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Extend the retail holiday season with 2-way proactive customer retention

5 minute read

According to Statista, Australians are expected to spend $66 billion during the pre-Christmas sales period, with NSW expected to spend $20.8 billion and Victoria $17.1 billion, about 32% of the shopping experiences contributing to those numbers will occur online.

In addition, according to Hans Andrew Consuegra, approximately 70% of online traffic will appear on mobile phones during the holiday period, with 60% of this traffic being eCommerce orders and 85% of sales occurring right before Christmas week.

For retailers, particularly those operating online, it presents a fantastic opportunity to extend the holiday period through a proactive customer retention strategy to re-engage those that only shop during the Christmas period online or those that create a loyalty value proposition that can drive repeat purchases and increased customer lifetime value.

Our customers at Pendula have proven that 2-way conversational SMS contributes significantly to increasing customer retention, loyalty, and value increasing revenue and driving efficiency within the retailer. It also drives a significantly greater opportunity than email to engage your customers.

SMS has a 98% open rate, with 90% of messages read within 3 minutes. Opening 2-way conversational SMS delivers our customers up to 45% response rates.


To extend the opportunity with your customer beyond the holiday season, here are our top 5 ways to drive long-term engagement beyond the holiday period.

  • Don’t just inform, engage
    Many retailers and online operators have recognised the value of SMS messaging as a tool to inform customers. The typical scenario is confirming a purchase, sending a receipt, or providing a shipping notification. All valuable interactions for the consumer but limited in terms of the value they deliver to the retailer. These notifications can easily be transformed into opportunities to engage the customer simply by opening the messaging channel for responses. I’m not talking about Press 1 for Yes or 2 for No.

    Enable your customers to converse with your brand, provide them with the opportunities to provide feedback, and deliver special offers that can be transacted directly from the SMS. Engage them into your brand story so they become advocates and loyal customers, enabling you to know better and service your customers.
  • Follow the customer journey
    In eCommerce, we understand that cart abandonment is a killer for revenue. One Retail report found that Australians have an exceptionally high tendency to abandon ship, with cart abandonment figures as high as 76%. This occurs for many reasons, poor experience, delays in processing orders and payments or the simple fact that the customer just changed their mind.

    However, capturing customer details early in a cycle can enable a retailer to engage in these types of scenarios proactively. A simple SMS: “Hey John, we noticed you left some items in your cart. Can we help you proceed with this order?” It is an opportunity to create a valuable interaction with your customer and potentially mitigate your business's cart abandonment challenges.

A woman happily reading text messages in her room
  • Make customers an offer they can’t refuse
    Your customer has just completed a purchase. They didn’t view or didn’t select anything from the “Customers Also Bought” recommendations. This does not mean your opportunity to upsell this customer is over. Leveraging 2-way SMS, you could make the same or a similar discounted offer to that customer just before or after they have completed their shopping experience.

    Leveraging Pendula and 2-way SMS, customers have achieved up to 22% conversion rates when presenting the customer with a personalised offer post transaction. This not only increases the average order size but demonstrates through personalisation an understanding of your customer and the things that might interest them based on a purchase or purchase history.
  • Give customers a right of reply
    Recommendations, word of mouth and reviews are the most compelling way to get new customers to experience your product. 2-Way SMS provides the easiest and fastest way for your customers to provide the type of feedback that will not only help you to sell but can also drive strategy and improvements that will increase the opportunity for your retail brand.

    Even before leveraging Pendula and SMS to engage, retain and sell to their customers, a large consumer goods provider initiated a campaign to get unsolicited feedback through a simple 1-line question, “Tell us what you think”. The responses in the first week were overwhelming and enabled them to shape the future sales strategy of the products they were offering with the knowledge of what would appeal to their customers.
  • Be consistent, be respectful
    It’s important to be mindful of how you leverage SMS as a channel to retain your customers proactively. You are not opening a new channel for constantly spamming your customer base so that they become equally frustrated with your SMS messages as they have been with your email messages. It is a channel to deliver high-value, well-crafted, personalised messages that will drive engagement. Messages that you can send with a very high level of confidence they will be opened, read and, if the case, responded to, providing you as a brand the opportunity to differentiate yourself from the competition.

    It is equally important that you build trust with your customers so they understand your use of SMS and what they should and should not expect, avoid sending links and avoid asking for Personally Identifiable Information (PII). For existing customers, an initial message of advice has worked well with our customers. For new customers, a similar approach, albeit worded a little differently. Customers must also have the right to opt-out, and properly configured SMS can support your opt-out requirements across all digital channels.

2-way conversational SMS as a channel to retain your customer proactively presents a unique opportunity to engage across the digital channels they interact with daily. Beyond just retention, it provides the opportunity to know your customer better, to upsell and cross-sell, and to inform. In return, it offers your customer the opportunity to engage and provide feedback during every moment of truth in their journey with you as a brand of choice.

References:

Hans Andre Consuegra, RedSearch. (2022, November 30). Christmas online shopping statistics Australia [Blog post]. Retrieved from https://www.redsearch.com.au/resources/christmas-online-shopping-statistics-australia

Statista Research Department. (2022, December 8). Forecasted retail spending during pre-Christmas sales in Australia in 2022, by state. Retrieved from https://www.statista.com/statistics/1342083/australia-pre-christmas-sales-spending-forecast-by-state/#:~:text=In%202022%2C%20Australian%20shoppers%20are,around%2020%20billion%20Australian%20dollars

Victoria Galloway, Bambora. (unknown). 5 ways to reduce shopping cart abandonment [Blog post]. Retrieved from https://www.bambora.com/en/au/news/5-ways-to-reduce-shopping-cart-abandonment

Rick Lanman

Strategic Sales Director

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Summary

According to Statista, Australians are expected to spend $66 billion during the pre-Christmas sales period, with NSW expected to spend $20.8 billion and Victoria $17.1 billion, about 32% of the shopping experiences contributing to those numbers will occur online.

In addition, according to Hans Andrew Consuegra, approximately 70% of online traffic will appear on mobile phones during the holiday period, with 60% of this traffic being eCommerce orders and 85% of sales occurring right before Christmas week.

For retailers, particularly those operating online, it presents a fantastic opportunity to extend the holiday period through a proactive customer retention strategy to re-engage those that only shop during the Christmas period online or those that create a loyalty value proposition that can drive repeat purchases and increased customer lifetime value.

Our customers at Pendula have proven that 2-way conversational SMS contributes significantly to increasing customer retention, loyalty, and value increasing revenue and driving efficiency within the retailer. It also drives a significantly greater opportunity than email to engage your customers.

SMS has a 98% open rate, with 90% of messages read within 3 minutes. Opening 2-way conversational SMS delivers our customers up to 45% response rates.


To extend the opportunity with your customer beyond the holiday season, here are our top 5 ways to drive long-term engagement beyond the holiday period.

  • Don’t just inform, engage
    Many retailers and online operators have recognised the value of SMS messaging as a tool to inform customers. The typical scenario is confirming a purchase, sending a receipt, or providing a shipping notification. All valuable interactions for the consumer but limited in terms of the value they deliver to the retailer. These notifications can easily be transformed into opportunities to engage the customer simply by opening the messaging channel for responses. I’m not talking about Press 1 for Yes or 2 for No.

    Enable your customers to converse with your brand, provide them with the opportunities to provide feedback, and deliver special offers that can be transacted directly from the SMS. Engage them into your brand story so they become advocates and loyal customers, enabling you to know better and service your customers.
  • Follow the customer journey
    In eCommerce, we understand that cart abandonment is a killer for revenue. One Retail report found that Australians have an exceptionally high tendency to abandon ship, with cart abandonment figures as high as 76%. This occurs for many reasons, poor experience, delays in processing orders and payments or the simple fact that the customer just changed their mind.

    However, capturing customer details early in a cycle can enable a retailer to engage in these types of scenarios proactively. A simple SMS: “Hey John, we noticed you left some items in your cart. Can we help you proceed with this order?” It is an opportunity to create a valuable interaction with your customer and potentially mitigate your business's cart abandonment challenges.

A woman happily reading text messages in her room
  • Make customers an offer they can’t refuse
    Your customer has just completed a purchase. They didn’t view or didn’t select anything from the “Customers Also Bought” recommendations. This does not mean your opportunity to upsell this customer is over. Leveraging 2-way SMS, you could make the same or a similar discounted offer to that customer just before or after they have completed their shopping experience.

    Leveraging Pendula and 2-way SMS, customers have achieved up to 22% conversion rates when presenting the customer with a personalised offer post transaction. This not only increases the average order size but demonstrates through personalisation an understanding of your customer and the things that might interest them based on a purchase or purchase history.
  • Give customers a right of reply
    Recommendations, word of mouth and reviews are the most compelling way to get new customers to experience your product. 2-Way SMS provides the easiest and fastest way for your customers to provide the type of feedback that will not only help you to sell but can also drive strategy and improvements that will increase the opportunity for your retail brand.

    Even before leveraging Pendula and SMS to engage, retain and sell to their customers, a large consumer goods provider initiated a campaign to get unsolicited feedback through a simple 1-line question, “Tell us what you think”. The responses in the first week were overwhelming and enabled them to shape the future sales strategy of the products they were offering with the knowledge of what would appeal to their customers.
  • Be consistent, be respectful
    It’s important to be mindful of how you leverage SMS as a channel to retain your customers proactively. You are not opening a new channel for constantly spamming your customer base so that they become equally frustrated with your SMS messages as they have been with your email messages. It is a channel to deliver high-value, well-crafted, personalised messages that will drive engagement. Messages that you can send with a very high level of confidence they will be opened, read and, if the case, responded to, providing you as a brand the opportunity to differentiate yourself from the competition.

    It is equally important that you build trust with your customers so they understand your use of SMS and what they should and should not expect, avoid sending links and avoid asking for Personally Identifiable Information (PII). For existing customers, an initial message of advice has worked well with our customers. For new customers, a similar approach, albeit worded a little differently. Customers must also have the right to opt-out, and properly configured SMS can support your opt-out requirements across all digital channels.

2-way conversational SMS as a channel to retain your customer proactively presents a unique opportunity to engage across the digital channels they interact with daily. Beyond just retention, it provides the opportunity to know your customer better, to upsell and cross-sell, and to inform. In return, it offers your customer the opportunity to engage and provide feedback during every moment of truth in their journey with you as a brand of choice.

References:

Hans Andre Consuegra, RedSearch. (2022, November 30). Christmas online shopping statistics Australia [Blog post]. Retrieved from https://www.redsearch.com.au/resources/christmas-online-shopping-statistics-australia

Statista Research Department. (2022, December 8). Forecasted retail spending during pre-Christmas sales in Australia in 2022, by state. Retrieved from https://www.statista.com/statistics/1342083/australia-pre-christmas-sales-spending-forecast-by-state/#:~:text=In%202022%2C%20Australian%20shoppers%20are,around%2020%20billion%20Australian%20dollars

Victoria Galloway, Bambora. (unknown). 5 ways to reduce shopping cart abandonment [Blog post]. Retrieved from https://www.bambora.com/en/au/news/5-ways-to-reduce-shopping-cart-abandonment

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