E-commerce is a highly competitive environment where giant online retailers like Walmart and Amazon make it difficult for other online merchants to grow and drive conversions.
The reason why conversion remains low for some is mainly that customers cannot find what they are looking for. More than ever before, customers are shopping online for the convenience. If they cannot find what they are looking for on your site, they will leave, abandon carts and go to your competitor to buy what they need quickly and easily.
The key to solving the conversion problem is personalization – deducing what your customers want and how to help them seamlessly find what they’re looking for. It is going beyond acknowledging what they have bought in the past and accounting for what they have viewed and interacted with.
Join Jonathan Meyer, senior solutions engineer, HawkSearch by Bridgeline, in his informative SMX Next session to learn how to drive conversions and increase average order value. The answer? Implementing machine learning and AI-powered search and recommendation functionalities into your e-commerce site.
After this session, you’ll be able to:
Tune into the session and get ahead of your competition in 2023 by helping your customers stay engaged during their search on your e-commerce site.
New on Search Engine Land
In this article, we will discuss the 15 best e-commerce stocks to buy now. If you want to explore similar stocks, you can also take a look at 5 Best E-Commerce Stocks to Buy Now.
According to an industry analysis report by The Business Research Company, the global e-commerce market was worth $2.63 trillion in 2021 and is expected to reach a value of $3.04 trillion in 2022, growing at a compound annual growth rate of 15.7%. The market is expected to grow at a CAGR of 12% from 2022 to 2026 and reach a value of $4.79 trillion by the end of the forecasted period. This growth is expected to be driven primarily by the increasing adoption of smartphones and a growing number of internet users. It is estimated that the number of internet users across the globe in 2022 has reached 5 billion, and the number of smartphone owners has climbed to 6.64 billion. Region-wise, North America dominated the market share of the global e-commerce industry in 2022, with the APAC region being the runner-up. The major players operating in the e-commerce market include Walmart Inc. (NYSE:WMT), Alibaba Group Holding Limited (NYSE:BABA), and Amazon.com, Inc. (NASDAQ:AMZN). This article will discuss some of the best e-commerce stocks to buy now for investors that are looking to capitalize on the secular trends that are driving this market's growth.
We studied industry analysis reports compiled by leading market research agencies and noted down the companies that are dominating the e-commerce market. We studied these companies' business models and their product pipelines. We then checked for the market sentiment around each stock and only included stocks that had positive market sentiment associated with them. We arranged these stocks according to their popularity among elite hedge funds, from least to most.
Number of Hedge Fund Holders: 16
Lightspeed Commerce Inc. (NYSE:LSPD) is a leading provider of cloud-based point-of-sale (POS) software for merchants of all sizes. The company’s software helps merchants manage their businesses by providing tools for customer management, inventory control, employee scheduling, payment processing, analytics, and more. Lightspeed Commerce Inc. (NYSE:LSPD) is one of the best e-commerce stocks to buy now and is worth $2.37 billion on the open market, as of November 30.
On November 3, Lightspeed Commerce Inc. (NYSE:LSPD) posted earnings for the fiscal third quarter of 2022 in which the company outperformed EPS estimates by $0.06. The company generated a revenue of $183.70 million, up 37.89% year over year, and beat estimates by $0.77 million. On November 4, Barclays analyst Raimo Lenschow updated his price target on Lightspeed Commerce Inc. (NYSE:LSPD) to $20 from $27 and reiterated an Overweight rating on the shares.
At the end of Q3 2022, 16 hedge funds were long Lightspeed Commerce Inc. (NYSE:LSPD) and held stakes worth $216 million in the company. This is compared to 15 positions in the preceding quarter with stakes worth $203 million. The hedge fund sentiment for the stock is positive.
Some of the most prominent companies in the e-commerce industry include Walmart Inc. (NYSE:WMT), Alibaba Group Holding Limited (NYSE:BABA), and Amazon.com, Inc. (NASDAQ:AMZN).
Number of Hedge Fund Holders: 16
The RealReal, Inc. (NASDAQ:REAL) is a leading e-commerce platform for authentic luxury products. The company has been able to establish itself as the go-to destination for luxury consignment. The company has a first-mover advantage in the luxury consignment space and is a clear leader in the area. The RealReal, Inc. (NASDAQ:REAL) is ranked among the best e-commerce stocks to buy now and is currently trading at bargain levels. The stock is trading at a PE ratio of 5x, as of November 30.
On October 18, Piper Sandler analyst Edward Yruma updated his price target on The RealReal, Inc. (NASDAQ:REAL) to $3 from $4 and maintained a Neutral rating on the shares. On November 9, Baird analyst Mark Altschwager revised his price target on The RealReal, Inc. (NASDAQ:REAL) to $3.75 from $6.00 and reiterated an Outperform rating on the shares.
At the close of Q3 2022, 16 hedge funds disclosed stakes in The RealReal, Inc. (NASDAQ:REAL). The total value of these stakes amounted to $20.99 million. As of September 30, Marshall Wace LLP is the top investor in the company and has stakes worth $5.06 million.
Number of Hedge Fund Holders: 25
Chewy, Inc. (NYSE:CHWY) is a leading online pet retailer in the United States and has a rapidly expanding customer base, revenue growth, and an expanding product offering. The company deals in pet food and treats, pet supplies and pet medications, and other pet-health products, as well as pet services for dogs, cats, fish, birds, small pets, horses, and reptiles through its website.
Wall Street is bullish on Chewy, Inc. (NYSE:CHWY) and the stock is placed on our list of the best e-commerce stocks to buy now. On November 15, MoffettNathanson analyst Michael Morton started coverage of Chewy, Inc. (NYSE:CHWY) with a Market Perform rating and a $33 price target. On November 21, Deutsche Bank analyst Lee Horowitz raised his price target on Chewy, Inc. (NYSE:CHWY) to $50 from $40 and maintained a Buy rating on the shares.
At the close of the third quarter of 2022, 25 hedge funds held stakes in Chewy, Inc. (NYSE:CHWY) worth $303.6 million. This is compared to 25 positions in the previous quarter with stakes worth $288.5 million. As of September 30, Marshall Wace LLP is the dominant shareholder in the company and has a position worth $58.2 million.
Here is what ClearBridge Investments had to say about Chewy, Inc. (NYSE:CHWY) in its second-quarter 2022 investor letter:
“We exited our position in Chewy, Inc. (NYSE:CHWY), in the consumer discretionary sector. While we continue to have a favorable opinion of the online pet products retailer, we decided to consolidate our exposure to the pet industry.”
Number of Hedge Fund Holders: 31
Wayfair Inc. (NYSE:W) is an American e-commerce company that specializes in selling home goods and furniture. Founded in 2002, Wayfair Inc. (NYSE:W) has quickly become one of the leading online home goods retailers in the United States. The company's website offers customers an extensive selection of home items, including furniture, décor, rugs, lighting, kitchenware, and more. The company is well-positioned to capitalize on the long-term growth of the e-commerce industry and is ranked among the best e-commerce stocks to buy now. As of November 30, Wayfair Inc. (NYSE:W) is worth $3.79 billion on the open market.
This November, Truist analyst Naved Khan updated his price target on Wayfair Inc. (NYSE:W) to $50 from $60 and maintained a Buy rating on the shares. On November 30, Stephens analyst Nicholas Zangler reiterated his $45 price target and an Equal Weight rating on Wayfair Inc. (NYSE:W).
At the end of Q3 2022, 31 hedge funds were eager on Wayfair Inc. (NYSE:W) and disclosed positions worth $467.4 million in the company. Of those, Spruce House Investment Management was the top investor in the company and held stakes worth $113.9 million.
Here is what Vulcan Value Partners had to say about Wayfair Inc. (NYSE:W) in its second-quarter 2022 investor letter:
“We sold Wayfair Inc. (NYSE:W) during the quarter. It was a mistake. Wayfair Inc. is a leading e-commerce retailer for home goods and furnishings. Prior to our initial investment, we watched Wayfair build its business. As customers increased, revenue per customer expanded, and the company grew year over year. Wayfair invested heavily in its logistics network to handle big and bulky furniture from freight forwarding all the way to last mile delivery. We believed this created a positive flywheel.
Wayfair became a more cost-effective distribution channel for suppliers, reduced delivery times to customers, and improved its customer shopping experience. Nonetheless, at the time, Wayfair did not produce free cash flow, and therefore it did not qualify for investment. During the pandemic, consumer behavior changed, and as a result, the company’s margins and free cash flow reached levels previously not expected for many years to come. We believed the competitive dynamics had changed for the long term in favor of Wayfair and the company qualified for investment.
We initially purchased Wayfair in the fourth quarter of 2020. Although we knew Wayfair would face difficult comparisons post-COVID, we believed the company would continue to generate free cash flow and its value would continue to be stable. The exact combination of persistently high levels of inflation, a possible recession, and the company’s commitment to continue investing heavily for future growth has resulted in negative free cash flow. We believe sustainable free cash flow is the key ingredient to long-term value stability and the company’s future free cash flow is in question. Therefore, we followed our discipline and sold Wayfair.”
Number of Hedge Fund Holders: 36
Coupang, Inc. (NYSE:CPNG) is a leading South Korean e-commerce company that is revolutionizing the shopping experience of consumers in South Korea and beyond. The company has seen strong growth in exact years which has been driven by a combination of factors, including the company’s strong digital platform, its heavy investments in logistics and technology, and its well-executed customer-centric strategy. Coupang, Inc. (NYSE:CPNG) has been dubbed the 'Korean Amazon' and is one of the best e-commerce stocks to buy now.
On November 9, Coupang, Inc. (NYSE:CPNG) released earnings for the third quarter of fiscal 2022. The company generated a revenue of $5.10 billion and reported earnings per share of $0.05, outperforming consensus by $0.08. This October, HSBC analyst Junhyun Kim took coverage of Coupang, Inc. (NYSE:CPNG) with a Buy rating and a $27.80 price target.
At the close of the third quarter of 2022, 36 hedge funds were long Coupang, Inc. (NYSE:CPNG) and disclosed stakes worth $3.85 billion. This is compared to 37 hedge funds in the previous quarter with stakes worth $2.93 billion. As of September 30, Maverick Capital is the top investor in Coupang, Inc. (NYSE:CPNG) and has a position worth $1.35 billion.
Here is what Baron Funds had to say about Coupang, Inc. (NYSE:CPNG) in its third-quarter 2022 investor letter:
“Coupang, Inc. (NYSE:CPNG), the largest e-commerce platform in South Korea, contributed after reporting a sizable beat on second quarter earnings and raising annual EBITDA guidance. Upside was concentrated in e-commerce, where Coupang is now driving sequential margin expansion while maintaining a growth rate that is triple that of the industry average, lending credence to the investment case that Coupang will consolidate the fragmented e-commerce industry in Korea across both general merchandise and grocery, with healthy long-term margins to follow.”
Number of Hedge Fund Holders: 42
eBay Inc. (NASDAQ:EBAY) has a large and established user base that provides a solid foundation for future growth. The company has over 138 million active buyers and roughly 18 million sellers, representing one of the largest online commerce ecosystems in the world. Moreover, eBay Inc. (NASDAQ:EBAY) has invested heavily in its mobile platform, making it easier for consumers to shop and transact on the go. The company also has a robust presence in the global market. The company's presence in over 190 countries provides significant potential for growth, especially in emerging markets, and places it among the 15 best e-commerce stocks to buy now.
On November 3, Benchmark analyst Daniel Kurnos revised his price target on eBay Inc. (NASDAQ:EBAY) to $62 from $66 and reiterated a Buy rating on the shares. This November, Baird analyst Colin Sebastian updated his price target on eBay Inc. (NASDAQ:EBAY) to $55 from $60 and maintained an Outperform rating on the shares.
At the end of Q3 2022, 42 hedge funds were bullish on eBay Inc. (NASDAQ:EBAY) and disclosed positions worth $1.07 billion. Of those, D E Shaw was the largest shareholder in the company and held stakes worth $218 million.
Here is what Smead Capital Management had to say about eBay Inc. (NASDAQ:EBAY) in its third-quarter 2022 investor letter:
“Two things are very noticeable right off the top. First, sometimes you have to be happy losing less in a bear market environment so that you have more of your capital to grow in the next bull market. We are never really happy losing money. Second, 2022 is likely to be our third year of existence as a fund to lose money for the year. This year would join 2008 and 2018 in this undistinguished category. Our biggest detractors was dominated by eBay (NASDAQ:EBAY). Consumer/investor fears about media and e-commerce hit WBD and EBAY and profit taking in Amgen came from early 2022 strength.”
Number of Hedge Fund Holders: 43
Carvana Co. (NYSE:CVNA) is an online used car retailer based in Tempe, Arizona. The company sells certified used cars through its website and offers customers a no-haggle car buying experience. Customers can search for a car, get their credit approved, and purchase the vehicle entirely online. Carvana Co. (NYSE:CVNA) is revolutionizing the used car industry and has created an innovative and convenient way for consumers to purchase used cars. The company is well-positioned to become a leader in the used car industry and is one of the best e-commerce stocks to buy now.
On October 19, Wells Fargo analyst Zachary Fadem revised his price target on Carvana Co. (NYSE:CVNA) to $30 from $35 and reiterated an Equal Weight rating on the shares. On November 21, the chief product officer of Carvana Co. (NYSE:CVNA), Daniel Gill, disclosed the purchase of 133,000 class A shares of the company at a price of $7.62 per share. Shortly after this news, the stock rallied 17% on November 23 to $7.94.
At the end of the third quarter of 2022, 43 hedge funds disclosed ownership of stakes in Carvana Co. (NYSE:CVNA) worth $656.4 million. Of those, CAS Investment Partners was the top investor in the company and disclosed a position worth $138.6 million.
Here is what Steel City Capital had to say about Carvana Co. (NYSE:CVNA) in its third-quarter 2022 investor letter:
“As I write, Carvana Co. (NYSE:CVNA), a long-time short, is circling the drain. After reporting earnings, shares have been roughly cut in half while the company’s bonds are now priced anywhere from 35- to 45-cents on the dollar, with yields ranging from 25% to 40%. While the shares already experienced a steep decline during the past year, the postearnings sell-off appears to reflect investors finally acknowledging the company’s near-term liquidity issues. Raising capital – debt or equity – seems unlikely, if not impossible. Bulls had been holding on to the hope CVNA would meet its stated “goal” of generating “significantly positive EBITDA in FY 2023,” but management walked back that aspiration last week. I always thought the word “goal” reflected squishy language that never carried the same weight as “guidance” and drew conclusions accordingly. The difference is much the same as me telling my wife I have a “goal” of having washboard abs vs. “guidance” that I will have them by swimsuit season. The language was deliberate (and probably highly lawyered), and in my estimation, reflected an effort to deliver bulls something to cling on to without the company exposing itself to a lawsuit when they (inevitably) missed.”
Number of Hedge Fund Holders: 45
Etsy, Inc. (NASDAQ:ETSY) offers a platform for creative entrepreneurs to showcase and sell their handmade and vintage items. Etsy, Inc. (NASDAQ:ETSY) has been able to capitalize on a growing trend of consumers wanting to buy unique, one-of-a-kind items while allowing sellers to reach a larger audience than they would be able to on their own. The company has also seen strong growth in its user base, with over 88 million active users on the platform as of Q3 2022. This growing user base will help to drive more sales on the platform.
On November 2, Etsy, Inc. (NASDAQ:ETSY) posted earnings for the fiscal third quarter of 2022. The company reported an EPS of $1.07 and beat expectations by $0.30. The company's revenue for the quarter amounted to $594.47 million, up 11.65% year over year and ahead of Wall Street consensus by $30.26 million. On November 3, Deutsche Bank analyst Lee Horowitz raised his price target on Etsy, Inc. (NASDAQ:ETSY) to $95 from $85 and maintained a Hold rating on the shares.
At the close of Q3 2022, 45 hedge funds were bullish on Etsy, Inc. (NASDAQ:ETSY) and disclosed positions worth $1.09 billion. This is compared to 29 positions in the preceding quarter with stakes worth $595.8 million. The hedge fund sentiment for the stock is positive. As of September 30, Harris Associates is the top investor in Etsy, Inc. (NASDAQ:ETSY) and has a position worth $189.5 million.
Here is what ClearBridge Investments had to say about Etsy, Inc. (NASDAQ:ETSY) in its third-quarter 2022 investor letter:
“Stock selection in the consumer discretionary sector proved a tailwind to performance. Etsy (NASDAQ:ETSY), which operates a number of online marketplaces for craft and artisan goods, delivered second quarter results that demonstrated the company’s pricing power, cash flow generation, and margin upside remain intact. While Etsy is experiencing declines in gross merchandise sales, it is seeing better than expected take rates and improved margins. We believe the company is well-positioned to grow advertising spending on its marketplace, bring in new buyers and strengthen its e-commerce advantages.”
Number of Hedge Fund Holders: 55
Sea Limited (NYSE:SE) is a Singapore-based internet company that provides digital entertainment, e-commerce, and digital financial services to consumers and businesses in the Asia Pacific region. The company operates Shopee, one of the largest e-commerce platforms in Southeast Asia. Sea Limited (NYSE:SE) is a leader in the digital entertainment and e-commerce markets in Southeast Asia.
Wall Street analysts are bullish on Sea Limited (NYSE:SE). On November 16, JPMorgan analyst Ranjan Sharma raised his price target on Sea Limited (NYSE:SE) to $75 from $70 and reiterated an Overweight rating on the shares. This November, BofA analyst Sachin Salgaonkar updated his price target on Sea Limited (NYSE:SE) to $74 from $86 and maintained a Buy rating on the shares.
At the close of Q3 2022, 55 hedge funds disclosed ownership of stakes in Sea Limited (NYSE:SE). The total value of these stakes amounted to $2.44 billion. As of September 30, Tiger Global Management LLC is the top investor in the company and has a position worth $535.4 million.
In addition to Sea Limited (NYSE:SE), Walmart Inc. (NYSE:WMT), Alibaba Group Holding Limited (NYSE:BABA), and Amazon.com, Inc. (NASDAQ:AMZN), are also well-positioned to capitalize on the secular growth trends in the global e-commerce industry.
Number of Hedge Fund Holders: 62
Shopify Inc. (NYSE:SHOP) has a strong position in the e-commerce sector and offers an increasingly attractive suite of products and services. The company offers a leading cloud-based multi-channel commerce platform that provides tools for merchants to build and manage their online, mobile, and brick-and-mortar stores. Shopify Inc. (NYSE:SHOP) enables merchants to sell their products across multiple channels, including web, mobile, social media, brick-and-mortar, and other marketplaces. The company’s platform makes it easy to customize, manage, and scale an online business. Shopify Inc. (NYSE:SHOP) is one of the best e-commerce stocks to buy now.
On October 27, Shopify Inc. (NYSE:SHOP) posted earnings for the fiscal third quarter of 2022 in which it beat EPS estimates by $0.05. The company generated a revenue of $1.37 billion, up 21.58% year over year and ahead of Wall Street expectations by $30.33 million. On November 30, Jefferies analyst Samad Samana reiterated a Buy rating and his $40 price target on Shopify Inc. (NYSE:SHOP).
At the end of Q3 2022, 62 hedge funds were long Shopify Inc. (NYSE:SHOP) and held collective stakes of $2.43 billion in the company. Of those, ARK Investment Management was the top investor in the company and disclosed a position of $391.5 million.
Here is what Artisan Partners had to say about Shopify Inc. (NYSE:SHOP) in its third-quarter 2022 investor letter:
“Shopify Inc. (NYSE:SHOP) is a leading e-commerce platform supporting over 2 million merchants with software, online storefronts and payments technology. Like Uber, Shopify returned to mid-cap territory during Q2 as the company’s profit cycle and share price have faced significant pressure. Earlier this year, the company began a phase of investments to support a range of future growth drivers, including Shopify Plus for larger brands, logistics services, international expansion, point-of-sale payments and social media-based commerce. With high inflation putting pressure on consumer spending, and with e-commerce activity normalizing after a massive pandemic spike, Shopify’s earnings have fallen sharply. While we have outstanding questions about the likelihood of success for the company’s capital-intensive logistics investments, we decided to take advantage of the stock’s >75% YTD decline and initiate a GardenSM position at a deep discount to our PMV estimate. Our thesis is predicated on our belief there is still a long runway for commerce to move online, and Shopify is well-positioned to win share of this market. The company has created an ecosystem of products (payment processing, financing, shipping, customer engagement tools, etc.), partners (TikTok, Google, Meta), sales channels and over 6,000 apps to help its merchants sell online and establish direct relationships with customers.”
Click to continue reading and see 5 Best E-Commerce Stocks to Buy Now.
Disclosure: None. 15 Best E-Commerce Stocks to Buy Now is originally published on Insider Monkey.
As you build your ecommerce brand, your initial focus must be customer acquisition.
However, too many online retailers continue to spend most of their time and energy on attracting new shoppers and neglect customer retention as their businesses grow.
But building a loyal customer base is essential to creating a successful ecommerce company.
In addition to the savings in customer acquisition costs, repeat buyers will likely make larger purchases and act as unofficial brand ambassadors, recommending your company to others.
While the research on customer retention still cited in the industry is from 1990 – long before the advent of online shopping – that study by researchers from Bain and Harvard found that a 5% increase in retention rate led to increased profits of 25% to 95%.
If the pertinent metric for ecommerce is even half of that, customer retention is worth investing your time and money.
Dozens of strategies, from minor tweaks to major initiatives, can Strengthen your retention rate.
Here are 12 that you can apply to Strengthen customer retention in 2023.
Your marketing team can play a critical role in customer retention and acquisition. In fact, marketing targeted at past and current customers is one of the most effective things you can do to increase sales.
These six (mostly) low-cost and high-impact strategies could lead to positive returns in 2023.
An advantage of ecommerce over traditional retail is the wealth of data at your disposal.
However, all that information does you no good unless you invest in the tools you need to analyze it.
A customer relationship management (CRM) platform like Salesforce Commerce Cloud or Zoho Commerce offers tools to enhance customer retention.
Leverage the data you have on your customers to deliver relevant messages that will drive repeat sales.
That inside knowledge gives you a huge leg up on the competition, so make the most of that advantage.
A referral from a friend is an excellent way to attract new customers.
If you’re doing everything right, your customers are talking up your business for free because they love your products or services, and want everyone to know about them.
However, you can juice your referral pipeline with incentives or rewards for referrals that lead to new business. There are plenty of tools out there to help you do so, such as Referral Candy, Ambassador, and Referral Rock, to name a few.
A referral coupon also gives you data points to better understand which customers deliver your business its most significant boost.
Time coupons and discount codes to optimize customer retention.
For example, a coupon after a first purchase incentivizes a second purchase, making the customer a repeat buyer.
Do some A/B testing to determine optimal discount amounts and timing for different customer profiles, then automate a program to deliver those to your customers.
Human, personal customer service is expensive, but it can pay big dividends.
A positive resolution to a customer’s problem encourages customer retention while feeling ignored or (worse) mistreated can lead to angry posts or reviews.
Engage with consumers on social media.
Have staff available to provide personal responses to customer service inquiries and other questions and comments on social channels.
Emotional connection and the feeling of being heard will increase customer retention.
Email can seem very old school in this age of Slack, WhatsApp, TikTok, and ever-proliferating social channels, but here are the basic facts:
An email is a low-cost tool that’s great for high-frequency contact, particularly with your best customers.
A/B test messaging and frequency to design effective email campaigns for different customer profiles, then automate with software such as Mailchimp, HubSpot, or Salesforce.
Customer experience is at the heart of customer retention, and your fulfillment operations play the most direct role in that experience for online retail.
Work with your logistics team or your fulfillment company on these six fulfillment upgrades for 2023.
When a customer places an order, they want it to go to the top of the list for picking and packing in the warehouse and ship quickly to arrive at their door in days (or even hours!).
Of course, the reality is different; orders get queued for fulfillment and shipping in the order they were placed.
Delivery time depends on the distance from the warehouse to the customer’s address and external factors contributing to delivery delays.
Here’s what you (or the right third-party logistics provider) can do to get orders delivered quickly and enhance customer retention:
Ecommerce thrives on reliability, so your orders must be picked and packed flawlessly nearly 100% of the time.
Mistakes will happen, and your customers will forgive you for them (see customer service above), but they should be extremely rare.
Create a report card for your fulfillment operations and if your error rate is above 0.5%, level up in 2023.
Find ways to make unboxing memorable.
That could be anything from appealing, branded packaging to inserts with graphics and text that convey the personality of your brand to coupons offering discounts on future purchases or other special perks.
Plus, consumer-made unboxing videos are a great way to increase awareness of your ecommerce company.
Consumers want to feel good about what they’re buying, and, in 2023, that means helping them feel better about the carbon footprint of their purchase.
Whether your brand has sustainability as a core value or not, green packaging will make an impact.
If a shipment leads to a big pile of garbage (i.e., plastic bags, Styrofoam inserts, or infill), that’s the opposite of a delightful unboxing experience.
Use recyclable or compostable packaging and infill wherever possible, highlighting your brand’s green initiatives in your marketing and packaging.
It’s hard to overemphasize inventory management’s importance for reasons far beyond customer retention.
But managing your inventory well affects consumer experience, as well as your supply chain and profitability.
For example, if you don’t reorder a popular item in time and run out of stock, shoppers may get the same or a similar item from one of your competitors. If they like the competitor’s product, you just lost a customer.
You might be able to keep customers in the fold with backorders, but if you do, often communicate while your customer waits so they know their order is coming.
Even the best-run supply chains sometimes have glitches in today’s world. Still, intelligent, data-driven inventory management can protect your stock from shocks and help preserve your loyal customer base.
Returns are a critical element of your logistics that can make or break your relationship with a customer.
Use your reverse logistics to increase customer retention with these best practices:
Customer acquisition metrics are more exciting and easier to digest than customer retention numbers.
Conversions, customers acquired and lost, and average sale are all valuable data points.
But churn slows your company’s growth, and customer retention accelerates it.
You can do a simple calculation of a customer’s lifetime value (CLV) with this formula:
Customer Lifetime Value = Average Gross Order Amount x Average Orders Per Year x Average Years Retention (companywide)
These values will change over time as you add more data, particularly the average length of customer retention for your brand.
You can refine the calculation to account for profitability by replacing the average gross order amount with the average profit margin on each order.
That allows you to separate repeat bargain hunters from the premium customers willing to pay full price.
While customer acquisition should always be a focal point for your business, remember not to forget about customer retention.
By ensuring you’re providing a delightful experience to your existing customers, you are laying the foundation for a loyal customer base that will keep coming back – and will spread the news of your brand through word-of-mouth, too.
Whether you pursue these or other strategies, elevate your customer retention practices in 2023 to grow your revenue and profits.
Featured Image: garagestock/Shutterstock
Live shopping is a $400 billion industry in China. The live shopping market in the US is $20 billion.
Social media has been a petri dish for live video shopping in China. But in the US, most ecommerce purchases still happen on the open web. Although social shopping is starting to pick up in the US, it hasn’t gained much traction yet.
But companies like the ecommerce startup CommentSold are betting that live shopping is finally about to take off.
The real-time engagement brands get with live video shopping drives higher customer retention rates and higher sales, according to Andrew Chen, chief product officer of CommentSold, which has SaaS products that support live video shopping on the web and in apps.
For now, though, live video shopping nationwide is still somewhat of a novelty because it’s new, culturally and technologically.
The walled garden effect
Although CommentSold is starting to look beyond social platforms, the company has its roots in social media.
Company founder Brandon Kruse got the idea for CommentSold when he started helping his wife sell homemade items through her Facebook shop using live videos.
But the buying process itself wasn’t “live,” Chen said. Transactions were done through PayPal invoices (yawn), which created friction and drop-off.
Kruse launched CommentSold in 2017 as a Facebook app that managed order fulfillment for sellers. It also offered a feature to embed purchase details within posts, including in-video interstitials that would encourage users to comment “sold” once they’d bought an item (hence the company’s name).
Still, CommentSold eventually had to set its sights beyond the Meta-owned walled garden.
“Facebook is fantastic” when it comes to social engagement, Chen said, “but there’s [a lot of] uncertainty when you’re at the mercy of Facebook’s algorithms, so we needed to create a mechanism for clients to manage their own communities” on the open web and especially on mobile.
CommentSold has launched two other tools that extend live shopping beyond Facebook.
One integrates live video ad formats into the backend of websites that already have an ecommerce business but are just missing the live video component. The other product is a mobile SDK that smaller sellers can integrate into their mobile app to launch a full-stack ecommerce solution, including live video and order management.
On average, Chen said CommentSold-enabled shops earn up to $300 per minute during live sales events, and some sellers have seen their year-over-year revenue grow by as much as 400%.
Apps vs. the web
Still, an engaged audience doesn’t automatically translate into success with live video shopping.
There’s a reason why TikTok decided not to expand its ecommerce features in the US and Europe, and why Facebook shuttered its live shopping platform in October.
Part of the holdup is that US shoppers aren’t accustomed to making purchases on social media, Vincent Yang, CEO of live shopping platform Firework, told AdExchanger over the summer. That behavior is why Firework focuses its business on live video integrations on the web, rather than in apps.
But CommentSold has high hopes for mobile.
The biggest revenue growth opportunity for live video shopping is “by far” on a mobile app, Chen said, because social app environments elicit higher engagement than the open web.
Social shopping’s slow trickle in the US is less a matter of cultural discrepancies, Chen said, and more to do with how tech is used for live shopping. Brands and sellers need the right tools, but they also need training.
Facebook’s live shopping failure is evidence that just having the technology to power a livestream isn’t enough. “Platforms also need to invest in training and customer success going live,” Chen said.
CommentSold also sees Facebook’s stumble as an opportunity to grab a little market share.
“Retailers can’t use Facebook’s technology to host live shopping events directly,” Chen said, “but CommentSold’s tech can still be used on both Facebook and Instagram.”
Trying it out
Many of the sellers using CommentSold are new to livestream video, which means educational resources are critical.
Jackie Dierickx, for example, used to be an elementary school teacher before she made livestream selling into a full-time gig through her new shop, Willow & Grace Boutique.
CommentSold’s solution was part of Dierickx’s jump, but “I didn’t have any sales experience,” she said. The platform’s sales training, webinars and live customer service teams are what helped her online shop take off, she said.
Dierickx’s annual revenue from live sales has quadrupled since she launched her boutique in 2020.
CommentSold also has features that help sellers identify which audiences to focus on more closely.
If a user spends a certain amount of money with a seller in a short period of time, for example, or returns to the shop after an extended period away, CommentSold highlights that user as someone especially likely to respond to, say, a live shout-out during a stream.
The more engaging the experience, the higher the customer retention rate, and “customer loyalty is a big part of buying online,” said Katie Wilson, co-founder of the shop Mason Jar Boutique.
Wilson sees a 90% customer return rate to her shop, while Dierickx reports a 73% customer return rate.
“Live commerce has had a huge impact on our business because we’re building [one-to-one] relationships,” Wilson said.
Wondering how to do SEO for ecommerce?
Looking for expert insights on ecommerce SEO?
Uncertain how to make your online store more successful?
From acknowledging that the traditional customer journey is dead, to fast pivoting due to Google’s constant updates, to reassessing benchmarks after the pandemic digital boom and the subsequent fall, experts from award-winning agencies assess what’s next in ecommerce SEO.
We wanted to go beyond unpredictability, so we interviewed 15 digital growth and SEO experts to get their insights, tips, and lessons learned as part of our Ecommerce SEO deep dive.
Ecommerce experts in this article talk about search behaviors, hands-on clients, forecasting for aligning to current trends, and more.
Let’s see what they have to say.
James Finlayson, Head of SEO at the7stars: “Google’s search volumes aren’t just stagnating – in many cases, they’re reducing. Despite this, consumers are conducting more research prior to purchases than ever – on Amazon and other ‘super-retailers’, on TikTok, large publishers with loyal audiences, Pinterest, YouTube, and Reddit. We recently looked at one market where, we estimated, less than 10% of search activity was actually happening on Google.” Read Finlayson on digital and in-store buying, pushing for larger budgets, and their Sofology success story.
Sara Povoas, Head of Content and SEO at iProspect Portugal: “We observed a huge increase in shopping, not only for younger audiences but also for older ones, which is new. I think that users are getting more demanding and more informed — if you have a lot of offers, you need to make smart decisions. So people are looking for more. The reviews, opinions, video demonstrations, and price comparisons are getting more popular as people are doing these decision-making searches in order to make a purchase.” Read Povoas on fluctuating stocks, health and cosmetics trends, and client communication.
Luke Carthy, eCommerce SEO & CRO Consultant: “What I’m seeing across my consumer-based clients is that Average Order Value is up, but the number of transactions is probably similar or falling. What I mean by that is they’re spending more per transaction. Rather than someone going to a clothing retailer, maybe once a month or once every couple of weeks, depending on what their previous shopping habits were, they will shop less frequently. And when they shop, they’ll spend more money. I think that happens for a couple of reasons: One is to mitigate the delivery fees and, secondly, to try and get to thresholds to claim rewards, whatever those might be.” Read Carthy on buy-in, shifting strategies, and B2B clients.
Jen Cornwell, Senior Director of Digital Strategy at Ignite Visibility: “The way people shop has changed, as they had converted to online and are now back to this hybrid style again. I think it’s all about expectation setting: Can we ever get back to those traffic levels or those conversion levels online again? What are some creative ways that we can go about if we think that’s the case? User behavior has taken a big shift.
For instance, we had an electronics client who sold computers, both online and brick-and-mortar. We started to see a shift at the beginning of 2022 as they had more foot traffic to their stores – which they’re happy about, but they do not see as many purchases online anymore. Even in the instances where there isn’t a brick-and-mortar component or the product is only available online, the opportunity for somebody to go and buy it in person just pulls them away from coming to the Internet as much as they used to.” Read Cornwell on video content, white goods, and creative page optimization.
James Euinton, Account Director at The SEO Works: “Over the years, as Google improves its handling of language, it’s been more important to focus on the more specific, longer-tail phrases. Sometimes this may mean catering to specific questions and keywords that fall outside standard products and category pages. It’s important that we tailor additional content to these to target the customer at different points in the journey or funnel.” Read Euinton on moving the needle fast, Core Web Vitals, and business contexts.
Radu Marcusu, CEO at Upswing: “The biggest challenge this year was for marketing managers to explain the drops in the market and how to go about it. That’s why I would say it was more about us being proactive in communicating these shifts to our clients. They needed support in understanding the overall market trends and that it was a general change in demand – and, of course, in adapting to it. That also meant new tactics or focusing on specific actions. For instance, if Google now recommends refined searches, we make sure our clients have filters or categories targeting those searches. We also focus on having the right content to answer those searches. Or keep their Google My Business profiles optimized. In a nutshell, we were proactive in adapting strategies, budgets, and also specific actions implying Google changes.” Read Marcusu on differentiating through pitching, video searches, and developing internal tools.
Eli Schwartz, Growth Advisor and SEO Strategic Consultant: “Google and other search engines use deep learning to Strengthen search results for their users continuously. This past year, I have noticed that local results are triggered more often when Google detects a local intent. At the same time, on results where there should not have been local intent, I have seen the local results disappear.”
Marc Swann, Director of Search at Glass Digital: “There’s no doubt that retailers are feeling the pinch as consumers tighten their belts, and this presents risks for most marketing agencies when it comes to justifying the value of their services. SEO is a channel that is often more at risk when times are hard, and marketing budgets are scrutinized. SEO performance can ultimately be maintained in the short and even medium term without a recurring spend associated with it, unlike something like paid search where once ad spend stops, performance disappears. So certainly, justifying expenditure in SEO is something that we have seen requested more and not seeing it as a luxury in harder times. Ultimately, those that are able to fulfill their SEO strategies through the hard times will be in much stronger positions when the economy eventually turns positive.” Read Swan on multi-lingual sites, sports retailers, and “luxury” channels.
Steve Walker, Technical Director at Journey Further: “Measuring ROI has always been important, but it’s no longer a nice-to-have. Measuring ROI is essential. This is why performance monitoring tools like SEOmonitor are critical to your agency. The amount of in-house teams has also increased dramatically over the past few months. This is a great thing for the SEO industry and a testament to SEO’s importance in digital marketing – but it fundamentally changes how agencies need to operate. We’re no longer just additional resources doing basic SEO activity. We need to act in a similar way to a business consultancy and provide strategic-level support.” Read Walker on new user journeys, measuring impact, and funnel optimization.
Ben Austin, Founder & CEO at Absolute Digital Media: “We utilize forecasting for both pitching and upselling to ecommerce clients to showcase our understanding of the industry they compete in and the business. By doing so, we can more effectively dictate what is required to drive continuous growth to the business whilst highlighting the ongoing value our innovative SEO strategies provide. In addition to providing a basic forecast of the brand’s current market position, we supply further insight into the wider business benefits such as returning customers, revenue, and ROI.” Read Austin on business strategies, performing verticals in ecommerce, and dynamic URLs.
Charlie Norledge, Head of SEO Performance at Impression: “The pitches are much more competitive now because there are probably fewer clients going to market as things started to slow down a bit. We’ve had to make sure that we include innovative tactics in there. Like talking about how to utilize social media trends in organic when we talk about tech SEO, not just putting a list of fixes, making sure we have priority behind things and just giving them as much detail as possible.
Forecasting is another important piece. When we go to a competitive pitch, forecasting is, I’d say, required. If we didn’t do it, we could miss out. We were in pitches against other agencies, and because we had forecasts in place, we ended up winning the work.” Read Norledge on GPT-3 efficiency, reporting, and client expectations.
Kevin Gibbons, Founder and CEO at Re:signal: “For us, it’s important to have strong communication with our clients about where the priorities are and make sure that we know not just where the search demand is, but also the supply. Knowing what clients are focusing on – both in terms of seasonality and where the priorities could be and could be shifting because of those issues – helps us re-address what we’re doing.
I think everyone’s just probably a bit more price-conscious and cautious right now in terms of what they’re doing. So, again, that’s why ecommerce is such a strong sector for us. For the reason that you can track organic revenue performance. Everyone wants to make sure they’re maximizing their ROI.” Read Gibbons on internationalization and their ASICS success story.
It’s not just about one channel or one tactic, but ecommerce digital experts are looking more and more into how they can optimize the full user experience, coordinate PR and SEO efforts, and make sense of the whole industry landscape and where the opportunity lies:
Petar Jovetic, Organic Director at Impression: “Everything we do has to show value and be targeted. We’re baking innovation more and more into our proposition. It’s been quite compelling to leverage AI to handle higher workloads and then do it more efficiently. One other thing I’m hurry to explore is using our CRO department, especially at the bottom of the funnel where every user counts, to grow acquisition strategically with more A/B testing, multivariate testing, etc. We’re looking into how CRO and SEO can complement each other more. I think that is really appealing in the current economic climate. So we’re not just throwing additional users but nurturing them through the funnel to conversion.” Read Jovetic on SEO maturity frameworks and the State of Retail.
Charlie Clark, Account Director & Founder at Minty Digital: “I noticed more clients are looking to build their brand through digital PR, and we build their brand name rather than just focus on sales. Some of the bigger companies we work with used to allocate a separate budget to SEO, and that used to be the entire thing. Now they’re allocating separate budgets within their departments, one for SEO and one for PR. They’ll have their traditional PR, the standard press releases, but then they’ll also be tying in the digital aspect to that, which is something that’s been quite interesting to know.” Read Clark on entering new markets and campaign KPIs.
Heemesh Vara, Head of SEO at Semetrical: “Our keyword research process focuses on exploring the whole industry. That’s something different from other agencies. Where they might take a category-by-category approach and do it month by month, we do it the other way around. It’s a lot of work for us at the beginning, but it does provide the client and us with a complete picture of their entire industry. For example, we worked with a vintage furniture client with multiple types of products and categories, from sofas, stools, chairs, side tables, etc. So we had to research the entire industry all at once. And this is one of our unique selling propositions that we always put in the proposal as well.” Read Vara on SEO data analysis and baselines, stakeholder management, and securing budgets.
In the end, as our 15 interviews have shown, both ecommerce clients and markets continue to shift, so it’s critical to showcase sustainable results.
With all these challenges SEO experts face in mind, we continue to develop SEOmonitor so it helps you:
Seeing trouble ahead for consumer spending, Wolfe Research analyst Deepak Mathivanan on Wednesday turned cautious on both the e-commerce and online travel sectors, cutting his ratings on stocks in both groups.
Mathivanan changed his call on the e-commerce sector to Market Weight from Overweight. His view is that growth “is likely to show high sensitivity to retail sales and consumer spending trends during the macroeconomic slowdown in 2023.” Sales growth for many e-commerce companies benefited from inflationary tailwinds in 2022, he said, arguing that should be a less significant factor next year. Wall Street’s consensus calls on 2023 revenue and earnings are too high for many companies in the sector, he said.
Our parent company, Network N Media, is looking for an an experienced leader to coordinate all ecommerce output across all of our websites. Yes, that’s right – you could be responsible for all of the fancy buyers’ guides you see across PCGamesN, GearNuke, and all other owned-and-operated brands within Network N Media’s happy family. Working alongside a team of in-house writers and freelancers, the successful candidate will help to build and refine our ecommerce content using their expert knowledge of the best SEO and UX practices.
This is an exciting opportunity for an ambitious individual with extensive experience in ecommerce and online publishing to craft and deliver an all-new ecomm strategy across a prestigious portfolio of global brands, within a hungry and fast-growing media enterprise.
Create and manage all ecommerce output across Network N Media’s portfolio of owned websites. Build and work with a team of in-house writers and freelancers to research, write, commission, and optimise a suite of buyers guides and other ecommerce content that will help our readers make informed purchasing decisions. Work with the editorial teams to ensure that our buyers guides are backed by expert reviews, ensure that SEO and UX best practices are adhered to, and grow our ecommerce revenues against agreed targets.
Role: Ecommerce Managing Editor
Location: Fully remote (within UK only) or Hybrid (minimum expectation of one day per week in Bath head office)
Closing Date: Sunday 4th December 2022 (though we reserve the right to close this advert early if a sufficient number of applications have been received)
Type: Full-time, permanent
Person specification (skills, knowledge, and behaviours):
Reporting to: Publishing Director
Framework level: MGT4
If it sounds like you are the right fit, please apply via the Network N Careers hub with a covering letter, a relevant writing sample, and a CV.
Please also note that this role is based either in our offices in Bath on a hybrid contract (1-2 days a week in the office) or can be remote within the UK.
Network N celebrates and supports a diverse and inclusive work environment, and is proud to be an equal opportunity employer. It is important to us that our organisation is more diverse and encourages applications from people of all backgrounds and identities.
We want to make sure no one is put at a disadvantage during our recruitment process because of a disability, neurodivergent condition, and/or impairment. If you think you may benefit from some adjustments and support then just ask; we don’t want our hiring process to be a barrier for you. Our recruiters will work with you to learn more about your support needs and identify reasonable adjustments that will help you to be at your best and have a more personalised experience. Just drop us an email at [email protected] and we will be happy to help.
As part of our commitment of being a Disability Committed employer, disabled applicants who meet the essential criteria for a job vacancy will be offered an interview. To be considered under the Disability Confident Interview Scheme, applicants will need to tick the box in the Disability Confident Interview Scheme on the job application form.