30-second summary:
In our recent Marketing Innovation Forum, ClickZ focused on ecommerce transformation and what retailers can learn from the challenges of 2020.
The two-panel session looks at the impact that COVID has had on ecommerce and the current state of ecommerce transformation.
Panelists discuss trends in ecommerce including the rapid shift consumers have made to purchasing all categories of goods online, the need for agility and speed in today’s ever-changing retail environment, and the importance of building community around your brand, among other things.
We end with a list of key trends and recommendations from our luminaries. The entire event, Marketing Innovation Forum: Ecommerce Transformation, is available on demand from ClickZ.
In our recent Marketing Innovation Forum, ClickZ focused on ecommerce transformation, an extremely topical subject given the rapid shift to online shopping in 2020. The two-panel session looks at COVID’s impact on ecommerce and the current state of ecommerce transformation.
We asked some of the biggest brands in ecommerce to share their experience, data, and insight about trend with the goal of helping you best position your business for success in 2021. Our partners for this forum include Capgemini, Fila, eBay, BigCommerce, Shopify, Amazon, and Burrow.
A permanent shift from physical to online purchasing
According to IBM, department store sales were down 25% in the first quarter of 2020 and 75% in the second quarter. On both sides of the Atlantic, brick and mortar retail department stores are closing, including iconic brands like Brooks Brothers and J.C. Penney.
But the pivot to digital commerce has also created opportunities for retailers to flourish. In the same report, IBM predicts that ecommerce is projected to grow by nearly 20%.
Image Source: TechCrunch
There are some early indicators that this shift to digital shopping will linger once the pandemic is over. A report by Paysafe found that 30% of consumers plan to do more online shopping even after the lockdown.
Scott Kelliher, Head of Brand Ads & Partnerships at eBay has seen the shift from in-store to online shopping firsthand. In his role at eBay, Kelliher works with over a million small businesses and has helped them pivot rapidly to online shopping.
“We saw that consumers immediately shifted their online buying habits with roughly 75% of our consumers at eBay buying more items online,” explains Kelliher. “Almost 85% of them plan to keep this new higher level of ecommerce spend for the foreseeable future.”
Agility and speed are critical
The ability to be agile and pivot operations, messaging, and sales from offline to digital channels has been critical for brands. Capgemini’s work with FILA focused on helping the sportswear manufacturer accelerate their digital roadmap.
“With FILA, our focus was on making sure that we could get their programs out and enhance their customer experience more quickly. This enabled them to move fast and be very agile as they shifted from a brick-and-mortar strategy to a direct-to-consumer channel online,” explains Jennifer Conklin, Capgemini’s Lead of Unified Digital Commerce.
Before COVID, many brands relied on a third party for their relationships with consumers, but they can now speak directly to their customers and buyers.
“The tone in our marketing communications with consumers has changed,” says Dawn Trenson, VP of Ecommerce at FILA. “It’s taken a more familiar tone in emails and subject lines. It’s not as broad strokes as it was in 2019.”
Shopify has seen this same rapid shift in brands moving from offline to online channels, with all types of businesses from small organizations to big brands and CPGs adapting incredibly quickly.
“One thing we saw at Shopify was that direct-to-consumer brands were immediately pivoting to online only, even if they had retail locations,” explains Hana Abaza of Shopify.
“They were closing down their retail locations, adjusting their marketing, looking at how to diversify their products, and focusing on social and community initiatives.”
Curiosity, adaptability and community
Curiosity is one of the most important skills ecommerce professionals need to succeed in 2020 and beyond. That means asking questions so that you can pivot your strategy quickly.
Asking questions like “How do we get the products back online?” and “How do we pivot from a brick-and-mortar channel to a digital channel?” were questions that emerged in the early months of the pandemic.
“Now that we’re here, we should be asking ourselves how we can keep our team engaged, thinking about what’s next and, harnessing that creative manpower to imagine what’s possible,” says Conklin.
Says Abaza, “COVID impacted different industries in different ways, but the ones that were really successful built a community around their brands and around their products. They were really responsive to their customers’ needs.”
Curiosity, adaptability, and community all lead back to delivering exceptional customer experience. A community is a two-way street—delivering insights from customers that enables you to engage with them, create good content, and form real relationships that endure during times of uncertainty.
Embracing new ecommerce opportunities
The digital selling environment presents many new opportunities for retailers to engage with customers and leverage ecommerce opportunities.
Amazon’s Director of Brand Programs & Selling Partner Development, Mike Miller, emphasizes the importance of nailing the basics when it comes to selling purely in a marketplace.
Miller, who has worked at Amazon’s for a decade, notes that even their most successful sellers aren’t taking full advantage of the different opportunities available to optimize sales.
“Even for this successful group, about a half haven’t run a deal in the last year or are missing rich context,” says Miller. “About a third of them have suboptimal listing quality and a fifth of them don’t have keywords on their products pages.”
Meghan Stabler, VP of Global Product Marketing and Communications at BigCommerce, notes that some of these challenges are unique to the marketplace setting.
One of the values you get with an ecommerce platform like BigCommerce is the ability to include all the variants and product information that you need.
“There are multiple marketplaces out there for retailers to choose from,” explains Stabler, “This includes going direct-to-consumer with a platform like BigCommerce. You don’t have to be a large organization or a programmer to have really strong SEO, marketing, integrated shipping, and website design.”
Alex Kubo of Burrow, a custom furniture manufacturer, speaks to ecommerce opportunities from a brand perspective.
Says Kubo, “If you start at the top of the funnel, there’s an incredible opportunity to experiment because CPMs are low right now. You can test new features and messaging strategies with new demographics that are being forced to shop online for the first time.”
Kubo suggests that brands experiment with price changes, discounting, and ways to take the retail experience online.
“I don’t mean just opening up your ecommerce channel for your brand,” explains Kubo, “Take that retail experience and bring it online. “Rather than lay people off, we took our retail staff and brought them online as remote design consultants which actually increased sales volume.”
The future (or not) of bricks and mortar
The good news for bricks-and-mortar retailers is that there is a future and it’s going to be about delivering good experiences and embracing an omnichannel offline/online approach.
Says Stabler, “Our merchants are building experiences in augmented reality or 3D into their virtual shopping experiences—like using your phone to see that appliance in your kitchen. Retailers and brands need to blend online and offline experiences to get people back into the stores.”
Miller agrees that blended online and offline experiences are the wave of the future for stores that have traditionally had a physical presence.
“Amazon 4 Star is an interesting example of this where what we’re seeing is a collection of 4 Star and above-rated products all in one store. It’s the result the different ratings and experiences of a large collective of online customers who’ve had a great experience with these products.”
“Main Street will continue to play a significant role in commerce, especially for highly considered purchases like furniture,” says Kubo.
“We don’t have to look at our retail stores as being profitable on their own. What can do is look at the direct sales that they’re doing in store and measure the aura effect—how they lift ecommerce activity within a certain geographic radius of the store. Ecommerce also gives us access to data and information, but a physical location allows us to understand and observe the habits and behaviors of people in store.”
The purchasing trends they are a-changing
As more people turned to buying items online across multiple categories, purchasing trends naturally shifted throughout the year in response to rapidly changing needs, motivations, and environmental factors.
Here are some of the ecommerce and shopping trends noted by the experts:
From eBay:
We saw a 50% increase in the number of people who started holiday shopping before September 30.
We’ve also seen a significant increase in the number of people who are looking for more traditional holiday gifting.
Gifting is more thoughtful in that consumers are going into some of the more unique areas within eBay to find what they want and get the right gift for the someone.
From Shopify:
Shopify’s recently released Future of Commerce report found that over 50% of shoppers are ready, willing, and able to shop new brands and small/local businesses more than they have before. This is likely a trend that will continue.
Contactless payments increased by 122% in 2020.
Across Shopify, we’ve seen over 50% of consumers getting more items through local delivery.
A larger percentage of consumers are using like BOPIS (buy online, pick up in store) and curbside pickup.
From Capgemini:
The omnichannel approach with commerce has become more important. Successful retailers will need to adopt a cross-delivery approach, breaking down the silos between traditional and digital commerce.
Brands, manufacturers, and retailers are servicing their customers regardless of where they are. Your strategy must encompass a plan to meet consumer needs whether they’re in home at lockdown, in a store, or doing curbside pickup with safety measures.
Communication is more important than ever. You need to look at your communication plan and make sure that from the marketing communication down through shipping and delivery your consumer feels supported and cared for along the way.
From Amazon:
At Amazon, brands are selling directly to customers. They’re listing, developing, and controlling directly what they’re doing on the platform. What we’re seeing as a result is an explosion of the number of brands.
More brands mean the ability to target more micro segments.
Using a tool called Manage Your Experiments, brand owners on Amazon are able to run statistically significant experiments and understand what is resonating with their customers.
From Burrow:
Vertical integration is an unstoppable trend. It’s a direct-to-consumer approach that that allows a brand to learn so much about their customer.
Customer centricity is an important trend—put the customer first as you’re making decisions, launching initiatives, building your product roadmap, and understanding the unique challenges that your customer is facing.
Personalization and channel integration will continue to address some of the challenges we’re facing.
From BigCommerce:
We’ve seen a lot of CPG companies launch stores very quickly so that they can promote what’s been traditionally an offline purchase (e.g., toothpaste, shaving cream, etc.) and build communities around the brand.
You’ve got to build your community by adding in other technologies like subscriptions, SMS texting, or user generated content from people that are using your brand in real world experiences.
Merchants should focus on personalization as they prepare for 2021. Personalization shouldn’t just be at the top of the funnel when you’re trying to acquire a customer, but must integrated on your website so you’re personalizing the checkout experience, recommendations, and promotions.
The muscle memory of consumers has changed because of COVID. Their expectations are extremely high. Wwe need to match those expectations with the experiences that we bring.
The entire two-hour event, Marketing Innovation Forum: Ecommerce Transformation, will be available on demand on ClickZ. Details to follow soon.
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