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Retailers Missing the Mark on Product Promotions

Posted on 11.13.2014

A new study from OrderDynamics suggests that the majority of e-commerce merchants are missing out on sales by promoting irrelevant inventory to shoppers.

In fact, the study, which compares customer acquisition and retention to a “dating game,” found that 74 percent of retailers promote irrelevant items to shoppers. According to OrderDynamics, a majority of retailers received failing grades in shopper follow-up by sending irrelevant information in promotional emails. For example, a pet supplies retailer sent promos for cat and dog food to someone who only browsed the aquatics department.

Additional data found that 33 percent of retailers never follow up with shoppers who signed up for their mailing list. Conversely, some retailers go overboard with follow ups, with one retailer from the study sending 17 emails to a subscriber in a four-week period.

“Our message to retailers is simple: customer relationships are theirs to win or lose, and retailers must focus on these disconnects in their customers’ experiences to succeed during the vital holiday push. They must use data more intelligently and effectively in order to engage and win shoppers,” said Kevin Sterneckert, CMO, OrderDynamics. “Retailers must walk a fine line between romancing customers and over-approaching them to ensure that shopping is a seamless experience. If retailers disappoint shoppers, they risk losing not only the initial sale but the customer relationship as well.”

The study also found that 46 percent of shoppers prefer to go directly to a retailer’s website to search for products. Unfortunately, many e-commerce sites don’t serve up the best search results, which can result in lost conversions and site abandonment. For instance, a retailer from the study returned 65 results for the keywords “silver cufflinks,” with only three of the items actually being cufflinks.

Lastly, the study sheds light on the importance of offering order tracking. According to the data, the majority of consumers express a strong preference to receive order tracking information directly from the retailer, but only 15 percent of retailers are actually providing this functionality.

“We call these disappointments and disconnects in data and operations the Ghost Economy, and it is worth more than $800 billion annually to global retailers to solve these issues and create frictionless experiences for their customers,” said Sterneckert.

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