Ecommerce is a scary business.
Not only do you have to worry about keeping your own site running perfectly, you also must keep in mind that some 800-pound gorilla (i.e. Amazon) may suddenly decide that it wants a chunk of your business.
On top of that, consumer expectations change so often now that all the effort you put into making customers happy just a few weeks ago may have no measurable effect now.
Because of these factors and many others, ecommerce managers can be forgiven for being nervous, paranoid even.
To find out more about these fears and offer some group therapy, Econsultancy invited dozens of ecommerce professionals to discuss their current concerns as well as some of the industry trends and best practices at Digital Cream Singapore.
Below are the main items which delegates said were at the forefront of their minds (if not literally keeping them up at night) and some thoughts on how they will deal with them in the coming year.
1. Competing on price
The first thing nearly all participants wanted to talk about is whether ecommerce sites should discount their products to remain competitive.
The argument is that many people still think buying online should be cheaper and that puts ecommerce managers in a difficult position. On one hand, they want to live up to expectations but there is still a cost of operations which may be in line with other distribution channels.
Delegates resoundingly agreed that ecommerce sites are no longer required to deliver the lowest price. Consumers now choose ecommerce as a channel over physical visits because of the information available online, the many delivery options, and ease of clicking to buy.
Ecommerce sites should now emphasize the value it provides as much as, if not more than, the price of goods.
So, according to one attendee, ‘the time has now come’ and lowering prices does not have to be the only lever for increasing revenue.
2. Managing offline retailers
Another issue which concerned many ecommerce managers was how to work with offline retailers. Everyone agreed that both will exist for some time, but who should take the upper hand?
Should ecommerce follow the offers and priorities set by the stores, or should the stores act as a physical presence for the ecommerce site?
Following some discussion, delegates concluded only that there wasn’t any set answer; brands should be primarily concerned about the customers.
In Asian markets, for example, many brands have found that consumers browse online and then purchase offline. In these cases, the stores should consult the ecommerce team to see what is popular.
In many other markets, however, it is the other way around and consumers use physical stores as ‘showrooms’ before making an online purchase. Here, the ecommerce team needs to be kept in the loop about any deals or promotions that consumers may be expecting on the site.
Ecommerce and store managers should strive to provide a seamless experience between online and offline as that is what consumers now expect.
3. Integrating chatbots
Like many other marketers, ecommerce managers worry about innovation. What will be the next technology to impact on their specialty?
Participants felt that while virtual reality and AI-assisted shopping was interesting, chatbots with machine learning were probably the ‘next big thing’ for ecommerce. The reason is that ‘chat’ provides a universal interface for many different elements of ecommerce and ‘bots’ help them automate customer-facing aspects of their service.
Attendees named many things that chatbots could be used for:
- Brand awareness.
- Product questions.
- Cart abandonment.
- Customer questions.
- Ongoing engagement with the brand.
Some even felt that a good enough chatbot would allow consumers to go directly to a vendor for product questions without ever using Google. Everyone agreed that this would affect ecommerce, but most felt that chatbots were not quite good enough for that – yet.
4. Maintaining investment from the business
Ecommerce, like many aspects of digital, is not yet a profit-making enterprise for many brands. Because of this, ecommerce specialists are constantly worried about investment from their business sponsor.
The consensus, though, was that it is getting more difficult for retail to survive with their legacy business. Even large retailers, such as Walmart in the US, are now investing heavily into ecommerce to face challengers such as Amazon.
Managers should, however, be careful when asking the business to invest more in ecommerce, warned one attendee. Make sure that senior management understand that investments in ecommerce take time to bear fruit.
Many projects lose investment because they promise returns in a matter of months, whereas ecommerce programmes often take a few years to break even.
5. Boosting revenue
Finally, it all comes down to money. Ecommerce professionals are constantly concerned about how to get more revenue through their site.
Opinions varied widely on the best way to improve top-line numbers. Some participants said that simply increasing ad spend can increase revenue. That is, every dollar spent on advertising yields two dollars in revenue and so, to increase revenue, marketers should simply increase ad spend.
Others felt that mature ecommerce brands often experience decreasing returns when they increase ad spend. Instead, they argued, brands should spend more intelligently on channels using attribution modeling.
Everyone agreed, however, that a long-term plan for delivering return on investment (ROI) to the business was more important than boosting revenue in the short-term. Once senior management see ecommerce on the path to profitability then marketers can spend their time worrying about ‘fancy stuff’ such as attribution modeling.
A word of thanks
Econsultancy would like to thank all of the marketers who participated on the day and the moderator for the ecommerce table, Prakash Chandrasekar, Head Ecommerce Analytics & Planning at Levis Strauss & Co.
We hope to see you all at future Singapore Econsultancy events!