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?
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…
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%?
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.
21st Dec 2018
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”
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.
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.
19th April 2018
Manchester based E-Commerce & Retail Software specialists, Venditan, are pleased to announce a new strategic partnership with Swinton Lions RLFC.
Swinton Lions compete proudly in the Bet Fred Championship, the second tier of English Rugby League. However, historically, it’s a club that hads enjoyed plenty of success at the highest level, having been crowned Champions of England 6 times, and Challenge Cup winners 3 times.
With the club having turned 150 years old in 2016, it is now under the ambitious stewardship of Chairman Andy Mazey and a forward thinking board who are keen to plant roots within the local Swinton community to ensure the Club’s future is bright.
Step forward to March 2018, and this Sunday (25th) sees E-Commerce & Retail Software house Venditan as the Main Match Sponsor for the Swinton Lions Versus London Broncos fixture in the Bet Fred Championship.
Speaking of the partnership, Venditan Commercial Director John Coyne, himself a former proferssional sportsman at Wigan Athletic Football Club, had this to say;
“I’ve been a Rugby League fan all of my life, having grown up watching the all conquering Wigan sides of the late 80’s and early 90’s, and I first began watching Swinton in 2016 when they moved to Heywood Road in Sale. When Andy Mazey took over the club, you could feel an almost overnight change of emphasis – the club seemed to be much more professional in their dealings than maybe they had been previously, and there was a lot of talk about investing in the future of the club and the local Swinton community, and the talk has turned into action. I met with Andy to talk about how Venditan could get involved and support the club, and this has resulted in forthcoming match sponsorship, and we’ve also sponsored a player this season, Marcus Webb.”
19th March 2018
According to the research institution eMarketer, UK retail eCommerce sales are expected to top £60 billion by the end of 2015, with revenue from outside of the UK the fastest growing part of this total.
And according to Internet Retailer Magazine the rate of this growth will continue in 2016, with the USA, China, Japan, Germany, France, Russia, Canada and Australia all proving particularly attractive territories for cross-border online trade.
So how can a UK retailer, with no physical footprint overseas, take advantage and begin to successfully export?
Demand Versus Emerging Markets
There is a very simple trap to fall into when thinking about Internationalisation of your website: let’s ship to everyone, everywhere! However, this is not necessarily the best approach.
It’s important to use existing data to formulate your strategy rather than look to follow a trend that might not actually be suitable, no matter how tempting it may initially seem. For instance, there is much discussion of rising demand for global products from emerging e-shopping markets such as Brazil, Indonesia, Thailand, China and Spain, with consumers in those countries more than willing to order from international websites.
However, identifying the markets you want to target should be weighed against the existing demand for your product in that territory (search traffic, existing international traffic to your website), along with how well positioned you are to service that customer base in terms of merchandising, competitive shipping costs and handling customer service enquiries.
Google Analytics provides a simple way of understanding your traffic sources, and that’s a good place to start.
- If you have promising volumes of traffic visiting from Germany, for example, then what devices are people using to view the website?
- What are smartphone adoption rates?
- Is there a sufficient search demand for your products in that territory?
- Are there simple routes to sell your products to German consumers – established marketplaces, for instance, Amazon.de?
- Paid Advertising?
- Local Affiliate Networks?
In Germany, the answer is a resounding ‘yes’, but it doesn’t come without its own challenges. Running a Product Listing Ad via Google.de would require your content to be translated into German, for instance, and the price would need to be displayed in Euros.
Is that the case in all the countries you currently attract visitors from?
Ok, so I’m driving lots of traffic from Germany, I can sell via Amazon.de, and I’ve set up paid search campaigns on Google.de. I’m good to start, right?
Maybe not. Even if your brand is widely known in the UK, brand equity may need to be built from the ground up in a new market. There are many considerations, for example, how does your brand name and imagery translate culturally? Causing offence through not exploring all connotations will more than likely result in failure.
Be Prepared for the Long Haul
As with all eCommerce growth strategies, half-baked effort will provide half-baked results. Let’s take Australia as an example – what are the operational and marketing considerations for retailers looking to sell to Australian consumers?
- Language and Currency – With Australia there is no multi-lingual consideration, but accepting Australian dollars will tailor your offering for the local market
- Conversion Optimisation – Does the website offer personalised content for the territory?
- Domains – Use a sub-domain or register the local domain?
Driving Traffic & Reaching New Customers
- Understanding the local market – device adoption rates, what are conversion rates on smartphones, tablets?
- Which channels? Email marketing, search – paid and organic, social media, affiliates and established marketplaces should all be investigated
- Branding – does your branding translate well outside of the UK?
- Seasonality – does your product mix translate? For example, a fashion retailer who is promoting Autumn/Winter stock in the UK is unlikely to drive full price conversions to Australian consumers who will be in the middle of their summer.
- Pricing – how do you compare with local and other international sellers?
Order Fulfilment and Shipping
- Competitiveness – how does your shipping service compare? Can you get your products picked and packed and on its way to your new customer in a time-frame that makes it worth them ordering the product from overseas? Is the price point for delivery going to cover your own costs while remaining attractive against the competition?
- Reliability – are you confident that your existing courier network can deliver on the promise you have made to the consumer?
- Distribution – are you legally allowed to sell your products in the country you are shipping to? Are there restrictions – either from a manufacturer or potentially even government regulations/compliance?
- Customer Service – are you able to offer the same levels as you would to UK consumers? How will you handle returns?
- Fluctuation – how will you monitor and safeguard against the risk of ever changing rates? How can you protect your margin?
Fraud & Payment
- Does your payment service provider offer any additional screening or advice against fraudulent transactions that might not be as easy to spot?
- Methods – do any alternative payment methods exist? Is PayPal or Pay with Amazon a prominent option?
Unfortunately there is no magic wand. eCommerce may feel like a constant cycle of test and measure, and that will certainly be the case as you venture into the uncharted waters of international e-retail. However, it can still be a great way of generating growth for your business, and as you master all of the considerations discussed above, expansion into new countries can happen more efficiently each time you identify a new opportunity.
Entering International Airspace
So there’s plenty to consider then, but fortunately here at Docnet we have plenty of experience of confidently navigating international waters with our retail partners and keeping them safely on the straight and narrow.
So Manchester to Sydney in less than 2 hours?
Our retail commerce platform has helped retailers all the way from taking their very first Euro, US Dollar and Japanese Yen all the way through to establishing a profitable global online customer base.
We recently took less than two hours to deploy a new front end website aimed at the Australian market for one of our fashion retail customers. This used the same template as their existing UK offering but crucially gave them the ability to merchandise it for the Australian summertime (while the UK website is geared towards Autumn/Winter product) and launched with a local domain and pricing/currency defaults to the Australian dollar.
Talk to us to find out more.
John Coyne, Commercial Director 0161 8390 101
13th November 2015