Estimates by eMarketer predict global e-commerce sales will reach $4 trillion in 2020, as the industry continues to gain share of consumer spending globally. Yet, despite the lucrative revenue opportunity, advances in technology and increasing consumer expectations threaten to burst the retail bubble for brands who are unprepared.
In today’s connected commerce environment, many brands are struggling to keep their heads above water. Options for consumers are now infinite and technology has undoubtedly brought brands and consumers closer together thanks to the proliferation of mobile devices. However, the flip side of this ‘always-on’ economy is that consumers now expect instant gratification for all their retail wants and needs.
Wherever you look in the world, ecommerce is thriving. Asia is the fastest growing region for retail, as Forrester anticipates China will become the first country to hit $1 trillion in online retail sales by 2020. India’s retail market is expected to double in the next five years, representing a significant new growth opportunity. Moving West, the US and UK are respectively providing substantial contributions to the global retail sector.
With so much choice, so much competition and so much consumer pressure, how can retailers remain competitive and thrive in today’s connected commerce era? Ahead of Catalyst Europe 2017, our annual event taking place in Manchester on May 16, where branded manufacturers and retailers can stay informed about the future of ecommerce, we have compiled a sneak peek of the five major factors to take on board to rise above the competition.
1. Cultivate your brand
Retailers often ask themselves how they can make the jump and become a brand. Unfortunately, there is no shortcut to achieving true ‘brand’ status. To help effectively cultivate your brand, product quality must be optimum, with competitive pricing and flawless customer service. Of course bringing something different to the market would put your brand in an ideal position, and it’s best to stay true to your ethos to build a name and reputation.
Building your brand is only the first step. It is then crucial to protect your brand, its reputation and network. Amazon is thoroughly seeking to nurture its relationship with brands, to ensure customers can trust that they will receive the products they expect. Using brand registry on Amazon helps retailers list their products on the marketplace to exert more control over listings, including brand gating to protect intellectual property.
2. Go where your customers are
In 2016, an estimated 1.47 billion smartphones were shipped according to analyst firm IDC. That’s almost six times the number of computers. In 2016, and for the first time in history, we saw the majority of retail orders taking place on mobile. Despite these compelling statistics, a great number of retailers are still thinking desktop and websites first. If most of your customers are shopping through mobile devices, it makes sense to adopt a mobile-first strategy. This means more than only having a mobile-responsive website, but instead implementing a multifaceted strategy that incorporates marketplaces.
If you haven’t sold on Amazon or eBay previously because of brand concerns, it may be time to re-evaluate your situation. Both marketplaces represent considerable consumer bases, high traffic, tremendous user experiences and could be a significant source of diversification for your business. When it comes to Amazon specifically, retailers can no longer afford to turn a blind eye. Most searches for products online now start with the marketplace giant. Engage intelligently with marketplaces in order to exploit new opportunities for reach, fulfilment and visibility. Don’t forget, a tailored marketplace strategy – whether it’s for eBay, Amazon or the hundreds of other channels around the world that tap into various consumer segments – helps pave a path to the mobile consumer.
3. Up your advertising game
You may have a solid brand, and know where and how your consumers prefer to interact with you. But how do you get your message out? Advertising is now as critical as ever in a sector that is rife with choice.
We’ve seen substantial growth among our customers through channels like Google and Bing when it comes to product advertising. Amazon itself is fast becoming a viable platform for advertisers looking to influence consumers at the point of purchase, with Sponsored Product Ads and Headline Search Ads.
Social media – namely platforms such as Facebook, Instagram and Pinterest – has been gaining traction for some time when it comes to connecting advertisers directly to consumers. Facebook and Instagram Dynamic Product Ads are still a very efficient way to profit from the sheer reach and personalisation of social channels. These ads target your shoppers based on their previous interactions with specific products on your website. As these adverts are driven by product data feeds, they can serve as an additional touch point as well as an opportunity for post-purchase upsell of similar products or related goods.
4. Use drop shipping for speed and variety
Drop shipping is a critical e-commerce strategy employed by many larger online retailers, as it enables them to focus on their core assortment while employing a low risk/low investment ‘endless aisle’ strategy to carry more products and categories. By enabling drop shippers to sell directly on their sites, retailers can effectively extend their selection of goods, therefore increasing overall basket size and reducing the chances of shoppers jumping ship to a competitor.
Retailers looking to add drop shipping into the mix may need to improve their logistics, however. While having more selection in your category can help attract customers and build visibility, the ability to deliver quickly and reliably on customer demand is also crucial to ensuring a great shopping experience.
5. Make fulfilment a priority
At our Catalyst event last year, we predicted that 2016 would be shaped by five major forces. One of these major forces was logistics – the ability to actually deliver what the customer is buying. For many brands today, this means partnering with a company that can help you meet consumer expectations without delay or hiccups.
As Marc Lore, president and CEO of retail giant Walmart said, two-day delivery is now “table stakes”. Make sure you don’t gamble with your brand’s reputation and consumer loyalty. Look at options such as Fulfilment by Amazon or FedEx Fulfilment Services to help get goods shipped to shoppers on time. Whichever third party you choose to help you improve fulfilment, remember that while two-day delivery might be the current norm, shipping trends may soon evolve into one-day and same day as consumer expectations call for instant ecommerce, whenever they want and wherever they are. Prepare now to avoid consumer disappointment as the retail landscape picks up pace.
Mentioned in this piece…