The e-commerce healthcare industry continues its rapid growth, but it presents brands with a substantial challenge: converting traffic into purchasers. According to research by the Baymard Institute, the average cart abandonment rate for online shopping carts is just about 70 percent.
However, in the e-commerce healthcare market, the inability to convert traffic into purchasers is exacerbated by the fact that consumers tend to conduct additional due diligence on medical products prior to purchasing than consumers do of other types of products.
In addition, digital health adoption continues to be on the rise. According to research done by McKinsey, telehealth usage has now stabilised at a level of nearly 38 times of its original level, which shows how comfortable consumers are using digital channels to access their health needs.
This shift has created a growing ecosystem of digital healthcare platforms, including:
- Online pharmacies
- Telemedicine platforms
- Medical device ecommerce stores
- Wellness and supplement marketplaces
These platforms make healthcare products and services more accessible while allowing customers to compare products, read reviews, and purchase treatments from the comfort of their homes via email marketing.
The evolution of e-commerce within the healthcare sector is due to the advances made in developing digital infrastructures, adoption of telemedicine services, and the increasing demand for convenience from consumers.
In research on e-commerce in healthcare, describe how e-commerce is providing healthcare businesses (including hospitals/clinics, pharmacies, and other retail medical providers) access to digital platforms where they can provide consumers with streamlined purchasing processes and delivery options.
In addition, brands in the healthcare service sector have different types of conversion challenges than those in standard ecommerce. When purchasing healthcare supplies and equipment, consumers are generally more risk averse than traditional ecommerce consumer and require a great deal of reassurance regarding product safety; this involves being provided evidence of authenticity, as well as having multiple options to compare prior to making a purchase.
To address these challenges, healthcare ecommerce businesses are beginning to utilize AI based marketing and conversion optimization strategies.
Below are five tried and true AI based strategies used by healthcare ecommerce businesses to enhance their conversion rates, and a few practical examples that ecommerce business owners can implement immediately.
The Importance of Conversion Optimization in Healthcare Ecommerce
When compared to conventional retail ecommerce, ecommerce in the healthcare sector has dramatic differences. Consumers tend to perform a large amount of research prior to making a purchase of a healthcare product, including:
- Researching product information.
- Reading product reviews from customers and experts.
- Reviewing products to find comparable products.
- Reviewing products for trust signals and approvals/certifications.
- Asking safety & effectiveness questions.
The amount of time that these consumer behaviours creates a longer, more complex customer buying journey and is a cause for cart abandonment at a high rate.
Ecommerce platforms that focus on healthcare provide a comparable amount of products & services (prescription medications, vitamins and supplements, medical devices, diagnostic tests, telemedicine consultations) of all categories of products and services that are not in the normal retail ecommerce. The nature of the customer funnel creates higher complexity/effort in how customers will engage in the purchasing process so businesses need to focus heavily on enhancing the user experience and reducing friction during the purchase process.
Artificial intelligence can help to solve many of the issues presented with at least three (3) solutions to meet the challenges: analysing consumer buying behaviours; personalising the customer experience and automating marketing touch points.
We will cover the three (3) AI driven strategies being used by healthcare ecommerce brands today to increase conversion rates.
1. AI-Powered Product Recommendations
When consumers buy products on an ecommerce site that are in the healthcare sector, they will typically review multiple products before finalising a purchase. AI driven recommendation engines allow ecommerce brands to present product information in the simplest manner to enhance the buying decision.
AI recommendation systems use multiple data signals or dimensions to analyse and recommend products to a consumer. Some of the common product dimensions AI systems will assess to recommend products include the following:
- The consumer’s browsing behavior
- Purchase behaviour
- Search queries
- Categories of products that were viewed by the consumer
- Demographics of the consumer
Once the AI systems have processed the various data signals, they will then provide recommendations of products to the consumer based on the relevant features of the product for the consumer.
For example, if a consumer is browsing for vitamin D, the system may provide a recommendation for:
- Calcium
- Bone Health packages
- Immune Support Packages
Providing this level of personalisation allows the consumer to find relevant options quickly and therefore lessens the effort needed for the consumer to search for appropriate products.
Amazon’s eCommerce revenue is primarily driven through its product recommendation systems. Roughly 35% of that overall revenue is derived from these systems, according to a McKinsey research perspective.
There are some practical tactics that can be used to implement such a system on an eCommerce website like healthcare eCommerce sites.
Recommendation widgets can be added to each of the following areas of an eCommerce website:
- A customer’s product page
- In a customer’s cart
- At checkout
- In post-purchase emails
One possible example of using a recommendation system may involve a customer who abandons a cart. The abandoned cart recovery email should include recommendations that are directly related to the products in their cart.
Overall, well-executed product recommendations using AI can increase both a retailer’s conversion rate, as well as the average order value.
2. Abandoned Cart Recovery Driven by AI
Lost revenue is caused by a retailer’s abandoned cart situations.
Many customers who abandon their carts do so for a number of reasons:
- Uncertainty about whether or not the product will work
- Not sure of the proper dosage
- Worried about safety
- In certain cases, the cost of shipping exceeds their expectation
- If they don’t want to continue checking out after they abscond from their cart
AI-based cart recovery tools that use customer behavior analysis can provide timely reminders to customers via a variety of communication channels.
Those reminders can be sent via:
- Automated SMS
- Push notification
Example Abandoned Cart Recovery Sequence
1 Hour after abandonment
A highlight of product benefits through email.
8 Hours after abandonment
A short cart recovery SMS message directing to a quick checkout of the product.
24 hours after abandonment
An email educating the customer about the product’s features, benefits, usages & ingredients.
Recent statistics from Statista suggest that this type of automated cart recovery campaign can yield 10% to 20% recoveries from abandoned carts, which would rank that as one of the highest returning marketing strategies available for eCommerce retailers.
In addition to that, by providing customer reviews, safety certifications, or ingredient information, eCommerce retailers can further increase the likelihood that a customer using a recovery message will purchase the product.
3. Predictive Replenishment Campaigns
For many healthcare ecommerce items, they are products that consumers use up regularly; as a result, consumers will repeat their purchases often.
Some of the most common products that customers will need to repeat purchase from their healthcare ecommerce site include:
- Vitamins/Supplements
- Protein Products
- Prescription Medicines
- Skincare Products
- Medical Supplies
Utilizing AI to analyze customer purchasing patterns will help an ecommerce site identify when a customer is likely to run out of a consumable and therefore can send timely reminders to customers to reorder.
For example, if a customer purchases a 30-day supply of probiotics from a healthcare ecommerce site, then the website’s system may provide an automated reminder to the customer around the 25th day that they may be running low on their probiotics and need to reorder.
Example Email Message:
“Your probiotics may be running low. Reorder today to stay on your wellness plan.”
Furthermore, according to research from Deloitte, there is evidence suggesting that companies using AI to personalize their service are seeing an increase in their marketing conversion rates by as much as 20%.
The use of predictive replenishment campaigns therefore not only increases the conversion rate of healthcare ecommerce sites but also enables the ecommerce site to establish long-term loyal customer relationships.
4. AI Chatbots to Answer Pre-Purchase Questions
Healthcare consumers tend to have more questions prior to making their purchases than a typical eCommerce consumer.
Some examples of the type of questions a healthcare ecommerce customer would ask include:
- Is this safe for me and my condition?
- How much should I take?
- Which product will help me to sleep the best?
- Will this product interact with other medications I am taking?
If a customer cannot quickly get answers to their questions, then they will often leave the ecommerce site’s website before completing their purchase.
AI chatbots can provide customers with instant help by answering questions as they occur.
Current AI chatbots have multiple uses. They can:
- Answer common questions that customers may have about products
- Offer recommended products
- Provide clients with educational materials about their products
- Guide clients to items in the company’s product assortment
According to the consulting firm Gartner Group, AI-enabled customer service technologies will be used to manage up to 80% of digital commerce customer interaction.
For healthcare eCommerce platforms, chatbots may also help users locate various resources helpful to them including dosage guides, safety instructions, and comparison pages for different products.
By answering questions quickly and taking some of the ambiguity away from someone’s decision-making process, chatbots can help create more confidence and therefore increase conversions.
5. AI Customer Segmentation for Lifecycle Marketing
There are many differences in how healthcare eCommerce clients behave.
Some clients buy vitamins once a month while others will buy only when they are trying to solve a specific health issue.
AI customer segmentation enables companies to categorize their user base by understanding customer/product interactions and the amount of time that each customer engages.
Standard categories for segmentation include:
New Customers
They will need educational content and messaging that establishes trust in the company’s product(s) to purchase the company’s product(s).
Repeat Customers
They respond favorably based upon reminders that their product(s) need to be refilled and product subscription offers.
High-Value Customers
They will benefit from bundling product(s) together and loyalty programs.
Inactive Customers
To reactivate inactive customers, the company should provide content and special offers that encourage them to return to purchase their product(s).
Once clients have been segmented by AI algorithms, businesses can create targeted lifecycle marketing campaigns.
For example, the brand of probiotics may have a 4-step e-mail series:
- A welcome e-mail (whereby the customer receives healthy gut information).
- E-mail containing the “How to Use the Probiotic” after purchasing the product.
- E-mail sent to clients to remind them to reorder.
- E-mail containing other products clients may also be interested in.
Segmented marketing campaigns outperform generic marketing campaigns by a considerable level.
Research conducted by Campaign Monitor shows that segmented e-mails produce up to 760% additional revenue than non-segmented e-mails.
For healthcare eCommerce businesses, segmentation provides relevant, educational, and personalized information that results in increased conversion rates and increased loyalty from customers.
Key Points for eCommerce Businesses Selling Healthcare Products
Continue to see significant growth within the healthcare eCommerce world, although businesses will need to have a greater understanding of customer behavior for businesses to improve their conversion rates.
The most successful businesses implement AI in marketing that guide customers through the purchasing process.
Key strategies for marketing automation include:
- AI enabled product recommendation systems
- Automated abandoned cart recovery processes
- Predictive reorder campaigns
- AI chatbots
- Behavioral segmentation of users
By utilizing these strategies, marketing campaigns are more personalized and seamless, which builds up the level of trust customers have with their products from a particular healthcare eCommerce business.
Conclusion
The healthcare eCommerce world is changing the way patients find access to the products and services that they require.
As the digital healthcare market continues to develop, companies that utilize AI-driven customer experience strategies to assist clients will have a much greater probability of increasing conversions and fostering long-term relationships with customers.
For eCommerce companies that provide sales of healthcare products to consumers, the key to future growth is to bring together personalization, automating, and delivering trustworthy experiences throughout the entire customer experience lifecycle.
