As the digital world has grown over the years it’s provided more opportunities for retail businesses to get ahead of the game and expand their customer base. This has been even more apparent during the Covid-19 pandemic, with retailers relying on a digital presence for businesses to survive.
One of the key things to come out of digital platforms is the opportunity to advertise. Whereas billboards and magazines all still have their place, the range of options online are extremely attractive and cost-effective.
In 2020 alone it’s predicted that digital ad spending worldwide will reach a total of $332.84 billion, which represents a worldwide growth of 2.4%. Since the pandemic hit, e-commerce sales, as a percentage of retail sales, has soared. When looking specifically at June 2020, the proportion of e-commerce sales peaked at 32.6%. We may have seen a gradual decline since coming out of lockdown, but during Q4, the growth is expected to continue.
But with so many options out there, where do you start and what is going to be the most cost-effective platform for your business? Say hello to paid social media.
Love it or hate it, social media is arguably the most powerful tool that has come with digital. It has the power to influence, to promote and to destroy businesses, but it’s not something that should be feared. It should be embraced and used to our advantage, especially when it comes to engaging with your customers.
So, what exactly should you be doing when it comes to paid social media activity? Here’s some tips to ensure you are maximising the features and benefits that comes with social advertising.
Run a comprehensive retargeting strategy
Perhaps one of the most frequently used strategies, running a retargeting campaign to existing customers can ensure that they purchase from you again. Using personalised up-selling strategies and cross-sell suggestions is a great way to entice your customers as you’re appealing to their interests specifically.
Amazon do particularly well with their retargeting strategy, often showing you products a couple of days later that you may not have clicked that purchase button on. Even if you did purchase it, you might find yourself finding similar items.
Alongside products, why not consider a referral scheme, an upgrade option or a longer-term subscription? You can increase your customer lifetime value by simply keeping them engaged for a longer period of time.
Retargeting strategies on social media can be found across all platforms and you should use your strategy to determine the right channels when you see a higher Return On Ad Spend (ROAS).
Offer bundling options
An incentive we’re all taught to do during our early days working in retail is the importance of increasing purchase value, essentially upselling. Suggesting shoe polish for those new pair of boots or waterproof spray for a camping bag, these bundles are both useful to the customer and increase the overall average order value.
By encouraging bundle purchases from audiences who have viewed specific products, ASOS do this particularly well, you could see that online shopping basket increase.
To maximise on bundle options it really comes down to the ads that you run on social media. You could retarget individual product views on your website with a bundle option (this is where your upsell comes in), or you can advertise your bundle options individually to ensure you are focusing on high ROAS products.
Opting for an ‘always-on’ social media campaign, rather than running short term campaigns for promotions, is a great way to gather even more scalable and reliable data that you can use to identify your target audience and customers. With this data you can make more informed decisions on the best performing platforms and increase your retargeting pools with the most relevant people.
As well as benefiting from more data, always-on campaigns allow you to be omnipresent to your audiences which improves brand recall. They also allow you to capitalise on lower competition outside of peak shopping periods.
Focus on customer retention
Attracting new customers is important but what about your existing ones? A focus should be made on customer retention, particularly when it comes to engagement.
Introducing a customer loyalty or referral programme is a great incentive to reward your most valuable customers to ensure they make repeat purchases. By offering your existing customers exclusive offers, you are making them feel they are valued.
Social ads that are targeted specifically to people who have bought from you will go a long way in drawing customers back to make repeat purchases and ultimately, increase that lifetime value.
We’ve found that increasing the lifetime value of customers doesn’t have to be a complicated process. It’s about ensuring that you consistently strive to engage with your audience and use retargeting to keep your brand front of mind, even when customers have left your online store.
Romany Simpson, paid media director at 360 OM