5 Best Tactics to Improve Customer Engagement in Online Retail

how to engage customers in online retail

How Nogin can help you grow your ecommerce business.

Eggs are $10 a carton, gas is $5 a gallon and the price of a box of Cheez-Its has skyrocketed. Inflation and rumors of recession bubble just below the surface. 

It only takes a quick scroll through the news or a five-minute trip to the grocery store to see the signs of tough times ahead for the US economy. But despite the dark clouds looming, Americans are still reaching into their pockets to spend.

The Commerce Department reported that personal spending rose by almost 2% at the beginning of 2023. Economists attributed this spike to strong job growth and rising wages, plus leftover savings from stimulus payments during the pandemic. 

But these upward trends weren’t long-lasting, and spending has already begun to decline. Mckinsey reports that more than one in five consumers are expecting the US economy to take a downturn followed by long-term economic struggles. 

Still, research suggests that today’s consumers are still willing to splurge in certain categories, including health and wellness, technology and experiences. 

The already-fierce competition among ecommerce retailers is ramping up. How can you stand out from the crowd and convince your target audience that spending their hard-earned dollars on your site is a worthy investment?

Read on for insight into current consumer trends, and how Nogin can help you keep growing and making money regardless of economic conditions. 

Consumer Spending Slowdown

As 2022 wound to a close, recession rumors ran rampant in the US. However, according to results from a Mckinsey US Consumer Pulse Survey, almost a third of respondents were optimistic about the country’s economic conditions in the first part of 2023, as compared to one fourth in June 2022.

Still, many consumers have begun to fear that a recession would lead to long-term economic struggle, or at least a recovery period of 6 months to a year. 

Between February and March of this year, consumer spending dropped by 1%, Forbes reports. US consumers are tired of feeling the effects of inflation — since March 2022, the all-items index has increased by 5%. Shelter and food prices have both risen by more than 8%. 

With new mortgages garnering higher interest rates, consumers are more cautious about where they’re spending their extra income. The Census Bureau reported a drop in spending across several categories including fashion, furniture, tech and home improvement. 

With all of these stats in mind, plus rising wages, interest rates and higher cost of goods, it’s not surprising that the retail industry is facing its most challenging year since the pandemic. 

But there is hope ahead for those of us who are willing to play the game.

Urge to Splurge — and Opportunities for Ecommerce

ecommerce opportunities for D2C brands

Despite general economic uncertainty and spending slowdowns, there’s one demographic who’s more likely to make a “splurge” purchase in 2023 — young adults, or Gen Z and Millenials.

Of higher-income millennials, 70% say they’re willing to make a splurge purchase this year (McKinsey & Company, 2023). 

Companies who can find a way to market to this demographic will already be one step ahead. 

But there’s also evidence that ecommerce retailers are in a better position than traditional retailers like department stores.

Nonstore sales like curbside pick-up, ecommerce and sales through social media made up 16.5% of total retail sales, as compared to only 11.9% in 2019. 

Part of the shift to online and curbside shopping can be attributed to the pandemic. But the digital shopping experience also allows customers the opportunity to shop around and compare different products based on price, reviews and other important factors.

On the flipside, the shift to online shopping isn’t just a win for consumers — it’s a win for retailers, too. With the omnichannel approach, you have more opportunities than ever to personalize the shopping experience and make a case to your customers that spending their hard-earned dollars on your business is worth it. 

The 5 Best Customer Engagement Strategies for Ecommerce

In spite of the unpredictable economic road that lies ahead, ecommerce companies can still see growth over the next few years if they make a few key strategic moves. Here are just a few strategies you can use to grab — and keep — consumers’ attention even when they’re pinching pennies.

customer engagement strategies for ecommerce

1. Focus on Value

The truth is, with rising costs of labor and goods straining your wallet as a retailer, you might not be in the position to offer competitive prices. Instead, focus your messaging on the value you provide to your customers. Emphasize the quality of your products in addition to excellent customer service and a personalized buying experience that will set you apart from your competitors. 

2. Leverage All Available Channels

We’ve written before about why an omnichannel approach is essential to growth as an ecommerce business.

But this becomes especially true in the midst of economic struggle. 

Ecommerce retailers who get creative in the face of inflation are the ones who will ultimately outlast the hardships caused by it. 

Social media is one tool that you can use to your advantage — find a Gen-Z friend (or family member) and create a company TikTok that links to back to sales on your site. Link to products on your Instagram story, and host giveaways for followers.

Keep in mind that you should be presenting the same brand voice and imaging across all your platforms. Brands who have a more cohesive image are easier to recognize and more likely to keep customers coming back. 

3. Adapt Pricing Strategies

Let’s say you’ve crunched the numbers, and you don’t want to lower your prices, but you’re worried the price point of your product could drive customers away. There’s still room to adapt your pricing strategies to entice potential clients without compromising your pricing structure.

Maybe you implement financing options or installment plans that spread out the cost of products over time. If it’s applicable to your product offering, you could also explore a subscription model. Maybe you offer bundles or packages that allow the customer to save money while purchasing several items at a time, or a loyalty program that rewards them for spending more at your business.

Whatever strategy you choose to take on, you don’t need to change your prices to keep increasing your revenue and conversions. 

4. Provide Educational Resources

During periods of inflation, your customers might be more hesitant to spend “just because.” They’re looking to be convinced that the items you’re selling are really going to give them the bang for their buck. 

Rise to the challenge by providing educational resources to help them understand why your product is worth it.

If you sell apparel, offer your customers information about the sustainability of your products. Consumers are increasingly aware of the impact of their purchases on the environment — share about your materials, production processes and sustainability initiatives. 

You could also document a material’s journey from plant to shirt, or the story of one of your employees. More than ever, consumers want to know that they’re making responsible and ethical purchases. With a little bit of storytelling, you can use this drive to support responsible clothing production to your advantage. 

You could also offer styling tips for different clothing items, sizing guides or care instructions. When your customers know they’re already getting value from you with no investment from them, it’s easier to take the leap and make an actual purchase.

 5. Personalization is Critical

Maybe you feel like despite your company’s investments in marketing, money has gotten you nowhere in terms of actual conversions.

Once your customers get to your site, are you giving them a one-size-fits-all experience? It’s not about how much you market, it’s about who you’re marketing to. 

Data is a powerful tool in personalizing the buyer experience, streamlining brick-and-mortar and digital buying so that each customer receives relevant recommendations for future purchases. 

For example — you’d never want to recommend a frozen meat subscription box to a sworn vegetarian. Especially with the wealth of tools available today for keeping track of individual customer data, knowing how to personalize the shopping experience is crucial for staying competitive with other ecommerce brands. Whether you utilize FOMO messaging, location-based targeting, or customer segmentation, personalization strategies will assist you in driving more conversions and increasing customer retention.

Get Started on All of the Above — at No Upfront Cost to You

enterprise ecommerce solution for D2C brands

Here at Nogin, we understand the importance of staying competitive, especially in a tighter economy.

Our enterprise ecommerce solution can help you keep growing and making money regardless of economic conditions. While traditional SaaS leaves you with a messy patchwork of apps that may or may not integrate, Nogin is an all-in-one solution for your brand’s:

. . . And more! 

Best of all, it’s easy (and free) to get started. There are no upfront costs for our services, and our Nogin nerds are here to support you every step of the way.

P.S. Interested in setting up an informative, no-pressure call to learn how Nogin can help you? Schedule a convo today! 


Customer Engagement in eCommerce FAQ

What is customer engagement in ecommerce? 

Customer engagement in ecommerce refers to the interaction and relationship between a brand and its customers through various touchpoints. It aims to create meaningful experiences that foster loyalty, increase sales, and encourage customers to return.

What strategies can increase customer engagement? 

Strategies to increase customer engagement include personalized marketing, providing exceptional customer service, leveraging social media, creating loyalty programs, offering valuable content, and utilizing data analytics to understand and meet customer needs.

What are the three pillars of customer engagement? 

The three pillars of customer engagement are personalization, communication, and value. Personalization ensures tailored experiences, communication builds trust and rapport, and value delivers meaningful benefits to customers.

What are the four levels of customer engagement? 

The four levels of customer engagement are:

  1. Awareness – Customers know about your brand.
  2. Consideration – Customers are evaluating your products.
  3. Purchase – Customers buy your products.
  4. Loyalty – Customers repeatedly purchase and advocate for your brand.

How do you deliver customer engagement? 

Deliver customer engagement by creating personalized experiences, maintaining consistent communication, offering excellent customer service, providing relevant and valuable content, and utilizing data to anticipate and meet customer needs.

What is the client engagement process? 

The client engagement process involves attracting potential customers, converting them into buyers, retaining them through exceptional experiences, and encouraging them to become loyal advocates for your brand.

How do you determine customer engagement? 

Customer engagement is determined by tracking metrics such as website traffic, time spent on site, click-through rates, social media interactions, email open rates, purchase frequency, and customer feedback.

What is a customer engagement model? 

A customer engagement model outlines the methods and strategies a business uses to interact with customers throughout their journey. It includes tactics for attracting, converting, retaining, and nurturing customers to build long-term relationships.

What are the two types of customer engagement? 

The two types of customer engagement are:

  1. Behavioral engagement – Actions customers take, such as purchases, clicks, and social media interactions.
  2. Emotional engagement – The feelings and attitudes customers have toward a brand, reflected in loyalty and advocacy.

What is the goal of customer engagement? 

The goal of customer engagement is to build strong, lasting relationships with customers that increase loyalty, enhance customer satisfaction, drive repeat purchases, and ultimately boost revenue and brand advocacy.

Free Guide: 6 Strategies for Effective Personalization

Learn how to craft an ideal experience for your customers by using AI-powered customer segmentation, algorithmic merchandising, smart promotions, and more.