Fail-safe e-commerce strategies for consumer brands in uncertain times.
When Amazon released its Second Quarter Results, a concerning shadow crossed the desks of e-commerce leaders across the globe. A growth rate of 27% marked Amazon’s slowest quarter since the pandemic began. Q2 revenues totaling $113bn, albeit healthy, fell short of forecast. And there is more to come; Amazon expects revenue growth to slow further (to 10-16%) in Q3.
Is this a bellwether for online retail? Could a growth plateau be on the horizon?
I’m going to share with you some of the strategies we think will help brands remain on track to meet ambitious targets as we head towards 2022, but first, let’s take a look at the wider market.
Double-digit growth – was it too good to last? The future of e-Commerce after Covid-19
Although e-commerce leaders might proceed with more caution when it comes to forecasting e-commerce growth in 2022, there is no question the pandemic changed the course of e-commerce last year. This report from Globaldata shows that nine out of 10 of the world’s leading e-retailers and marketplaces enjoyed double-digit growth in revenues in 2020. Amazon, Alibaba, Wayfair, Coupang, and Pinduoduo exceeded 30% revenue growth while JD, Wayfair, eBay, and Zalando reported triple-digit profits.
And we were right to get excited - McKinsey reported 10 years of growth in e-commerce penetration in the US in a period of just 90 days during 2020.
“From trial to habit”
Following this sea change, some trends are here to stay, without question. Research from eMarketer predicts US online grocery sales will surpass $100bn in 2021 as shoppers move “from trial to habit”. After all, the convenience of online shopping is an experience you can’t unlive.
The Bricks Meet Clicks/Mercatus online grocery survey carried out in June 2021, reveals that delivery and pickup alone captured $5.3bn in sales – more than three-quarters of total online grocery sales for the month. It’s frictionless, it’s convenient, why not?
So what does the future hold for e-commerce after the pandemic?
In spite of Amazon’s Q2 results, Prime Day 2021 sold in excess of 250 million products. Amazon claimed that shoppers “bought more and saved more” than at any previous Prime Day event. Amazon’s advertising income soared by 87% vs 2020 as brands invested more. Out of all possible outcomes, e-commerce is least likely to decline.
Another positive indicator, Shopify's Q2 results show revenues up 57% YoY. It predicts continued growth, although at a lower rate than in 2020, as independents continue to transition to online retail in line with shopper expectations. However, McKinsey's report on the future of online grocery in Europe spells out concern among leaders in the category:
“nearly half of CEOs expect that the market situation will worsen in 2021 and remain highly uncertain. Just 26 percent anticipate that the situation will improve. The words CEOs most commonly associate with their expectations for 2021 are “challenging,” “uncertain,” “price-focused,” “competitive,” and “online””.
With all this in mind, how do we navigate our best growth route through the choppy waters that may lie ahead?
Fail-safe e-commerce strategies to overcome the uncertainties ahead
One thing is for certain, if the market isn’t growing as fast as you’ve predicted, you will need to focus on increasing your share. To remain competitive, you will need to work harder to achieve advantages, stay focused on the barriers and triggers, and allow technologies to help. You will also have to look through the shop window from the street to make the shopper experience as good as it can be. Let’s start with some internal housekeeping…
Allow the data to help you make actual, informed decisions
Good information will be critical to your success so your data will need to be in good shape. No matter how much data you gather, it holds little value unless it can be processed in a way that helps you to make good decisions, fast. Identify your key metrics, set targets, and allow your e-commerce analytics to tell you when you are veering off course. Better still, train your platform to prioritize your actions based on business value.
It helps to also give your data specific use cases. For example, how can digital shelf analytics help distribution, marketing, assortment or pricing decisions? What information is of most value to others? When we need to take risks, are we able to test and swiftly adapt? Spending time today defining how your analytics are structured (who sees what information, when and why) will help the whole team move forward in a unified way tomorrow.
Be as profitable as you can be
Advanced analytics are here to help you achieve more with less effort. Make sure that you are utilizing the technologies available to maximize profitability. Think about the workflows you could improve internally and ways in which technology and shared information could help you collaborate with customers and suppliers. Bear in mind that the three leading sales drivers continue to be convenience, price, and availability. This should give you a clue about where to start. Some ideas to consider…
- Arming KAMs with analysis that helps them negotiate better outcomes with their customers such as recurring stock problems or pricing issues.
- Improving the supply chain by monitoring distribution gaps or low stock levels.
- Reducing waste in your iMedia budget. Is your plan in line with good stock levels or retailer promotions, and has it been implemented correctly?
Invest in a rich brand experience and execute your Perfect Store strategy consistently
Assuming your house is in order, it’s time to look at your digital shelf through the lens of the shopper and get your Perfect Store in shape. The Perfect Store concept in e-commerce simply means the set of merchandizing standards that your product must meet to optimize sales on the digital shelf. As you would support your product in-store, you should also support it online: How many items are in stock? Are they visible? Are they in the right aisle (categorized correctly) and findable (through search)? What’s the price and are they being promoted? Lastly, how do they appear?
This time last year, Google tracked changes in shopper behavior that can be directly attributed to the pandemic and made recommendations on how consumer brands should respond. One observation that resonates more than ever today is that shoppers are becoming increasingly channel-agnostic, so brands ought to double down on omnichannel strategies.
It’s going to be vital to focus on two things:
- continually seek more channels (sell everywhere that you can) and, with that in mind,
- ensure that your brand tells a compelling and consistent narrative on every digital shelf (and on every device).
To achieve this, you will need:
- a logical and automated way of identifying potential new sales channels
- a rich content strategy that turns brands into sales
- a mechanism for making sure your content appears as it should in every e-store
Content is the area that offers you most control over your Perfect Store implementation and it’s a great place to start when it comes to creating that rich brand experience that converts browsers to buyers: it should be a priority. If you can, integrate your content management platform or PIM with your Digital Shelf monitoring process. It will be a real game-changer. You should be able to:
- create your best content to each e-retailer specification
- organize it
- syndicate it
- monitor it
- then allow the system to automatically close gaps and inconsistencies or update.
You will remove so many tedious processes, improve your content implementation and free up so much time.
Essential Tools for e-Commerce Success
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If we can help you with e-commerce strategy planning, end-to-end content management, or performance measurement please drop us a line at firstname.lastname@example.org