How to sell more with your e-shop? How to build customer loyalty? These are questions that many traditional retailers are asking themselves when customers are converting massively to e-commerce. In this article, we present a system developed by Nespresso and strangely forgotten by conventional retailers. Yet, it makes customer loyalty a driving force for business growth.
80% of the purchases we make in supermarkets are recurring purchases. Charles Duhigg explains in his book “The power of habit” that a buying habit is acquired from the 7th purchase on average. In other words, if a customer buys an item 7 times, this purchase is likely to become recurrent. He will therefore obey an unconscious decisional dynamic. He will mechanically buy this product at each of his visits.
If you find this presentation incredible, ask yourself about your habits. Do you always go to the supermarket on the same day? Do you almost always buy the same products?
The system of recurrent orders set up by Nespresso
Nespresso has understood this principle and is not short of innovation when it comes to advancing its e-commerce. Recurring orders have been an obsession for Nespresso for several years now. For example, we remember the Prodigio connected machine launched by Nespresso in 2016, making it possible to automatically order capsules or the subscription offer launched in 2019. This time it’s a more discreet but very ingenious system that I would like to tell you about.
Nespresso has long since made its e-shop the focal point for placing orders. An order established by the online customer costs much less than an order placed by phone. When you order online, you can now automate your future orders.
An option allows you to transform the order you have just placed into a recurring order with a single click. This feature is a stroke of genius. It’s the equivalent of Amazon’s single-click order.
This simple system makes the most of the recurring nature of coffee capsule orders. Also, as I explained in another article, it eliminates competition and defends market share. Indeed, if you repeatedly order from Nespresso, you no longer need to worry about buying competing capsules. The launch of the Vertuo machine, whose capsules are protected by a patent, responds to the same problem: you have to “lock” the customer into a system whose remuneration is based on the sale of capsules more expensive than those of the competition.
How to reap the benefits of customer loyalty in e-commerce
As great as the system sounds, it’s impressive that traditional retailer e-shops miss out on this feature. Yet supermarket shopping is the perfect use case to implement such a system. Not only are recurring purchases the norm, but they are often made on the same day of the week.
The retailer could push the system’s accuracy to the point of predicting when to propose which product. In this way, the consumer would be assured that he will never be short of anything.
The added value would be twofold:
- for the customer: no more need to worry about buying recurring products, no more “emergency shopping” at the corner grocery store for forgotten products
- for the retailer: better inventory and cash flow forecasting, increased customer loyalty
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Posted in Innovation.