Home IMJ Features Opinion: How to Make the Big Jump to eCommerce

Opinion: How to Make the Big Jump to eCommerce

With more companies and brands embracing eCommerce and digital transformation, Louise Mulvey, eCommerce Director with Core, outlines the three key areas marketers should focus on to succeed in the future world of commerce.

2020 changed e-commerce forever. As movements were restricted nationwide, consumers moved online in significant numbers. We witnessed more growth in the first eight weeks of the pandemic than we had seen in the previous 10 years. Online as a percentage of retail sales increased from 3.5% to 15.3% during this period . It is worth highlighting that this data excludes any products that were purchased on international sites outside Ireland, as these are currently not tracked by the Central Statistics Office. Industry estimates suggest that 50 – 70% of online sales in Ireland are going overseas and not included in this number .

A key beneficiary of this increase is the logistics sector. An Post parcel volumes reached record weekly levels of 3.3 million in December 2020, a 230% increase year-on-year . DPD also saw record annual growth of 51% . In the run up to Christmas, spending on Irish websites increased by 135%, accounting for 39% of all online spending, according to financial technology company Revolut. Worth noting too that An Post said 50% of all parcels delivered during this period were from Irish retailers.

This growth was expected, but the sudden shift last year has put more focus on this industry, with numerous concerns impacting retailers and consumers nationwide. These include the potential ‘death’ or long-term disruption to the ‘bricks and mortar’ store. For example, in the early stages of the pandemic, many major brands decided to close up shop, including Cath Kidston, Monsoon and Urban Decay. Post-pandemic, the high street will look very different.

Another concern for consumers is the sudden increase in packaging waste from online retailers. Repak, a business-led compliance scheme licensed to fund the recovery and recycling of packaging on behalf of Irish producers, claims that online packaging waste has increased by 2,953 tonnes (25%) since 2019; this is the equivalent of 15 million standard size parcels . A key concern is that overseas retailers, who are generating packaging waste, are not contributing to Ireland’s recycling cost.

Lastly, and most significant, is Amazon. The retail tech giant is rumoured to be in discussions regarding the setting up of an Irish ‘fulfilment centre’ at the Mountpark logistics centre in West Dublin to cater for its growing business in Ireland. This would also help reduce the impact of customs charges post-Brexit.

Amazon recently announced record-breaking global revenues of $125.6 billion in Q4 of 2020 . In Ireland, the number of transactions on the site trebled over the Christmas period compared to 2019. Now, with the potential of a local fulfilment centre on the way, the real benefits of Amazon will be realised, pushing more people onto the platform. Like other markets, this will further impact the high street and local retailers as they struggle to match Amazon’s market-leading end-to-end service.

What follows are three key areas marketers should focus on:

Diversify your advertising mix to combat rising costs.
As more and more brands migrate their businesses online, increased competition is causing inflation for many of the online advertising platforms. In certain verticals within Google’s search platform, supply and demand issues are causing inflation. Across the social platforms, we are slowly nearing the ‘peak ad load’ stage. Basically, they are running out of places to put ads, meaning costs for advertisers can only go one way. Take YouTube for example; two to three years ago, a user only had to watch or skip one ad per video. Today, depending on the content the viewer is watching, there could be three or more ads before the video begins to play.

Over the last 12 months we have seen significant developments across all digital platforms, especially when it comes to shoppable media; these include inventory on retailers’ websites, on social media and display advertising. Shoppable media shorten the shopping journey by enabling consumers to make a purchase directly from advertising formats, aiding a stronger conversion rate as you deep-link the customer closer to the point of sale.

Diversifying your traffic mix and maximising new opportunities should be a key factor in 2021 planning. Experimenting with new and evolving shopping ad formats such as the latest features developed across TikTok, Pinterest and Snapchat will allow you to identify growth areas that your peer set are missing or slower to respond to.

Focus on the end-to-end experience
In the rush to move online, many elements of the consumer journey have been compromised. These can include site UX, brand searchability, poor fulfilment resourcing or a lack of GDPR strategy. In the short term, due to the sudden increase in online spending, the impact of these failings might not be visible. But in the medium term, the importance of these factors will become more apparent, particularly as competition heats up.

As shoppable media evolves, so will customer expectations. Tech giants such as Amazon, Facebook and Google increasingly raise the bar as they evolve their platforms to meet the ever-changing customer requirements. Leveraging real-time data signals such as onsite engagement metrics provides a deeper understanding of how users are navigating and interacting with the platform. Harnessing data insight is immensely powerful as it allows these platforms to enhance the end-to-end experience, providing better customer journeys to keep the user on the platform for longer periods of time.
Advertisers who focus on driving traffic through media investment, but neglect the end-to-end customer experience, will frustrate, and disappoint, consumers while also running the risk of losing ‘earned traffic’ to their competitors.

When a company consistently delivers a valuable and high-quality experience, it remains resilient in consumers’ minds, thus aiding retention and life-time value. With this in mind, there’s no surprise that 64% of CMOs claim to prioritise ‘improving the customer onsite experience’ in a bid to address the shift to ecommerce .

Invest in research studying the new path to purchase
With lockdown restrictions easing and many stores re-opening, the challenge for brands will be to respond to the new landscape with a clear omnichannel approach that enhances ecommerce sales as well as contributing to bricks and mortar success.

While developments in technology have unlocked many opportunities to grow new customers, it has also brought complexities and challenges in understanding the path to purchase. The way in which a user interacts with brands has become a lot more fragmented, making it increasingly difficult to pinpoint and measure performance. This includes understanding the relationship across the digital and physical store environment, i.e. how a user engages with an advertiser’s online presence and the impact this has on the advertiser’s physical store.

The key challenge for advertisers will be to keep a user-centric approach at the forefront of their research and to move away from short-sighted reporting such as ‘last-touch’ conversion measurement. Instead, focus more attention on how customers discover and engage with your products and the subsequent sales journey.
Understanding the various attribution models will allow advertisers to assign value to the media channels that influence the sale, thus moving away from solely crediting the last touch point that triggered the sale.

Investing in research methodologies such as econometrics and attribution studies will help brands to understand the path to purchase and the value of each media channel in contributing to the sale.

What next?
The extended Covid restrictions will inevitably lock in some ecommerce behaviour, which will cause ongoing impact to high street footfall. Expect stores to become like showrooms and streets to contain more ‘click and collect’ centres. Whatever the future may hold, we know that it has forever changed the commerce landscape.

Louise Mulvey is director of eCommerce at Core. To read more of Core’s Outlook 2021 click Here

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