woíking adults
between the ages of 30-45. ľhe supplieí is offeíing them at a gíeat wholesale píice, so
eveíything points towaíd a win foí the categoíy manageí. ľhe only tíouble is Spíing
and Summeí aíe ahead and píocuíement is focused on outfitting the stoíe foí those
seasons. ľhough the wool tíouseís aíe ideal foí business people in Fall/Winteí, they
aíe not a good fit foí the waímeí seasons.
▶ ľhis undeíscoíes the impoítance of the categoíy management píocess needing all
financial and consumeí tíend data points to line up with seasonal buying. Categoíy
management is a dynamic, timely píocess that demands caíeful planning foí the best
píoduct assoítments.

Pricing
▶ When category managers buy products, they leverage wholesale
quantities to drive down pricing. They also purchase for the category as a
whole to get better per-unit pricing
▶ Category managers also need to shop around from different suppliers to
compare products and prices for their categories. There are 2 price points
to consider here: wholesale pricing and retail pricing. Wholesale price is
the business-to-business (B2B) price of the products. Then, there’s the retail
price which represents the price tag for the shopper, or business-to-
consumer (B2C). Retail price is informed by the purchase price and all
other costs (shipping + logistics), or "landed cost," along with the target
margin for the retailer. Products come with a manufacturer’s suggested
retail price (MSRP), which is another data point that helps a retailer set
prices. At the end of the day, to stay competitive, retailers have to
consider their margin compared to competitor pricing for similar products.

Placement
▶ Category managers have to collaborate with merchandising teams to figure
out the best way to organize their assortments into cohesive categories within
the store.
▶ Not only does a good category manager keeps track of these assortments,
but it also considers strategic placement of complementary products for
logical continuity within the aisle. This is intended to bolster sales. For example,
the baking aisle at the grocery store will group flour, powdered sugar, cake
mixes, oils, baking soda/powder all in the same general area. This is to help
with the customer experience as well as to boost sales. With all ingredients
that are commonly used for baked goods in one place, customers are more
likely to remember all the items they need and possibly stock up on even
more than they need.
▶ Retailers often place new items and specialty items on end caps and other
visible displays as well. A healthy category management process connects
assortment planning with merchandising teams to maintain and update the
best planograms for business.

Promotion
▶ Promotions are marketing tactics used to drive sales. Before
products hit the website and after they have been on sale,
CMs must engage in promotional activities to accelerate
sales. Most promotions appeal to logic and urgency for the
customer that ignites a need to purchase the product.
▶ Many factors go into sales promotions, including inventory,
seasonal relevance, sales performance, and competitor
promotions. The category management team must forecast
the performance of their category, identify opportunities for
promotions, and adjust the plan accordingly based on
product performance.

Category Management
▶ Category Management is a strategic approach to procurement where
organizations segment their spend into areas which contain similar or
related products enabling focus opportunities for consolidation and
efficiency.
▶ Category Management may involve the splitting of direct and indirect
products or services or may relate to the dissecting of products or services
by value, supplier, type or volume. Associated theories that can be used
to help the dissecting of products or services isPareto (80/20 rule). From
this, it is possible to see where high levels of spend are being accrued and
where focus should be placed.

Benefits of Category Management
- I
• Category Management enables procurement professionals to focus their
time and conduct market analysis to fully leverage their negotiations and
correctly manage their suppliers in alignment with the corporate
objectives.
• Category Management helps to organize the procurement team
resources and contributes towards economies of scale and enhanced
supplier relationships whilst gaining an in depth understanding of how
each category contributes to risk management.
• These days, Category Management also enables the Sell-out side wherein,
pricing, promotion, & placement also needs to be looked into. It helps the
Category Manager be aware of both sides of the business, thereby
improving efficiency & revenue.

- I
I
▶ Improved performance of vendors:- An operative and effective
category management plan can aid your big or small business to work
with vendors in a more effective style and can secure the time between
the start and end of the process. Category management, if done
tactically, can aid a new vendor or contract enjoy better business
thereby improving their longevity with the business
▶ Better client satisfaction:- Category management is the single
responsibility of a category manager who looks after all the elements
related to a given sourcing requirements & pricing. This keeps the end
customer happy, who would purchase from your online store because
good category management will result in better quality product at
better prices

▶ Improved relationships with diverse suppliers:- Management of category
offers an opportunity to create contacts with multiple vendors. In search of
prices, products, better rated vendors etc., you keep them engaged and this
constant engagement keeps the vendors motivated. Ofcourse, the vendors’
whose quality doesn’t match with the expectation should be given proper
feedback to improve because this feedback will support your future demands
if your existing vendors are unable to fulfil your order. Also, a better coached
vendor will always support you.
▶ Better insights into spending and negotiating product price so resources are
met – accurate accounting:- Usually when a category is not maintained by
anyone, there is hardly anyone who can provide vital insights into the
accuracy of price, cost, and spending because no one is familiar with the
contracts that are on the way. The full list of vendors is unidentified, and
hence, the complete extent of expenditure is unknown too. Better category
management can facilitate a better understanding of expenditure of
standard cost and actual cost on the existing as well as upcoming contracts.
- I
I

A Successful Category Management
Strategy
▶ Effective Category Management encompasses a multitude of areas
including but not limited to:
• Supplier relationship management
• Supplier evaluation and appraisal
• Effective communication incorporating soft skills
• Market analysis, competitive forces and external factors
• Pricing with strong control on both Top Line & Bottom-Line numbers
• Portfolio Placement ensuring tactical & strategic sell out
• Stakeholder identification and management
• Sustainable/ethical procurement
• T
eam leadership and management

So, Let’s sum it up:
What is a category manager?
▶ A category manager specializes in the handling of good or services
for a specific category e.g. services, logistics, transport, security, and is
responsible for planning, sourcing, pricing & overall revenue of a
particular category. It is a very specialized role which requires
individual to build technical skills in the category being handled.

Challenges to Adoption
▶ A category manager acting as a catalyst will confront friction when trying to
implement a category management program across the organization.
Individual business units can be skeptical that the priority will be on cost
control over quality, they can be resistant to change in general or they are
worried about the impacts the changes may have on their current suppliers
by rocking the boat.
▶ To change the tide from skeptics to adopters, the organization must use
methods that address concerns from business units and stakeholders. The
category manager can alleviate concerns through open communication,
creating a clearly defined value proposition and connecting with (and
listening to) stakeholders across the organization.
▶ Adopting a category management approach to sourcing will have
improved contract outcomes as the process is managed end-to-end.
Analytical tools that provide greater clarity and visibility into spend
categories will need to be acquired, as will the talent to utilize the analytics
tools. As the category manager globalizes spend categories, it provides an
opportunity to collaborate with suppliers to be more agile, innovative and
responsive to the business's goals.

The Category Management
Process
▶ There are many ways to develop a category strategy, but here are
some questions and pointsto consider.
• Definition: What should the different categories and sub-categories be?
• Spend analysis: How much spending is going to each category and its sub-
categories?
• Market analysis: How does the supply market look for each category, does it
fit the customer needs?
• Improvement: The market intelligence gained from the market analysis is
applied. This may lead to a change in specifications, and also can change
the scope of work or finding a new supply base and new vendors.
• Continuous application: This knowledge is continuously applied in strategic
sourcing and transactional purchasing.

Category Tree
categories that make
easier for the user
▶ We can see menus, i.e.
it
to
navigate the site on
practically every web page.
▶ However, not only users use
the category structure, but
also search engine bots.
Building a valuable category
tree that is user-friendly and
search engine friendly
requires appropriate
preparation and planning.
We should start with that
before we start working on
our webpage. As a result, we
will avoid the duplication of
categories or the lack of
legibility of the individual
paths.

Issues with Incorrect Category Tree
▶ Empty Categories: It may turn out that our range of products will not
include products that the competition has. Consequently, it will result in a
category of low quality, both from the point of view of SEO and potential
customers.
▶ Categories Not Matching the Target :This problem may arise when our
range of products is targeted at a different age group or covers a slightly
different range of products. For example, when we have a shop that sells
products divided into kids, adults and seniors categories, while our
products cannot be identified by these features. In this situation, we will
not be able to reasonably divide the product range into the relevant
categories.
▶ Categories with Too Much Depth: This can be the case when we use a
very extensive category and subcategory tree, but our product range is
much smaller or less diversified. This will result in an artificial break-up of
products into categories, products that could successfully be included in
one broader but a better-suited category.

Issues with Incorrect Category Tree
▶ Mismatching the Menu to the Size of the Product Range: This quite
extreme case may occur when influenced by categories in
another shop, which may not entirely coincide with our business.
For example, if we are inspired by categories from a large sales
platform gathering different manufacturers and different sellers,
and our shop will offer only one manufacturer’s products.
▶ Mismatching the Category Tree to the Industry : This is another
extremity, but it may appear when we are inspired only by the
appearance of the menu and browse the products briefly. For
example, we are inspired by the category tree of a branded shop
with elegant shoes, clothing, and accessories with extensive
subcategories that take the type of material into account. While
our shop offers elegant accessories made of leather only, so the
division into materials will not be of any use to us at all.

Scheme for a Category Tree
▶ The First Level of a Category Tree
▶ The first level of the category, i.e. the one visible at first glance of the menu,
is for the most important and popular categories. If you have a very diverse
product range, you can place a gender, age or other general
characteristics at this level. In the case of clothing shops, they will be divided
by gender – KIDS, MEN, WOMEN, and then by type of clothing – skirts,
dresses, pants, shirts, sweaters, etc. When it comes to e-commerce with
interior furnishings, we can divide them according to the type of room,
i.e. bathroom, kitchen, bedroom, living room, etc.
▶ The Second Level of a Category Tree
▶ The second level is reserved for the further subdivision of the general
category. It may be of interest to a specific target group. Further subdivision,
i.e. level 3 and below, is recommended only if the product range is large
enough to be beneficial for a sales conversion. This may make sense in the
case of e-commerce with a very diverse product range, where, for
example, we start with the division of WOMEN’S – MEN’S – KIDS’ and then go
on to the selection of the type of garments – SHOES – BAGS – ACCESSORIES –
CARE –ADDITIVES,and then on to individual types of shoes, purses, etc.

Example:
https://www.flipkart.com/
https://headsupfortails.com/
Many companies have restricted themselves to 1 main category and 1 sub-category and
movesevery other narrowing down to FILTERS.

Competitive Research before
starting a Category
▶ Identify your competition
▶ Who are your competitors? And how should you categorize them? You can probably answer that first question
off the top of your head, but you shouldn’t limit yourself to studying only the most obvious competition.
▶ Begin with a list of ten competitors and sort them into three categories: primary, secondary, and tertiary.
▶ The primary category is for your direct competitors—companies that provide essentially the same
product or service as you.
▶ Secondary competitors are similar
, but not quite the same. Companies that sell a version of your product
with different features, or market to different demographics, would be your secondary competitors.
▶ The tertiary category includes companies that sell something fundamentally different that could be an
alternative purchase to what you’re offering.
▶ Analyze their content:
▶ Once you’ve identified the players, you can start reviewing and analyzing the content they’re putting out.
Look closely at:
▶ Theiradvertising
▶ The imagery they use
▶ Their website and everything they publish on it (blogs, whitepapers, ebooks, testimonials, newsletters, etc.)
▶ Multimedia content like videos, webinars, and podcasts
▶ One way to do this is by using software tools to find and scrape the content. Don’t be afraid to engage in
manual research when necessary. Pretend you’re a customer, embark on the purchasing journey, and see
what content your competitors set out for you. See what themes, messaging styles, and branding choices
stand out the most.

starting a Category
▶ Monitor their social media
▶ One of the best sources of competitor intelligence is social media. Now more than ever, buyers are turning to social
media for unfiltered information and real talk about their potential purchasing decisions. B2C and B2Bbusinesses
alike are rushing to meet that demand with a compelling social media presence, a consistent voice, and tons of
content.
▶ Social media is where you’ll often get the strongest feel for a company’s brand persona. It’s an easy place
to discover their newest marketing strategies and see how they engage with their audience.
▶ Because social media is such a vast space, social media listening tools can come in very handy here. They can
ensure you’re watching the right hashtags, keywords, and relevant conversations that might be happening.
▶ Analyze their marketing strategy and offers
▶ Once you’re watching and listening in all the right places, you’ll be able to perceive the bigger picture of your
competitors’ marketing strategy.
▶ What you want to know is:
▶ Where are they focusing their marketing efforts?
▶ Where are they purchasing ads?
▶ What incentives are they offering to draw buyers further into their sales funnel?
▶ Look closely at the CTAs in their content. Check out their opt-ins to see where and how they ask prospects to
engage for further information. Join their email list to see first-hand how their email marketing isstructured and
sequenced. Find out what special offers or giveaways they might be promoting. With this information, you can piece
together their tactics for lead conversion.

starting a Category
▶ Evaluate their offers and pricing
▶ You don’t just analyze your competition so you can copy what they’re doing. Sometimes you get to see
what isn’t working, so you don’t want to copy that. It’s also essential to consider that a good strategy for a
competitor may not be suitable for your company. This is especially true when you’re looking at secondary
or tertiary competitors.
▶ However, knowing what your competitors are charging for comparable products or services is important
when setting your prices. You can’t expect to win the fight for customers if you’re overcharging. Conversely,
significantly undercutting competitor prices can suggest lower quality or minimal customer support.
▶ You can also learn a lot about customer expectations by studying typical promotional offers for the type of
goods you sell. This information can help you determine whether it makes sense to offer customer
enticements such as free trials, discounts, or subscriptions.
▶ Determine their positioning
▶ Companies with a strong marketing and communications strategy know it is crucial to create a unique
position for themselves in the marketplace. They do this by finding ways to differentiate themselves from their
competition. When analyzing your competitors, look for the themes and ideas in their messaging that
function as differentiators.
▶ For example, imagine three pizza parlors on the same block. One offers the largest slices; one offers the
fastest delivery; and the third promises the healthiest ingredients. They’re all in competition, but they position
themselves very differently. To find your own unique selling proposition, you have to know how the
competition is positioned.

Customer
Journey
▶ A customergoes through on
an average 5 touchpoints
before making a purchase
▶ Some customersneed as
much as 20 touchpoints
▶ With each failed interaction,
the probability of the
customer bouncing off to
competitive website
increases

Stages of
Customer
Journey
▶ Awareness:
▶ This is the moment when
the customer first discovers
you and your products.
Usually upon the first click
through to your site, they’re
beginning to get a sense
for who you are and what
you have to offer.
▶ The customer can directly
land on your homepage
(organically or through
paid search) or directly to
your product

Stages of
Customer
Journey
▶ Consideration:
▶ During this step, the customer is
looking through your products & is
starting to decide whether they will
buy your product
▶ This is typically one of the longer
steps in the customer journey, as this
is where all of those touchpoints
happen.
▶ The consideration phase is when
you’ll start to see some customers
make the shift between low intent to
high intent. Low intent customers are
window shopping, but they may not
make a purchase at all.

Stages of
Customer
Journey
▶ Acquisition:
▶ This is the conversion we’ve
been hoping for! The customer
has made their decision and
has decided to checkout
▶ From here, there are some
other phases or steps towards
reconversion, but right now we
must focus on what we can
track and measure for the first
conversion!

Key KPIs to track
• Visits: how many people came to your site from thischannel
• Pageviews/Visit: how many pages your customer viewed while on your
site
• Average Visit Length: how long a customer spent on your site
• Bounce Rate: how many visitors left your site without navigating past the
landing page
• Failed Discovery/Browse Abandonment Rate: how many visitors
navigating through your site exited before adding anything to the cart
• Cart Abandonment Rate: how many customers added products to their
carts but didn’t complete the purchase
• Conversion Rate: how many customers made it to the acquisition phase

Example of a Typical Customer
Funnel

Funnel
Analysis
▶ If1000 visitors enter the site-
▶ -> 443 of those visitors will view
an item
▶ -> 17.9% of those 443 people
(79) will then add an item to
theircart.
▶ ->Of the 79 who added to their
cart, 59.2% will make a
purchase (46)
▶ For every 1,000 people landing
on the homepage, roughly 46
of them will make a purchase,
making it a 4.6% website
conversion rate.
Example 1

Deeper
Analysis
▶ Nearly 90%of those that added an
item to their cart visited the cart
afterward, so that step seems okay.
It also seems that once someone
has entered their personal details,
there’s a strong likelihood of them
making it all the way to a purchase
(represented on this graph as the
Thank You page).
▶ But. There is a surprising drop-off
between the steps of visiting the
cart and entering personal
details. Nearly 30% of the people
that make it all the way to viewing
their cart are then leaving!
Example 2

General Steps to Optimizing Your
Conversion Funnel
1. Run a funnel analysis
2. Pick the main area most in need of improvement (homepage, view
product, add to cart, etc)
3. Run a deeperfunnel analysis on that main area
4. Pick the step of that main area most in need of improvement
5. Make a hypothesisabout that step
6. T
ry to disprove your hypothesis with A/B tests
7. Repeat
Let’s check a website now!

“Companies today differentiate
their web experience basis New
Customersas well as Repeat
Customers”

New Customer Acquisition
▶ “Customer acquisition is the process of bringing new
customers or clients to your business. The goal of this
process is to create a systematic, sustainable
acquisition strategy that can evolve with new trends
and changes.”
Hubspot

What is New Customer Acquisition?
▶ Customer acquisition is the process of gaining new customers.
▶ Customer acquisition, or client acquisition, is a crucial initiative
because without new customers there is no business
▶ Brands use customer acquisition to understand the value of each
paying customer by measuring the money a company spends to
bring in a new client.
▶ The lower the marketing spend needed to acquire a new
customer, the higher the profit. Companies look at this metric to
inform their marketing strategies and improve margins.

New Customer Acquisition Process:
▶ 1. Identify the Audience
▶ First, you need to identify your target audience. Ifyou’re targeting multiple
audiences, it might be best to design a different sales acquisition strategy for
each group.
▶ Moreover
, the most successful customer acquisition campaigns have
personalized elements catered to the individual's interest, needs or behavior.
▶ 2. Define your Strategy & Design a Plan
▶ Once you identify and understand your targeted audience, you need
to leverage data findings and industry best practices to develop program launch
and communication plan.
▶ The stage of the customer journey your audience may find themselves in, is also
important to note at this stage
▶ To optimize new customer acquisition, your plan should include:
• A cross-channel activation strategy with connected communications across
email, display, search, social, mobile and direct mail
• A testing and measurement plan that defines KPIssuch as: impressions, click
through rate, new customer acquisition, cost per acquisition (CPA), return on
investment (ROI) and return on ad spend (ROAS)

▶ 3. Launch
▶Once the audience has been identified, the channels have been
chosen, and the KPIsare all set, it is time to launch your campaigns.
During this part of the process, your company needs to monitor all pre-
set KPIs and begin collecting data.
▶ 4. Measurement & Optimization
▶ T
he end goal isto eliminate campaignsthat do not bring in the best
results, boost those campaigns that work well, and eliminate any issues
identified through the monitoring process.
For example, if a you find website traffic is high, but conversion is low, focus on
the landing page and experiment with the content or CTAs.
New Customer Acquisition Process:

Customer acquisition strategies
• Using video content to increase engagement.
• Do giveaways to increase organic awareness.
• Leverage content marketing to improve SEO and keep prospects engaged.
• Use consistent branding and clear communication to increase trust and authority.
• Run referral programs.
• Implement a reward program to increase client retention.
• Create an affiliate program.
• Build partnerships and utilize their leads to promote your product/service.
• Use landing pages when launching new products to highlight them and help
customers focus on the new solutions the company is bringing to the market.
• Implement newsletters to collect leads and subscribers to minimize marketing costs.
• Publish content on external websites.
• Leverage influencers that reach your target audience and align to your brand voice.
• Ensure paid search campaigns are optimized based on product, audience and
geographic location

Customer acquisition cost
▶ The cost of customer acquisition, also known as CAC, is calculated by taking the
amount spent on acquiring customers and dividing it by the number of clients
earned. For example, if a social media campaign has a budget of Rs. 10,000,
and it resulted in 100 conversions, then the CAC ismeasured at Rs.100per
conversion.
▶ CAC =(MC +W+S +OS +OH) / CA
• MC =marketing costs
• W =wages formarketing/sales personnel
• S=marketing/sales software
• OS =outsourced services
• OH =sales/marketing overhead
• CA =number of customers acquired
▶ There isno set CAC that isconsidered ideal across all industries. However, a
good baseline can be measured by calculating the CAC compared to the
customer lifetime value (LTV). The general idea isthat LTV to CAC ratio at 3:1to
5:1. For example, if the lifetime value of a customer is Rs. 5000, then a good CAC
is Rs.1000. The lower the CAC, the higher the profit margins.

Repeat Customers
“Repeat customers are 9 times more likely to convert than a first-
time shopper
.
”
Adobe Digital Index

Reasons why a Repeat Customeris
important (read :profitable)
1. A repeat customer is more likely to shop with you again and again
▶ After one purchase, a customer has a 27% chance of returning to your store. While that’s not a horrible return rate, if you
can get that customer to come back and make a second and third purchase, they have a 54% chance of making another
purchase.
▶ As much as it sounds obvious, it is due to key skills that you will have to adopt and not just “DISCOUNTS’

▶ Customers who receive a
discount either start to expect a
discount every time or wait until
a discount exists to make
another purchase. Instead, it is
recommended to use
sustainable retention toolsto
encourage customers to come
back to your site.

2. A repeat customer is easier to sell to
▶ While conversion rates in ecommerce are volatile and vary by
industry, most experts estimate that the average conversion rate is
somewhere between 1%and 3%.
“A repeat customer has a 60 to 70%chance of converting.” –Paul Farris –Head of
BusinessStrategy @Uber

3. Repeat customers spend more on each purchase
▶ 1st Factor :The numberof previouspurchases :your loyal top 10%
spend 3 times more per order than the lower 90%,and your top 1%of
customers spend 5 times more than the lower 99%.
▶ 2nd Factor :For How Long has the customer been shopping with you :
A study by Bain & Company found that apparel shopperspurchase
67%more per order after shopping with a company for 30 months.

4. Repeat customers spend more at key times
▶ According to Adobe, the average shopper spends 17%more per transaction during
the holiday rush. While this is great news, your store’s repeat customers spend 25%
more per transaction during the busy season.
5. Repeat customers share your store more : “Customers refer more people to a
brand when they have made more purchases with that store.”

CustomerRetention Tools
▶ A CRM is a system that can help you manage all your customer relationships.
▶ A customer loyalty program isan easy way to boost customer retention. When a
customer isgiven additional value for doing business with you — by way of a points
system or a VIP rewards program, for example — it becomes more difficult for them to
choose a competitor over you.
▶ A customer referral program offers 2 benefits :one, it encourages new leads, second,
it rewards your existing customers
▶ With gamification, you can encourage users and customers to complete preferred
actions (e.g., convert, make another purchase, refer their friends, sign up for your
email newsletter, follow you on social media, etc.) by making it more enjoyable for
them to do so.
▶ Personalization allows you to increase customer retention through relevant and
customized experienceswith yourbrand.
▶ Customer service and support makes the process of providing memorable and
delightful experienceseasier.
▶ A customer feedback tool is more than just a way to survey your customers. It’s an
opportunity to start a conversation with people who have a strong opinion of your
business.

Marketing Automation to engage
with your customers

Benefits of Marketing Automation
on Customer Journey
▶ Nurture Leads :You don’t have to keep tabs on potential customers.
Let automation do it for you while you concentrate on other
aspectsof your business.
▶ Personalize Customer Service :Automated marketing helps you
reach the right customer with the right content at the right time
▶ Improve Relationships :An essential benefit of marketing
automation is that it enables you to reach more potential customers
across multiple channels. With little effort on your part, you can
spread brand awareness and spark interest in your business.
▶ Connect Across Multiple Channels :Reliable automation
software allows you to keep track of how various channels are
performing. You can see which customers you’re reaching and
what marketing strategiesare working.

▶ Understand your customer : Knowing how potential customers are
interacting with your brand is valuable information. Understanding
who is visiting your website, reading your emails, and viewing your
content provides great insight into the minds of your customers.
▶ Use Data for Better Decision-Making : Another major benefit of
automated marketing is that it allows you to collect important data
and put it to work for your business. This helps you better understand
and predict customerbehavior
▶ Streamline the Buyer’s Journey: Customers want a simple buying
process and a seamless experience. Marketing automation helps
enhance the buyer’s journey with personalized ads, faster
feedback,and focused attention on customers’ needs.
Benefits of Marketing Automation
on Customer Journey

Deal of the Day/ Flash SALES!
▶ Benefits:
▶ 1. Ensure lead conversion : Hosting flash sales on your brand’s site is a perfect
way to obtain new clients. Frequently, prospects browse sites to find interesting
offers before the holidays. They may add some products to their carts but leave
them unless there is an actual need for these items. Limited offers encourage
shoppersto make quick purchase decisions.
▶ 2. Improve brand visibility. The urgency that converts your visitors into buyers
works on social media as well. People who discover an attractive offer from your
brand and consequently become your customers are keen to share it with their
friends and colleagues. Some of them may even share news about your offer on
their social media accounts.
▶ 3. Increase the number of loyal customers. A big discount on various items is a
great way to reward your existing clients, enabling them to buy your brand’s
products at a lower cost. After trying your products and discovering that they
are high-quality, consumers are more likely to buy from you

▶ 4. Market items that are not in demand. You can sell the products
that are not popular among customers quickly and give room to
new items. You can sell off seasonal or specialty products and
recuperate some of your initial costs.
▶ 5. Boost revenue. Deals of the day bring an average of a 35%
growth in transaction rates. The short-time sales make shoppers buy
fast and place larger orders than normal. This boosts sales quickly in
no time. As a result, your revenue grows. So, if you aim to boost
revenue quickly, deals of the day have come to the rescue.
Deal of the Day/ Flash SALES!

When should you run a flash sale/
Deal of the Day?
▶ The shorter a flash sale, the better the results will be for your brand. It
is a known fact that a sense of urgency and a big discount make
buyers decide quickly.
▶ 50%of purchases take place during the first hour;
in the
▶ to receive higher revenue, brands send email campaigns
evening;
▶ two-hour salesdemonstrate higher click-to-open rates.

How to run a successful flash sale
▶ 1. Define your goal
▶ Determine the goal of your flash sale as it helps measure your success.
Decide what you want to achieve: decreasing the number of poor-selling
products, driving traffic to your site by providing a good discount on the best
selling product, or stabilizing your inventory. After determining your goal, you
will know for sure which products to choose for your deal of the day.
▶ 2. Select the right products or services
▶ Ensure that the products you select align with your target audience. This step
is very important to get long-term buyers. It is a good idea to provide a
discount on the products customers are interested in. As a result, the right
people will click on your brand’s website. For your sale, you can choose non-
seasonal items, poor-selling items, or simply try to liquidate your excess
inventory. If you aim at boosting sales, you can sell products that are in
demand among your buyers

▶ 3. Promote your sale
▶Maximize your efforts to promote your short-time sale and make an
announcement the day before it starts. You can engage a bigger
audience by promoting your flash sales on various channels like social
media, email newsletters, and web push notifications.
▶ 4. Limit the time of the deal
▶ An ideal deal of the day shouldn’t exceed 24 hours. Statistics show that
three-hour sales have the highest transaction rates at 14%.We’ve
already mentioned that a flash sale works because of its urgency and a
rush that appears among buyers. This“rush” provokes people to make
impulse purchases.

▶ 5. Check your stock
▶ Ensure that you have enough of the products in stock that you plan to
offer. Calculate approximately how many products you will need. This is
necessary to make sure that you won’t sell out the discounted products
too fast leaving customers with negative impressions about your
company.
▶ 6. Get ready for delivery
▶ In today’s world, it is critical to deliver products as soon as possible.
People expect to receive their orders the next or even the same day.
That’s why you need to be ready for mass shipping to provide an
excellent customer experience with your brand from start to finish.

DIFFERENT
DEVICES
– MOBILE
vs
DESKTOP
▶ Users behave in a different way:
▶ 80%of activity happens on the
mobile, whereas 20%or less is
done on the desktop
▶ Pre-purchase isusually done on
the mobile, whereas most of the
purchases are done on the
desktop/ tablet
▶ An app’s rating has a strong
influence on a user’s decision to
download. Most websites don’t
face this kind of upfront scrutiny
the way apps do. On the other
hand, a great rating can go a
long way in driving app installs.
▶ An Omni-channel presence
becomes important

Different Customer Funnel
▶ Due to the different format and user behavior of
websites versus apps, their marketing funnels are also
quite different.
▶ As mentioned earlier, an app user must convert (install
the app) before they start engaging with it. The
acquisition of the app occurs at the early stage of the
funnel, whereas for a website, the conversion (whether it
be a purchase, demo request, or any other action) is
often the last stage.

Web marketing funnel App marketing funnel
Both funnels begin with awareness, however, the app funnel moves right into acquisition
and retention, while the web funnel takes it more slowly, nurturing the visitor towards the
conversion. Inother words, the app marketing funnel moves faster and requires a more
action-oriented, aggressive approach.

The KPIs are different
▶ The funnels, marketing strategies, and user behavior is different
▶ When analyzing your website performance, you need to consider metrics like page
views, bounce rate, average time on page, conversion rate, and page load times. There are
many more, and the KPIs you set will depend on what you want to achieve with your site.
▶ App marketing KPIsinclude install rate, retention rate, churn rate, which measures how many
users stop using your app within a certain time frame, DAU and MAU (daily and monthly active
users), and others.
▶ Conversion rate is a broad KPI that can be applied to an app as well as a website. Even so,
your web and app analytics operate in different spheres and will need to be tackled
separately.
▶ Due to the inherent differences in the way they operate, websites and apps require different
tracking tools.
▶ For website tracking, tools such as Google Analytics, Hotjar, and SEMrush are popular.
▶ For App Analytics, you’ll need to choose from an entirely different list,which includes the likes of
Google Analytics for Mobile, Appsee, Appsflyer, and Apple Analytics (for iOS only, of course).
▶ To properly measure the performance of your website and app, you must set separate KPIs for
each. Ifyou plan on using a tracking tool, you will need to choose separate products
specifically designed for website analysis or app tracking.

Ina Nutshell
▶ Website/ Mobile Website :
▶ Strengths : Easily Accessible and Inexpensive
▶ Weaknesses: Conversion and UserExperience
▶ Strategy:
Use Mobile Sites to Attract New Customers
Everybody can access your mobile website, making it perfect for
attracting new customersand being found on the web.
▶ Mobile App:
▶ Strengths: Repeat Purchases, Conversion, and User Experience
▶ Weaknesses: Downloads and Choosing the Right Platform
▶ Strategy: Use Apps to Turn First-Customers into Lifelong Customers

Myntra’s –App Only Strategy
▶ Background:

Big coverage and PR around the
App-Only Strategy
▶ https://economictimes.indiatimes.com/small-biz/startups/e-
commerce-brands-trying-to-cut-losses-by-becoming-app-only-
platforms-what-are-the-pros-cons/articleshow/47483745.cms
▶ Key Pointer:
▶ You can’t dictate User Behavior

Why Myntra came back to Web
▶ There are still people who shop only on a PC:
▶ Many studies, including the ones done by Myntra before shutting down its web
presence in May 2015, showed that people spend more on mobile when
compared to shopping online. The only explanation for the shift is that the
fashion portal sees significant number of shoppers during office hours —
evident in workers getting delivery of goods in most office complexes across
large metros. The expected sales growth then can be attributed to these
marginalized users who will now come back to shop on Myntra on their office
PCs.
▶ The smartphone isn’t yet the ideal shopping device
▶ Smartphones may beat desktops on a lot of fronts, but providing the best
shopping experience isn’t one of them. While smartphones make payments
easier, apps are more customized to a user's preferences and notifications
help them discover better deals, the lack of screen real estate and patchy
and slow mobile internet connectivity in India are two huge hindrances.
▶ Myntra, too, said that people like viewing products such as home furnishings
and fine jewelry on larger screens, not to mention fashion products require
more scrutiny before purchase than something like groceries.

▶ The web experience is catching up with native apps
▶ It helps that Google’s browser is the most widely used browser in the world (and
in India). So, any improvements to Chrome can be counted as overall wins to
web browsing.
▶ Registered users vs Transacting users
▶ Flipkart claims it has 75 million registered users on its platform. However, ask any
web expert and they’ll tell you the number of transacting users has barely
crossed the 30 million user mark. Now these 30 million odd transacting users in all
probability belong to the creamy layer in terms of income, that sit right at the
top.
▶ By the power of deduction, it's not hard to assume that while these users do
indeed have smartphones, they also have access to desktops. Now choice
becomes a huge part of a service’s offering to customers and taking it away
isn’t an option. Ask Facebook, out of the 1.65 billion people that access its
service, over a billion of them do so on mobile, however, the company
continues to build out both web and app services, and doesn’t ignore the
former.

▶ Flipkart can’t afford to alienate even a small number of users
▶ Myntra’s owner Flipkart is engaged in a heated battle with rival Amazon
and regardless of who’s in front and who may be closing in, it’s probably
right to assume that every customer Flipkart and Myntra turns down is a
customer of the other two. By alienating users that wanted to shop on
desktops, Flipkart wasn’t just losing users but was fueling the growth of its
rivals. All along, we assumed that number would be quite small, but
Myntra’s claim that bringing back its desktop website can yield an
additional 15-20% in sales this year turns that assumption on its head.

The Buy Side!
▶ What isSupplier Management?
“Supplier Management refers to all the business processes and
activities that deal withthe entire lifecycle of a supplier for an
organization”
▶ Thisincludes, but is not limited to, identification, selection, and
management of relevant suppliers coupled with a practical evaluation of
their performance to ensure they are providing maximum value for the
organization’s third-party requirements.

Why do We need Supplier
Management?
▶ When it comes to establishing why businesses necessitate supplier
management, there are two main pillars we need to recognize:
• To evaluate if the suppliers are performing as per the organizational
requirements
• To identify areas of improvement while engaging with suppliers throughout
their lifecycle
▶ These two factors primarily highlight why we need supplier
management – to ensure we are deriving the maximum value from the
suppliers for the relevant requirement(s), given the resources invested in
the suppliers.
▶ To get the most out of a supplier’s service, it is important to track and
measure their performance. With regular communication and
feedback, an organization develops a transparent relationship with the
supplier, which helps in finding areas of improvements with quick
solutions.

Factors Driving Supplier
Management
• Increasing operational scale that results in increasing need for local as well as global
suppliers
• The increasing complexity of supply chains which also result in a rising depth of the
organization’s supplier base
• Growing risks in a supply chain which can make the organizations more vulnerable to
performance failure if their involved suppliers are not managed and evaluated effectively
• Managing supplier data that allows organizations to streamline crucial supplier data to
provide meaningful insights for improving supplier management
• Establishing long-term supplier relationships that will enable suppliers and organizations to
meaningfully collaborate and create synergies for maximized performance for the long-run
• Leveraging supplier relationships in times of organizations or external distress to ensure
business performance doesn’t fluctuate
• An increasing competition which implies organizations have to identify and improve
aspects of their business processes that can provide them a competitive advantage
• Matching industrial standards of supplier performance so that organizations can achieve
best-in-class performance

Benefits of Supplier Management
▶ Managing a Growing Supplier Base Effectively
▶ Achieving Cost Savingsand Quality Control
▶ I
mproving the Organization’s Supply Transparency
▶ T
racking Compliance to Relevant Parameters
▶ Evaluating Supplier Performance
▶ Building Development Programs to Support Suppliers
▶ Leveraging Supplier Relationship Management
▶ Assessing and Mitigating Supplier Risk
▶ Building a Supplier Management Process

The 5-step Supplier Management
Process
Identifying the set
of business goals
and objectives
Identifying
relevant selection
criteria for
choosing suppliers
Evaluating and
selecting suppliers
Negotiating and
Contracting with
the selected
supplier(s)
Evaluating supplier
performance

▶ SLA Management
▶ Product Reviews& Ratings
▶ Vendor Rating
▶ Returns& Customer Escalations
Evaluation of your Supplier

SLA
Management?
▶ What isSLA :
▶Service Led
Agreement :It’s an
ongoing process of
ensuring all provided
services& processes
are in alignment with
the agreed upon
service level targets
stipulated by the
contract

What do
you include
in an SLA
Metrics
Responsibilities
Expectations
Timing & Frequency

Product Reviews & Ratings
▶ Why Product Reviews are Important in eCommerce?
▶ Product reviews are arguably the most useful way to eliminate
shoppers’ concerns regarding a product. A majority of the people are
influenced by product reviews in theirpurchase.
▶ No matter whether you are a popular brand or just started out, product
reviews do play a crucial role in your eCommerce business as far as
credibility is concerned. Credibility is one of the key elements that
decide the success of your brand in the long run.
▶ Merchants often overlook the importance of product reviews. The major
focus remains on designing the site look and optimizing the checkout
page but nothing really matters if you are not getting good reviews on
your products.
▶ The importance of product reviews can be understood by the fact that
90% of the consumers read online reviews before making a purchase
and 72% of the consumers will be prompted to take an action after
reading positive reviews.

What isProduct Review?
▶ Product reviews are the opinions or feedbacks
of customers for a particular product. Many
online businesses put up a review section on
their website to allow customers to rate and
review the product they purchased.
▶ A product review helps other users get a clear
idea of the product before purchasing it. They
can read the reviews and make their mind clear,
and decide whether the product is worth
purchasing or not.
▶ If you have not added a product review section
on your eCommerce website, only because of
fearing negative reviews, you are losing out on a
huge number of potential customers.

Importance of Product Reviews
▶ Product Reviews build Trust
▶ When a user lands on your website with the intention of making a purchase, the
first thing that they look for is reviews.
▶ Amazon displays average ratings for products based on customers’ feedbacks,
right on the top of the product page, and at the bottom are the customer’s
reviews. Whenever a prospect visits the product page, they are straight away
displayed the product ratings along with the number of people who rated that
product.
▶ Product Reviews provide better insights into the product
▶ Hearing from people’s past purchase experience helps the prospects identify
whether the product has earlier matched customer’s expectations or not.
▶When a customer leaves a review for the product, he is helping others
understand what they can expect from the product, how is it performing, what
are its flaws, what are its pros and much more.

▶ Product Reviews let you rectify the issues with the product
▶ If a majority of customers are pointing out the same problem in the product,
it is for you to take the onus of rectifying the defect so that the issue gets
resolved. Yes, there are possibilities of a damaged or defective item
reaching the customer, but it happens with a few customers only.
▶ If the problem is major, you need to look into it and get it fixed as soon as
possible. Put simply, customer reviews help you find the loopholes in the
product and provide you with an opportunity to improvise on those areas.
▶ Product Reviews work as Social proof
▶ One of the major benefits of product reviews is they can do wonders to your
Brand. You would have often seen brands highlighting what their customers
have to say about their products or services. These are what we call as
testimonials, and they make a significant impact on a prospect’s purchase.
▶ Display testimonials through your social media pages and on the home
page of your website. It is one of the best ways to promote your brand that
can attract a large number of potential customers to your website and also
leave an excellent impression when a visitor lands on your website.

▶ Product Reviews boost Conversions
▶ If you delivering up to your customer’s expectations, product
reviews are going to play a huge role in your conversions. People
would openly do the marketing for you by leaving positive
reviews. And even a single positive review can lead to an
increase in the conversion rate.
▶ Product Reviews reduce possibilities of Returns
▶ If you do not display product reviews, how are online shoppers
going to decide the product quality? They would not be
confident enough to make a purchase. Moreover, they will have
doubtsregarding product quality.

How to get more reviews?
▶ Start by asking your customers directly
▶ The best way to get customers to review items they own or have purchased is to
just ask them. Be direct — it’s not as if your customers don’t want to leave reviews, but
they often don’t remember!
▶ Make the review process a breeze
▶ Don’t send customers to a review form riddled with unnecessary fields. You need a
name, an email address (for contact or verifications purposes only), a rating, and the
review.
▶ Offer an incentive
▶ Incentives are a great way to get people excited about sharing information. This can
range from tacking rewards for reviews onto an existing rewards program, or creating
new incentives for reviewers.
▶ Ask for photos (or to reuse existing photos)
▶ People also love snapping pics of… well, everything! Product reviews accompanied by
pictures and video tell a better story than those that are text-only.
▶ Respond to reviews that need your attention
▶ Apologize for your mistakes, clarify product information, and thank customers for
taking the time to leave feedback. You don’t need to respond to every review, but
definitely take the time to show that you care

Vendor Rating
▶ There are 2 typesof VendorRatings:
▶ Internal VendorRating :Vendorsor suppliersare given standing,
status, or title according to their attainment of some level of
performance, such as delivery, lead time, quality, price, or some
combination of variables.
▶ External VendorRating :The Rating of a Vendoras an outcome
of cumulative rating of their products which the customers have
given. Some e-commerce websitesalso accept direct vendor
ratings. Thisisto ensure that attributes impacting the product
experience are segregated and the necessary departments be
scrutinized.

Internal Vendor Rating
▶ Criteria for Vendor Rating:
▶ Quality :The quality of the products or goods vendor supplies is the
main factor. The vendor can maintain good quality by improving
production, having quality planning in the supply chain. Quality factor
consistsfollowing things:
▶ The vendor’s products or services must meet the specifications
mentioned in the request for proposal and purchase order.
▶ The product failure rate should be within the appropriate limit.
▶ T
he vendor should do proper repairorrework.
▶ He should provide an adequate time duration for replacement.
▶ Price: An ecommerce company always wants to get the
material at less expense to increase its profit. Hence the
vendor needs to set a competitive price for his products. It
includes the following things:
▶ Stable Price
▶ Accurate Price
▶ Prior Notice to Price Change

Internal Vendor Rating
▶ Criteria for Vendor Rating:
▶ Service: Itisone of the crucial criteria for the supplier. He must
provide good service by providing an updated catalogue, pricing
information, technical information along with the following things
• He must have the ability to handle complaintseffectively.
• The vendor should provide technical support for installation, maintenance, and repair.
• Emergency support: He should support in the emergency condition of product failure
or repair.
• Resolve the problems: Supplier should find the solution for the problem on time
▶ Delivery: Supplier has to develop the ability to deliver the goods on
a scheduled date. Thisfactor consists following things.
• Lead time: Lead time isthe time between the actual delivery day and order
placement day. The shortest lead time helps to get a good impression on the supplier.
The vendor should deliver products on or before the promised date.
• Quantity: He must deliver the correct amount of products as mentioned in the
contract.
• Packing and documentation: Packing of the products must be suitable, study, and
undamaged. The vendor should provide proper documents along with the delivered
products.
• Emergency delivery: The vendor must have the ability to deliver products in case of
some emergency requirements.

External Vendor Rating
Following are the external rating criteria for a vendor
▶ Quality Rating :Quality is constituted by Quality Acceptance –both the
hard aspects & the soft aspects of Quality. Thisalso becomes more
critical if the product passes through Quality Certifications
▶ Price Rating : Customers usually compare the price of the product with
products available at different websites/ vendors on the same website.
Price Rating also is in accordance with Quality to Price benchmark.
▶ Delivery Rating :Customers rate the delivery performance of the
vendor by comparing the actual delivery date with the predetermined
delivery date
▶ Service Rating :Rating the service based on the support provided by
the vendor during post and pre-purchase orders and also consider the
warranty period.

Benefits of Vendor Rating
• Vendor rating helps the buyer understand the vendor in every
critical aspect, and it helps to know if the vendor is suitable to deal
with or not. It does not deal with prejudices and word-of-mouth. It is
more dependent on data.
• Ithelps the buyers to strike the right kind of communication required.
• It ensures a consistent standard of vendor performance with
updated reviews of theirperformance.
• It helps the buyer identify areas of weakness in the performance of
the vendorand allows the buyer to take corrective actions.

Disadvantages of Vendor Rating
▶ When you evaluate and rate your vendor, he might feel that you do
not trust him
▶ Itmay impact your relationship with your vendor/supplier. But
practical supplier evaluation helps the supplier to perform well.

Returns
▶ Return rate is an ecommerce metric that refers to the frequency that
customers return their online orders. Ecommerce return rate is an important
metric asit highly impactscustomer satisfaction and revenue.
▶ Net Sales =Gross Sales –Returns
▶ Return Rate Percentage :(Total number of returns/ Total Sale) x 100
▶ Why should businesses calculate return rate?
▶ There are many reasons for businesses to calculate ecommerce return rate,
such as:
▶ Measure customer satisfaction
▶ Identify the reasons that drive returns
▶ Determine order accuracy
▶ Make corrective measures
▶ Minimise ecommerce returns

What are the reasons for the high
ecommerce return rate?
▶ There are many reasons why customers make online returns, such as:
• Damaged product: When the delivered product is damaged, before or during
the shipping process
• Inaccurate description:When the delivered product doesn’t match the
displayed description, either in style or colour
• Incorrect product: When the delivered product is not what the customer
ordered
• Incorrect size: When the delivered product doesn't fit the customer
• Malfunctioning product: When the delivered product doesn’t work properly
• Delayed delivery: When the product arrives too late that the customer doesn't
need it anymore
• Change of mind: When the customers simply change their minds about the
delivered productsor don't like the product
• Returns fraud: When customers purchase a product with an intention to return it

Benefits of lowering the return rate
1.No lost salesor unhappy customers
▶ When your return rates are low, your customers are happy with their orders. They
don’t feel the need to initiate a return. Inextreme cases, when your customers
receive a damaged or incorrect order, they can turn to your competitors and never
come back to you. Thus, if you decrease your return rate, you can enhance
customer experience and retain your revenue.
2.No additional costs associated with returns
▶ Ecommerce returns not only means that you must let go of the revenue gained from
that sale but you have to bear additional costs. These costs include cost of return
shipping, the cost of conducting quality checks, the refurbishment cost, repackaging
and restocking of the product cost. Ifyou reduce your return rate, you don’t have to
incur these additional costs—leaving more untouched revenue for you.
3.Better brand image and customer loyalty
▶ Today’s online shopping experience encourages consumers to share their purchases
and opinions on social media. Ifyour customers are not satisfied with your product or
fulfilment service, they not only make a return—they also post about their negative
experience. Such incidents can quickly apply negative connotations to your brand.
Moreover, a poor shopping experience can discourage a buyer from becoming a
repeat customer. With a low return rate, you can ensure a positive customer
experience, build a creditable brand identity and improve customer lifetime value
(CLTV).

I. Implement a liberal return policy:
▶ More than half of your customers, read your returns policy before placing an
order and 72% of customers say a hassle-free return experience makes them
more likely to shop from an ecommerce brand again. Customers expect at least
30 days to return an online order but only 5% of customers return their orders
after 30 days.
▶ Here's what you need to do:
• Clearly and concisely highlight your returns policy, i.e. display it on your home
page, footer or link it on your product page
• Determine a timeframe for making returns, preferably increase the return time
window
• Build customer trust by ensuring easy returns and multiple refund options like
store credits, the original mode of payment and more
• Clearly display which products can be returned (e.g., all apparel except
undergarments), in which condition (e.g., tags intact), with which required
documents (e.g., invoice), and if there are any exceptions
Strategies to Reduce
Return Rate

Return Rate
II.Focus on improving the product display
▶ The best way to provide clarity to customers
about their purchase is to have multiple high-
resolution photos of the product. These photos
allow customers to zoom in and examine the
various details of a product which sets the right
expectations and reduce the chance of making a
misinformed purchase decision.
• Take and display high-quality images of your
products
• Curate images from all the angles of the product

Return Rate
III.Write detailed product descriptions
▶ Almost all of customers state product
content such as descriptions—as extremely
orvery important when deciding to make a
purchase. If a customer doesn't understand
your product completely, you can set them
up forpotential disappointment.Thus,
product descriptions help customers decide
whether your product isright forthem.
▶ Here's what you can do:
▶ Draft a detailed description including how
the customers willfeel orwhat they will
experience when they willuse your product
▶ Highlight the significant features and
benefitsof your product in bullet points
▶ Include specifics like dimensions of the
product, materialsused, and more

IV. Create dynamic sizing charts:
▶ Sometimes customers may under or
overestimate their size and purchase
the wrong size of a product. To
prevent such returns, create detailed
sizing guides. You can also offer tips
on how to take measurements so
that customers can make an
accurate decision.
• Provide a helpful size chart keeping
all the aspects of your product in
mind
Return Rate

V. Start including product videos
▶ If your customers are sending back
products because they don’t meet the
expectations that were set in the
product images and description, you
can consider including product videos.
• Include a short video giving a 360-
degree view of the product
• Allow your customers to view products
or product colors in natural light or
with a background that denotes where
the product would be used
Return Rate

VI. Offerlive support
▶ Even after providing images, descriptions,
and videos, your customers may have
some confusion about the product. You
can enable your customers to ask you
questions about products in real time. T
his
will not only help boost conversion rates
but also prevent customers from ordering
items that don’t meet their requirements.
For instance, accessories and jewellery
brandscan offer live support to resolve any
quality concerns of the customers.
▶ Here'swhat you can do:
• Provide real-time customer service
• Allow email enquiries about the product
• Offer live chat support via chatbots
Return Rate

VII. Enhance the value of customer reviews
▶ Reviews that give a detailed account of the
product’s quality and usage contribute to
higher sales and lower returns. By encouraging
customer reviews and feedback,you can learn
about quality issues and what information you
should provide in product description.
• Include a review section on your product page
• Add check boxes foroptionsto ensure reviews
aren't time-consuming
• Offer incentives to customers to write a review
such as discountsorredeemable points
Return Rate

VIII. Provide delivery estimatesand order tracking
▶ Sometimes customers order a product fora special
occasion or a specific event. Ifthe order arrives after
the event, the customers might not need it anymore
and return it. T
o prevent such returns, you can
provide the estimated date of delivery to your
customers. Moreover, you must consider giving real-
time order tracking and order updates to your
customers to instil trust that their orders will arrive on
time. In case of a delay, notify your customers
instantly to ensure prompt communication.
• Showcase estimated date of delivery based on the
pin code of the customer
• Provide real-time order tracking and proactive order
updates via text and email
Return Rate

IX. Ensure order accuracy:
•
•
•
•
•
•
▶ One fourth of the customers claim that the ecommerce brand sent them
an incorrect order as the reason for their return. Thus, improving
your order accuracy is a good place to start for reducing your returns.
▶ Here'swhat you can do:
Use warehouse optimization by performing ABC analysis—grouping
products based on historical purchase data and patterns, i.e. group A-
most frequently purchased products, group B- less frequently purchased
products, and group C- rarely purchased products
Optimize the picking and packing process to improve picking
accuracy by eliminating any possible confusion for the picker
Incorporate smart automation in the order fulfilment process, such as
barcode scanners, conveyorbelts, robots, and more
Build incentive programs to reward pickers with maximum accuracy
Perform a quality check at the time of order processing to ensure that the
items shipped to the customers are correct and in the right condition
Place the correct shipping labels so that the shipping provider can
deliver the package accurately to your customers
Return Rate

X. Prioritize yourpackaging
▶ There are times when orders are damaged during
shipping due to the use of inappropriate
packaging material. To reduce the risk of delivering
a damaged product to your customer, it's best
to avoid common packaging mistakes and use
high-quality packaging materials that can protect
your orders in transit.
• Use secure dunnage, i.e., bubble wrap, packaging
peanuts, and more to pack fragile products such
as glassware
• Use top-quality packaging materials
Return Rate

XI. Send a post-purchase email
▶ The post-purchase experience defines if a customer
will repurchase from you or not. Apart from asking for
product feedback, you can engage with your
customers by sharing product tips and "how-to"
guides. This kind of communication can help you
resolve any issues or pain points the customers face
while using your product rather than returning it.
• Send emails asking for feedback if your customers are
loving your product or not
• Give product information such as easy-to-understand
tips and guides can drive customer satisfaction
Return Rate

XII. Promote exchanges during returns
▶ Half of the customers replace the item they returned,
and only 16% of customers will switch to a different
brand to find the same product. To keep customers
coming back to you even after returns, you can make
the exchange process easier and recapture your
revenue.
• Encourage customers to buy another product when
they're returning an order by giving color, size, and
style recommendations
• Give your customers the option to get their refund in
their store wallet so that they can purchase something
else in the future
• Offer immediate refunds for wallets unlike source
account that take 5-7 business days
Return Rate

XIII. Find out why customers are returning your products
▶ To reduce ecommerce returns, it's essential to know
the root cause of returnsfrom the customers. There
are changes that the post-purchase email isnot
answered by a customer for any reason. By
implementing a mandatory survey and feedback
on the return form, you can gain insight into the
exact reasonsthat drive returnsfor particular
products.
• On return forms, ask for specific reasons for return
and an additional feedback
• Provide tick boxes that will help flag issues such as if
it looks different in the images or it seems larger or
smallerthan expected
Return Rate

XIV. Combat returns fraud
▶ 30%of customers deliberately make online orders because they know they
can easily return them for a full refund. Such return frauds can result in a loss
of inventory and profits. You can invest in a fraud-protection software that
helps you detect fraudulent behavior.
• Implement a quality check at the customer's doorstep
• Send OTP (one-time password) to the customer to ensure delivery of high-
value orders
• Identify fraudulent customers and blacklist them
• When you’re selling on marketplaces and the returned products don't pass
the quality check, raise a claim
Return Rate

Product Pricing & Merchandizing
▶ Product Pricing is driven by the margins that you wish to make on
the product once all the costsare considered
▶ It’s fair to first note how a particular product P&L Statement looks like
to be able to come to a definite strategy on product pricing & MOP
management.

Mixed Strategieson Shipping
▶ Standard Shipping +Expedited Shipping :gives you the opportunity
to upsell on shipping by showing the estimated time in transit for
customers that need fast delivery.
▶ Free Standard +Expedited Shipping :ree shipping brings customers
in and drives them to check out. Show expedited shipping to entice
them to pay fora fasterdelivery.
▶ Standard shipping +in-store pickup +same-day delivery: Local
customers love in-store pickup and same day delivery. For non-
locals, you can still give them a great standard rate.

Calculating Ecommerce Shipping
Costs
▶ Packaging Size +weight :
▶ If your products are relatively uniform across your store, going with a per-
item, zone-based approach, where the shipping price varies by customer
location and not product size or weight, might work well.
▶ If you sell particularly large products, or those that don’t lend
themselves to the typical rectangular box (like the ones we see so
frequently from Amazon). Getting rates directly from a carrier like
Gati, Delhivery, Xpressbees, or others is a great way to ensure you’re
offering the best rates to customers.
▶ The important thing to focus on here is making sure your products
have accurate weights and dimensions so that the rate you get
back from a carrier is as accurate as possible. To do this, break your
products into groups and focus on getting weights and dimensions
for the heaviest or largest 20%and the smallest or lightest 20%.

Discounts Vs Cashbacks
▶ Itiseasier for any business to take the traditional route and go for
discount promotions. Over the years—especially in these times, it has
been proven that discount offers aren’t the best way to promote a
brand orproduct as the only marketing tactic to use.
▶ Discounts bring in more sales in the short term. So, in order
to increase sales in the long-term, you need to develop another
strategy.
▶ When you offer a traditional discount, you devalue your product
and brand. It’s important to consider that discounts are not the only
valid strategy.

Why Cashback?
▶ Cashback ss the option where a percentage of the product’s price
is returned. You can offer cashback incentive to drive more online
business without devaluing or hurting your brand.
▶ Ifyou run the right promotions or use your promotions strategically,
they will increase your long-term profitability. Increasing cashback
promotions and reducing discount promotions ispart of the
equation.
▶ Ifyour company offers discounts on a continuous basis it will affect
your sales margins. As a result, it won’t be optimal anymore to
provide them. The more money customers spend buying from you,
the greater their reward. So, you’re just rewarding them for
supporting your brand.

Types of Cashbacks?
▶ Instant Cashback :Major tech-enabled ecommerce platforms deal
in Instant cashbacks to their users using a particular bank card etc.
For this they need a BIN Series basiswhich it can be updated
instantly.
▶ Delayed Cashback :Inmost companies, there isno instant
mechanism, hence customer will have to wait for them to get their
cashback in a 60 or a 90-day window.
▶ Wallet Cashback :Itcomes back as points in the local wallet of that
store which you can redeem on yournext purchase.It createsa
loyal base of customers who are pressed to come back to use their
cashback points.

Common Forms of Cashbacks
▶ Flat Rate Cashback :e.g. Rs.5000 cashback on a minimum
purchase of Rs.30,000.
▶ Tiered Cashback :10%up to Rs.2500 for purchases done below 40k,
10%up to 5k for purchases done above Rs. 40,000.
▶ Different Rate of cashback :5%cashback for purchasesup to
Rs.10,000, 10%cashback for purchases>Rs.10,000.

Business Case of a Category
▶ A Business Case is an Executive Level Presentation on what will the
Business health look like if we achieve our targets
▶ Itsets the right platform for expectations and a benchmark for
performance
▶ A typical Business Case will include :
▶ Units/ Orders
▶ Gross Revenue
▶ Gross Margin
▶ Gross AUR
▶ Expenses
▶ Net Revenue
▶ Net Margin
▶ Net AUR

Final Presentation
▶ Current Company IndustryData, Company Background & Key
Financials
▶ Category TAM & Scope of Growth. SWOT Analysis
▶ Who isthe customer
▶ Competitor Analysis
▶ Category Tree
▶ 4Ps
▶ Merchant Shortlisting, Short Term +Long term Plan, Key Pointers in
SLA Including Return & Commissions
▶ Product Pricing & BusinessCase

Groups
▶ Team A –Heads UP forTales - Apparels
▶ Team B - Boat Lifestyle - Shoes
▶ Team C - Sugar–Specs
▶ Team D –Lenskart –Medicines
▶ Team E –Snapdeal –Food Delivery
▶ Team F –Swiggy –Industrial Material
▶ Team G –Cardekho –House Rentals
▶ Team H –Google Pay –Insurance

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