2017 was a tough year for brands. Sales continued to shift from stores to ecommerce, and ecommerce was increasingly dominated by marketplaces.
So how are ecommerce managers at brand reacting to this threat? And what else will be on their minds in 2018?
To find out, Econsultancy recently invited dozens of client-side marketers to discuss these and other topics over roundtable discussions. At the Ecommerce table, chaired by Ajay Shankar, Head of Ecommerce, Essilor, ecommerce managers told us their main concerns for the coming year, five of which are summarized below.
1) Brand.com vs. marketplaces
With consumers shifting from buying in-store to ecommerce, brands have a difficult decision to make. Should they develop their own brand.com sites or put their efforts into marketplaces, like Amazon?
Attendees indicated that, for now, most are doing both. Companies are developing an online presence for branding purposes and offering basic ecommerce. Then, at the same time, they are increasingly making products available on marketplaces to allow consumers to be able to buy their products wherever they shop.
Is this strategy working? To some extent yes, though one attendee said that the relationship between brands and marketplaces was clearly ‘an unhappy marriage’. Brands need distribution just as marketplaces need products, but ecommerce managers felt that they were being kept at an arm’s distance from the statistics they need to improve performance.
2) Cost to serve
Another main concern of brand marketers in 2018 is the cost of providing ecommerce services to consumers.
Called the ‘cost to serve’, many brands are still trying to determine how much they are spending to keep their ecommerce operations running. One participant said that they know that logistics costs are typically much higher for ecommerce than store retail, but that they couldn’t come up with comparable figures.
Additionally, most ecommerce managers don’t know how their costs compare with the marketplaces so they find it hard to price delivery costs and determine minimum basket size for free delivery.
3) Channel strategy
Another issue ecommerce managers will face in 2018 is how to use digital channels effectively.
Some felt that driving awareness should be the main focus of channel strategies and that consumers should be encouraged to buy through their preferred channel. Others felt that it was still important to drive traffic to the brand.com site so that they could gauge consumer interest in various products.
All agreed, however, that influencers are now pretty much required for brands now and that managing their influencer portfolio was going to be a key topic in 2018.
4) Online to offline (O2O)
Participants agreed that the lines between digital and physical are blurring and consumers expected a seamless experience from online to offline (O2O).
This is easier said than done, quipped one attendee. Identifying online consumers in-store is one huge hurdle brands are facing. Equally difficult is how to offer a comparable experience online to an offline customer.
Finally, ecommerce managers said that they are still struggling to attribute media spend to offline conversions and will be working on this problem to a great extent in 2018.
5) How to get management support
Overall, participants said that ecommerce is getting so difficult for brands that they are still looking for ways to get management support for ecommerce efforts.
Some attendees said that they were able to get management on board by proving the ROI of promotions and loyalty programmes. Others said that management needs to be told that brands need to be everywhere the consumers are including brand.com sites, marketplaces, and O2O.
Regardless of the strategy, ecommerce managers will have a lot of work to do in 2018 to deal with the changing landscape of retail and capitalize on the changes in consumer behaviour from offline to online commerce.
A word of thanks
Econsultancy would like to thank the host of the Ecommerce roundtable discussions, Ajay Shankar, Head of Ecommerce, Essilor, and all of the ecommerce managers who told us about the issues that they’d be facing in 2018.
We’d also like to thank all of the marketers who attended Digital Cream Singapore and shared their valuable insights with their peers. We hope to see you all at future Econsultancy events in 2018!
For more on this topic, subscribers can download Econsultancy’s Ecommerce Best Practice Guide.