Time to Court the High Spenders? Report Reveals Key Online Spending Trends
Retailers and brands have been pouring time, money and energy into maximizing the online shopping boom this year, but why are some companies seeing better conversions than others? The answer may be in how brands and retailers are not fully using customer data while also deploying ineffective email marketing campaigns.
In Bluecore’s 2020 Retail Email Benchmark Report, researchers at the firm said if companies want to know if a campaign is successful, they need to take a close look at their high spenders. “There’s a high correlation between how high spenders are engaging with e-mail (and other) campaigns and overall shopper conversion rates,” the authors of the report said.
But it is not just about wooing high spenders. Bluecore said conversion frequency also plays an important role. “The more shoppers spend with a brand, the stronger the connection they’re likely to feel and the more likely they are to engage,” Bluecore said. “This means that if high spenders have high engagement, overall conversions are likely to go up as well.” The researchers said shoppers who purchased from a brand six times “have a 53 percent likelihood of purchasing again, while a onetime buyer only has an 18 percent chance of making another purchase.”
Bluecore’s research involved analyzing more than 9.5 billion e-mails from 400 retail brands over the past year. The firm said the report shows “how different types of e-mail communications and levels of personalization influence customer acquisition, customer retention and other high-value shopper behaviors.”
The research, for example, revealed that higher spenders are also less likely to unsubscribe from a brand’s e-mail list, “with an average unsubscribe rate of 0.21 percent compared to 0.24 percent among low spenders.”
Conversion rates were also analyzed. With fashion apparel, the research showed that a brand’s high spenders have a 0.77 percent conversion rate, which compares to “average spenders” with a 0.61 percent rate, and a conversion rate of 0.52 percent for “low spenders.” Bluecore’s report examined conversion rates across multiple categories such as beauty, home goods, accessories and sporting goods, among others.
Another revelation culled from the research was the importance of existing customers. “The long-term benefits of customer retention far outweigh those of customer acquisition,” Bluecore noted. “Existing customers — even those who are considered at-risk or lost — are easier to convert than first-time buyers, and make higher-value purchases when they do.”
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