Most people assume that running an online store is quite easy and financially rewarding. We won’t say that they are wrong considering the value of global eCommerce retail sales shown below.
Figure 1. Value of eCommerce Retail (2014 – 2026)
However, they do overlook more than 95% of stores that are struggling to stay afloat. While eCommerce is booming, not everyone online store is making a sizeable profit. What people need to understand is that running an online store is quite challenging. There are numerous costs that need to be managed.
Secondly, you are competing with thousands of online stores simultaneously. For example, there are around 24 million online stores worldwide. The actual number would be much higher in our opinion when we consider stores that are not registered with the relevant authorities.
If you are selling gym apparel, you are competing with roughly 1000+ stores. With international shipping no more a hassle, a customer in USA can buy a gym apparel from China. It means that an online gym apparel store in US is competing with other stores in the US and those in China.
One can very well imagine how hard it would be to run such a store. Given the high competition, online store owners need to come up with novel ways to stay ahead. They can try and compete on quality. Naturally, people opt for items that offer better quality. The problem is that quality is replicable.
A competitor can easily start offering the same quality as you. It would undermine your unique selling point. Another way to beat the competition is through the choice of eCommerce platform. Of course, some platforms are better than others. For instance, Magento (now Adobe Commerce) is the preferred choice for most online stores.
Third is to increase the marketing spend and target the audience on multiple channels. There are other much easier ways to beat the competition. One such way is through the use of eye-catching product labels. This article delves into how product labels for Magento 2 increase conversions and boost website engagement.
Importance of Eye-Catching Labels in E-Commerce – Increase Conversion and Website Engagement
Whether it is product labels for Magento 2 or any other platform, they serve the same purpose. As said earlier, customers have too much choice nowadays due to the increasing competition. It can be quite challenging to grab their attention. With eye-catching labels, eCommerce store owners can grab visitor attention and compel them to take the desired action. Let’s discuss how:
1. Create Urgency
What’s the best way to compel a user to complete a desired action? Suppose you want users to buy a desired product. How will you convince them to buy the specific product and that too from your store? The simplest way to do is by creating a sense of urgency. When users know that they must complete an action within a limited period, they cannot keep putting off their decision.
They will either complete the purchase or opt out of it. How can an eCommerce store create a sense of urgency? There are several ways to do it. Let’s go through them with the help of examples. Look at the below picture.
Users can save $150 if they complete the purchase within 20 hours, 25 minutes, and 32 seconds. If they fail to complete the purchase within this time, they will have to pay the full amount. Undoubtedly, the offer is too good to ignore. Users will not only be compelled to complete the purchase themselves, but they will also share it with friends and family. It is how the strategic use of labels can enhance conversions and engagement.
Similarly, Amazon uses labels like ‘Limited Time Deal’ to create urgency.
2. Communicate Information That Aligns With Individual Beliefs and Values
Another benefit of labels is that it can help create valuable information that aligns with the individual values of the target audience. For example, research shows that individuals are making eco-friendly choices. They expect businesses to do the same. Thus, sustainability is an important factor when making a purchase decision. This is reflected below.
As the above figure confirms, 40 per cent of the respondents have chosen brands that have sustainable practices and values. Of course, no consumer has the time to read the entire product description in detail. Thus, even if you are offering eco-friendly products, they would not know about it. This can undermine your conversion and engagement.
The below figure shows how Amazon uses labels to target such consumers.
The use of ‘Climate Pledge Friendly’ labels shows that the product is sustainable and consumers who value sustainable practices can buy it without any worry. When clicking on the drop-down button, Amazon provides additional information to convince prospective buyers.
This information is not a rubber stamp. Instead, it is verified.
Best Buy uses similar techniques as shown below.
Similarly, eCommerce store owners can create labels based on any individual beliefs and values.
3. Labels Promote Upselling and Cross Selling
Due to the high competition, the best way to maintain or enhance your market share is through upselling and cross selling. Upselling is convincing customers to buy a higher end product than the one they are contemplating purchasing. On the other hand, cross selling is about asking customers to buy products that are related to their original purchase.
For instance, if someone is buying a mobile phone, upselling means asking them to purchase a 256 GB variant rather than 128 GB. Cross selling means asking them to buy a phone charger, earphones, or a phone case. Both are crucial for the success of an eCommerce store. Even well-established eCommerce stores use this practice which highlights its importance.
The below picture shows this technique in practice.
When users click on a product and scroll down, Walmart shows a list of products under the label ‘Customers also considered’. This allows Walmart to send customers from one product to the other. This increases website engagement and improves conversion rates. The use of additional labels such as ‘Clearance’ and ‘Reduced Price’ further create a sense of urgency.
Amazon uses a different label, but the purpose remains the same.
Every eCommerce store uses this strategy. Now, let’s consider how eCommerce stores upsell.
In the above picture, the customer has selected the first product. Amazon now provides a comparison with other products. As can be seen, the prices for the rest of the products are much higher. It is how stores can convince customers to buy a higher value product.
Conclusion
This concludes our article on eye-catching labels can increase conversions and website engagement. Of course, labels provide numerous other benefits such as building trust and highlighting social proof. Whatever the purpose, they ultimately increase conversions and website engagement.
However, adding labels is only the first step. Store owners must identify the right colour scheme, font, and placement to realise the maximum benefits. If a label is incorrectly placed or the font size is illegible, it can undermine user experience. Resultantly, website engagement and conversions will go down.