fbpx
Growth of eCommerce Post-Lockdown

Growth of eCommerce Post-Lockdown

Lockdown measures have forced shoppers to stay at home and turn to online stores for the goods they need. This drastic shift in shopping has the potential to change the sector permanently, leaving big opportunities for retailers who get the right strategy in place.

Has COVID-19 Affected eCommerce Bottom Lines?

For many eCommerce brands, lockdown hasn’t affected their bottom line too much. In fact, in some cases, it has even increased.

But is this shift temporary or are we looking at a new landscape for eCommerce in the future?

At the start of lockdown, many brick and mortar stores rushed to get their goods online after they were forced to shut their physical doors by government decree, but is this enough?

Will this new spotlight on eCommerce stay now that lockdown measures have been eased? Or will brands have to create a new reality in order to grow their stores and tap into the changing behaviours of their loyal customers?

With this in mind, let’s take a look at the new strategies eCommerce brands are having to put in place to continue to serve as well as the opportunities they should be latching on to.

The Changes in Consumer Behaviour

COVID-19 has forced a change in consumer priorities. The need to stay in and stay safe has overridden trivial consumer needs of the past, like the desire to have the latest products and a new wardrobe for every season.

Safety is now more important than shopping – and for good reason. But this doesn’t mean the end of consumerism as we know it; ecommerce brands simply need to mix up their approach to tie into these new priorities.

This means finding ways to serve customers that align with their current needs whilst keeping supply chains intact at the same time (this is particularly true for non-essential sellers that may have seen a drop in sales).

In a survey commissioned by global commerce services company PFS, it was revealed that three in five consumers (60%) have purchased more goods since the lockdown began than they did before. On top of this, 53% have upped the amount of shopping they do online with the majority of consumers dramatically reducing the amount of physical stores they go to.

The survey explored the new shopping habits of consumers and their changing buying behaviour, but it also looked into their expectations from brands during this time. Unsurprisingly, consumers wanted brands to be sympathetic to the current climate, tone down brash marketing, and be flexible in their approach.

Which eCommerce Brands Will Be Most Affected?

PFS’s study also dug into the success rates of different eCommerce sectors.

While some sellers experienced a wave of higher sales (19% of consumers understandably reported buying more healthcare items and 25% bought more home, garden, and DIY products online), others saw sales flop.

A quarter of consumers claimed their clothes buying habits had significantly decreased – with 53% claiming they’re spending less on fashion because they’re not going out – and 18% said they’ve bought fewer cosmetic items and luxury goods.

This is reflected in the sales numbers of high street stores and luxury retailers. H&M reported a 57% drop in sales between 1st March and 6th May and Hugo Boss noted a definite decline in sales. The exemption seems to be independent fashion retailers who have seemingly bucked the trend, with many managing to keep sales fairly buoyant during lockdown.

eCommerce brands that appear to be thriving during the pandemic include stores that sell home and garden products, gifts and accessories, health and fitness products, and food and drink.

The dramatic increase in order volume for home and garden goods. Source.

This is no real surprise – gyms are shut, forcing fitness-conscious consumers to workout from home, the work-from-home rule has seen more people invest in their homes and gardens, and the number of supermarkets that sell out their delivery slots every single week shows the surge in people that are food shopping online.

However, this doesn’t mean that other brands are falling significantly behind. As sales begin to pick up again across the board, non-essential sellers can breathe a sigh of relief. The only problem is, they’re probably now sitting on stock that needs to go.

Where Are the Opportunities for Ecommerce Growth Post-Lockdown?

There are plenty of ecommerce providers paving the way post-lockdown. Zalando, Europe’s biggest online-only fashion retailer, reported an 11% uptick in sales – a new record high for the brand that’s set to increase even more.

But what are the companies that are succeeding doing right?

Digital Transformation

Zalando is first and foremost an online business. It started online, it remained online, and it thrived during lockdown. Unlike bricks and mortar stores that rushed to get their businesses on the internet pre-lockdown, Zalando has had plenty of time to create digital customer experiences that are enjoyable.

 

The eCommerce brands that will succeed post-COVID use past data to optimise the shopping process from start to finish.

This use of digital tools and software to create slick funnels and user-friendly shopping experiences was starting to gain traction before lockdown, but it’s now more important than ever to create real connections with customers who are stuck at home and unable to shop in the ways they are used to.

Adoption of Mobile Shopping

Stuck-at-home consumers are shocked by how much their screen time has increased during lockdown.

With not much else to do and the whole world at their fingertips, many have upped the amount of time they spend on their phones, using them to do everything from communicating with friends and family (this report shows a 45% increase in WhatsApp usage) to online shopping.

Brands that are able to incorporate mobile into the sales cycle will be able to tap into this growing pool of consumers who are shopping online via their phones.

Connect More Commerce Touchpoints

Even before lockdown was enforced, the large number of commerce brands taking their stores online has increased the competition. With more online stores than ever, capturing the attention of potential customers has become increasingly difficult.

As a result, brands that are growth-minded are having to incorporate more touch points along the buying journey to retain the dwindling attention of buyers. This includes features like chatbots that can provide auto responses to commonly asked questions, eliminating the chance of a consumer losing interest and going elsewhere.

Adding touch points throughout the journey keeps buyer engagement levels high and gives ecommerce brands an edge.

A Strategic Focus on Traffic From Key Areas

The most successful eCommerce brands know where their audiences hang out. Instead of spreading themselves thin and trying to attract buyers from every online hotspot they can think of, they identify their key traffic sources and optimise them.

Take clothing brand Barbour, for example. They’ve found a market for their product on Instagram and have optimised their strategy on the platform to increase store traffic by 98% and Instagram-fueled sales by 42%.

Finding key traffic sources and strategically optimising them is an effective way to lean into what works and, ultimately, catapult growth.

The Future of eCommerce Post-Lockdown

Right now, the future of eCommerce is in flex. We’re not fully out of lockdown yet and there are regularly new measures being put in place.

What we do know is that eCommerce brands that are doing well during these strange times are working hard to align themselves with changing consumer needs, as well as turning to key strategies that are hyper-focused and necessary in the wake of increasing competition.

John Coyne
19th June 2020

The 7 Steps To International eCommerce Success

The 7 Steps To International eCommerce Success

International eCommerce is booming. With cross-border shopping growing rapidly across the globe, demand in our nearest markets shows no signs of slowing down. European B2C market growth is running at an impressive 14% every year, while Southern Europe just hit a phenomenal 25%, according to eCommerce Europe. This is a cracking growth opportunity for any e-tailer. So why aren’t more businesses cashing in on rampant overseas demand?

Global Dominance: Breaking into the US Market

Global Dominance: Breaking into the US Market

5 MIN READ
In 2018 total ecommerce sales across the US were worth over 500 billion dollars. And the growth does not stop there. By the year 2022 the US ecommerce market is forecast to be worth a staggering 700 billion dollars¹.

For many UK based ecommerce businesses, cracking the nut of the US can feel like a huge undertaking. With the right focus, however, getting a share of the American pie can be a great first step on the road to international expansion.

1. Planning is Key

The US market might feel familiar to UK businesses, but don’t be tripped up thinking that what works for your UK customers will work across the pond.

 

1. Investigate the traction of your product through Google Trends and your own analytics. If you are already seeing some sales in the US, use your own data to drive conclusions around which products are appealing.

2. Be aware of who operates in your space within the US and what they are doing well.

3. Set a strategy. Examine trends from any existing customers within the US. If sessions to site are high, but your conversion is low, focussing on service and pricing could be key. Conversely, if your website converting well but few customers are coming across your brand, your focus should be on marketing. Even without existing customer data, setting a strategy around the key points of interest will help you measure progress and focus your efforts and spending in the right area.

TOP TAKEAWAY: Do your research and set a focussed strategy from which you can benchmark success

2. Service First

The single most important factor to consider before expanding into the US is service.

 

1. US customers expect delivery services to match what they could expect from US based companies.

2. Don’t attempt to offer next day delivery as the costs far outweigh the benefits. The sheer size of the US means that next day delivery is not always an option even for US based sellers.

3. Focus efforts instead on offering free delivery to your US customers. If this is impossible within your current profit margins, introduce a delivery threshold, or even think about increasing prices to offset the delivery costs.

4. Be reliable. A large consideration for customers ordering from a non-US country is a lack of trust. Build trust in your business by monitoring delivery times, making sure promises are kept, keeping track of ratings, and ensuring customer service is great.

TOP TAKEAWAY: Ensure service is as good as or better than the local competition

3. Payments

 

1. Traditional credit and debit card payments continue to dominate in the US, although PayPal also accounts for a significant minority. Ensure your business caters for the main payment cards, including specifically American Express.

2. Over the past 5 years, digital wallets have also gained significant traction across the US, a trend that shows no sign of slowing down with the rise of the mobile consumer. Integrating with Apple Wallets, Android Wallets and Samsung Wallets will put any business ahead of the curve.

TOP TAKEAWAY: The future is in e-wallets. Get ahead of the curve by focussing on this now

4. Marketing

To break into the US market, understanding how each channel differs from the UK and leveraging their strengths will underpin success.

1. Affiliate marketing, whilst costly, is a huge business in the USA. Use this channel to drive brand awareness and new customer growth, and focus on a strong CRM strategy to keep these customers coming back. Remember most affiliates only charge on conversion, so any additional traffic to site or later conversions are free.

2. Paid marketing through PPC can be expensive, especially when the average cost per clicks in the US market sit at around 13% higher than in the UK². However, while CPC is high, conversion rates through PPC in the USA are generally better. Be sure to push products which are high value, have generous profit margins and are appealing to US customers to keep this channel profitable.

3. Finally, building a strong CRM strategy is the quickest, and cheapest, way to grow traffic to your site. Segment the emails you send, so that your US customers are targeted with the most appealing products and offers. Keep a seasonal promotional tracker so you can hit key shopping days in the US with strong exclusive promotions.

 

Do not lose site of your initial KPIs. If traffic is already good, but bounce rate and conversion are performing badly focus your time on these areas before a huge marketing drive.

IN A NUTSHELL: Be prepared to spend to get the traction you need to grow

5. American Context through Content

Providing the same payment methods and delivery options as US-based competitors will go a long way in gaining traction with US customers. To take this further develop the functionality to provide US currency and even bespoke content.

1. First, develop a currency dropdown selector where users can choose to switch to dollars.

2. Second, expand on this and automatically choose the currency based on IP Address – you should either tell your customers that this has happened or offer an easy way to switch back.

3. Third, create an international pricing structure whereby base pricing can be adjusted by territory to remain competitive or to ensure products remain profitable.

4. Once you have a significant US customer base, recreating the website with Americanized English, and with promotional content aimed at attracting a US audience, could lead to increased conversion rates.

5. The quickest and most impactful method to do this, is to develop the functionality to manage home page content separately for differing locals. You can then set this based on either IP address or chosen currency/shipping location.

6. Should you want to take this to the next level and rewrite content on the entire site in Americanised English, you should consider creating a separate website for your US business which is managed alongside but separately to your flagship website. This step should only be undertaken after strong initial growth is evident.

TOP TAKEAWAY: Focus on providing a native currency experience for quickest wins

6. Review, Review, Review

You’ve set your goals, you’ve improved your service, you’ve invested in marketing and your site is optimised to a US audience. Don’t just stop there.

Review your progress against the original KPIs you set at the planning phase. As you gain more traction you will have more information to inform future decisions. Whether you are successful or not, review strategy at least once a quarter and set new KPIs for the coming months.

If you are not seeing the success you expect, adjust your goals, and try a different approach. Don’t fall into the trap of dedicating a set time to develop functionality, and then considering the project complete.

Get in touch to find out how Venditan Commerce could help improve the shopping experience for your international customers.
Please call John or Chris on: +44(0)161 826 3098 or email us at: startyourjourney@venditan.com

Sign Up To Our Monthly Newsletter

Have our latest blog posts, company and industry news delivered direct to your inbox.

Elizabeth Aspinall
21st Jan 2019

Don’t Believe the Hype: 3 Core eCommerce Trends in 2019

Don’t Believe the Hype: 3 Core eCommerce Trends in 2019

Heading up an eCommerce business can feel like a brave new world every day. Total industry growth is awe-inspiring. According to data from Statista, global eCommerce sales will hit £3.2 trillion in 2021—that’s a jaw dropping 246% increase in online revenue from 2014. And all that growth is coming hand in hand with changes, too.

“Consumers seem ready to do things differently—almost 40% of our survey respondents would consider a drone as a delivery method.”
(PwC, Consumer Insights Survey 2018)

From the Internet of Things and virtual assistants like Amazon Echo, to voice search and the ongoing boom in mobile commerce, to virtual reality in-store and delivery by drone, there are some big changes afoot.

But at the same time, it’s not always clear where to draw the line between genuine game-changers and industry hype.

Here’s our quick guide to three of the core trends making a true impact on the industry in 2019, and what they really mean for retailers right now.

1. Delivery just keeps getting faster

Keep half an eye on the industry press—any press, for that matter—and you can’t miss the slew of new tech taking convenient delivery to new heights. Oh, and the one name plastered all over it…

Amazon.

Whether it’s delivery by airborne drone in under 16 minutes, a ‘Dash’ service that delivers over 150 brands direct to consumers’ door at the literal press of a button, or even the zero checkout brick and mortar stores of Amazon Go, the retail goliath aren’t slowing down.

And like it or not, Amazon are taking the UK retail market with them in 2019. A massive 88% of consumers are now willing to pay for same-day or faster delivery, and 40% say they’d happily take delivery by drone (PwC, Consumer Insights Survey 2018).

But that won’t make 2019 the year every other e-tailer burns their margins in pursuit of free delivery.

Yes, convenience is now a fact of life in modern e-commerce – but not at any cost.

Building a competitive delivery system still comes down to more than raw spend. We’d recommend E-Commerce businesses keep their eyes on the prize; nailing your core operations with the right partners, precise margin calculations, and the right staff management will go a lot further than a team of drones.

2. Omnichannel finally replacing multi-channel

You might be shocked to see ‘omnichannel’ retail on a 2019 trends list.

But despite being ancient as far as industry buzzwords go, omnichannel remains “one of the last frontiers of digital marketing”—and of E-Commerce itself (eConsultancy).

Partly that’s down to the continued growth in channels.

Achieving an omnichannel operation—unifying multiple channels to create a seamless customer experience—is a major investment at the best of times. Let alone when retailers are chasing down all the individual channel opportunities springing up.

Mobile commerce alone has doubled since 2010 and is set to surpass desktop buying (PwC). Meanwhile other channels are growing fast, with early adopters driving native shopping on social media platforms like Facebook, and brand new tech like virtual assistants and voice search opening new ways to engage consumers.

So is investment in omnichannel really a winner?

The short answer is ‘yes’. This is one trend we’re backing all the way.

Getting omnichannel operations in place paves the way to the seamless customer experience that 77% of shoppers are calling out for (McKinsey), meaning businesses who embrace this shift will reap the rewards.

With benefits ranging from smarter marketing to massive savings in the warehouse and logistics, omnichannel really does represent the future of E-Commerce.

3. Emotional commerce

While it’s easy to get caught up in all the shiny new tech, there are other areas where the industry is making strides—modern consumer psychology is getting smarter all the time.

Put these two together and there’s real potential for retail businesses to win consumer’s hearts and take their E-Commerce strategy to a whole new level.

After all, some of the statistics attached to emotional methods are pretty incredible…

Could ‘social proof’ seriously deliver a 270% higher conversion rate—up to a staggering 390% for more expensive luxury products? (Spiegel Research Centre) Could using simple storytelling increase the amount consumers will pay for a painting by a full 11%? (eConsultancy)

Could using simple storytelling increase the amount consumers will pay for a painting by a full 11%?

– Econsultancy

But while these results do seem incredible, the truth is using emotional strategies isn’t all that revolutionary.

You’re already tapping into consumer emotions every time you launch a sale, offer loyalty points or share your contact information. Chances are your E-Commerce trading team are already experts in the field of emotional strategies.

So expect businesses to get smarter about using emotional triggers, but expect the results to be stronger growth rather than industry transformation.

The e-commerce essentials

There you have it, three of the core trends driving change in E-Commerce this year. This list is by no means exhaustive, but we do think it pulls the hype from the genuine game-changers.

Ultimately, it’s a focus on concrete results that sets successful brands apart. Retail businesses that keep their focus sharp and target strategies that deliver measurable ROI will be the ones that succeed in 2019—just like any other year.

Sign Up To Our Monthly Newsletter

Have our latest blog posts, company and industry news delivered direct to your inbox.

John Coyne
21st Dec 2018

Irrational Shoppers: 3 Ways to Boost eCommerce Conversions With Behavioural Economics

Irrational Shoppers: 3 Ways to Boost eCommerce Conversions With Behavioural Economics

It’s easy to slip into thinking that consumers do their shopping based on cold, hard facts. Get the right product, set the right price, display it clearly on your site and there: conversions will take care of themselves. Right?

Well not quite.

The truth is emotion goes right to the heart of every purchase. Appealing to consumers’ hearts is a fact of life in E-Commerce, and business returns have been proven time and time again in ‘behavioural economics’—a buzzword-heavy but highly useful take on things.

Ultimately, growing your business means engaging consumers on a human level. Giving them reasons to connect with your business and build a relationship with your brand.

So how can we create these relationships and drive conversion in E-Commerce?

Well it turns out taking advantage of consumer behaviour to boost conversions and sales might be easier than you think—the secret is just staying smart about consumers’ motivations.

So here are three simple strategies built on consumer behaviour…

1. Price Anchoring

The strategy behind ‘price anchoring’ is simple: price is always relative.

“Nothing is cheap or expensive by itself, it is only in comparison to something else,” say eConsultancy. “After seeing a £250 hamburger on a menu, a £65 steak seems quite reasonable. An £89 T-shirt looks cheap next to an £18,000 bag.”

“Nothing is cheap or expensive by itself, it is only in comparison to something else”

– Econsultancy

Truth is, consumers hitting your pricing pages don’t know whether your products offer good value straight away. Instead, they work it out by comparing the price of your products to others—finding an ‘anchor’ price.

To boost conversions all you need to do is make sure you have the right ‘anchors’ on display.

How The Economist Do It

The Economist magazine infamously nailed this tactic on their website, as Dan Ariely explains in his TED Talk. The website gave consumers three prices for three subscription options:

Online only: $49.99/year
Print only: $99.99/year
Online + print: $99.99/year

Seeing these options, 84% of consumers went for a bigger spend with the online and print package, while just 16% bought the cheaper online only package. Meanwhile zero consumers went for the print only option.

So why did the Economist offer a third option—the print only package—that they never sold?

Because of price anchoring.

Given a straight choice between the cheap online only, and the expensive print and online package, a massive 68% of consumers went for the cheaper option instead.

But keep the expensive print only package on display, and the revenue-boosting online and print version looks like a bargain, which dramatically changes consumer behaviour.

Of course, you don’t need to invent whole new packages—and you definitely don’t need to start manipulating your prices. You just need to make the most of your careful pricing calculations by making sure consumers see your prices in a context that helps them see the value.

2. Social Proof

If you’ve made a single online sale then you already have a massive marketing asset—your existing customer(s).

“The science is telling us that rather than relying on our own ability to persuade others, we can point to what many others are already doing.”

– Dr Robert Cialdini

No matter how on point your marketing strategy is, consumers will always listen to other consumers before they listen to you. This hands your business another easy way to boost conversions: let your existing customers do the persuading for you.

The simple way to nail social proof is putting customer reviews front and centre.

When products with over five online customer reviews enjoy a massive 270% higher conversion rate—up to a staggering 390% for more expensive luxury products—the results speak for themselves.

But even with numbers like these many retail businesses still hesitate to set up transparent online reviews. We get it: nobody wants to broadcast negative reviews.

So here’s the upside. Social proof works better with a sprinkling of bad reviews. In fact, products displaying an average of 4.5 stars from customers are more likely to convert and sell, than products with 5 stars.

Simply put, honesty is your best policy online.

Consumers want to see what your current customers think before they’ll make a purchase, but they also know when your story is too good to be true. So boost your marketing budget with ‘social proof’ by enabling reviews, and embrace the less than stellar responses too.

3. Scarcity

Scarcity has to be one of the oldest tricks in the E-Commerce handbook, and for good reason—it’s built on instinctive human behaviour.

As consumers, we’re all wired to want what we can’t have. The ‘scarcity bias’ means we’ll just assume that a product in short supply must be worth having.

Managing scarcity is at the core of successful E-Commerce. You’re already grappling with changing online demand and running low on warehouse stock—simply spelling that out for consumers actually makes your products more exciting, so it’s a great way to encourage conversions and sales.

Highlight high demand and limited supply with messages like these on your product pages:

‘2 left in stock in UK Warehouse’‘127 people looked at this’
‘6 people are looking at this’
‘Order in the next 1 hour 17 minutes for next day delivery’

Scarcity tactics like these have been proven time and again. But handle with care…

Getting scarcity wrong can harm your conversion rates. One study found that “when consumers interpreted scarcity claims as a sales tactic, the positive effect of scarcity claims on product evaluation would be diluted.”

That means you have to genuinely run low on the stock before you advertise it. If consumers think you’re just dressing up your stock levels or delivery policies to drive sales, they’ll abandon your site in droves.

So while scarcity is a great trigger to add to your web pages, it has to be built on a solid back end. At minimum, you’ll need an E-Commerce platform that can accurately track orders and stock levels in real time before you can pass that information over to consumers.

Once again, making the most of consumer behaviour comes back to being transparent across your operations, not just on one webpage.

Behaviour is bigger than a webpage

Get behaviour right and strategies like price anchoring, social proof and scarcity can transform your conversion rates.

But real results take more than a few nifty tricks on your product pages. Like we’ve seen, these behavioural strategies only work when you use them transparently—when consumers trust that you aren’t just using these triggers as cheap sales tactics.

And earning that trust is always a bigger commitment, a push for quality and consistency that goes right to the heart of your E-Commerce strategy.

To get more behavioural strategies and discover how they work in your wider E-Commerce growth strategies, download our eBook Beyond the Hype: Four Fundamentals For Sustainable E-Commerce Growth now.

Sign Up To Our Monthly Newsletter

Have our latest blog posts, company and industry news delivered direct to your inbox.

John Coyne
19th April 2018