Google has dominated search for at least 10 years now. Facebook, despite recent problems, still maintains its grip on social media and email is still a mainstream channel, 25 years after it became popular.
Ecommerce, too, seems to be stagnant. Penetration rates have been edging up year-on-year, but the dominant players, Amazon, eBay, and Alibaba are all at least two decades old.
Yet, at a recent Econsultancy Digital Cream event in Singapore, marketers spoke with us about a few ways in which ecommerce is evolving. At the Ecommerce table hosted by Ajay Shankar, Ecommerce Director, Lenovo and sponsored by Magento, attendees spoke of four major changes happening at ecommerce companies.
1) The offline/online narrative has shifted
Just one year ago, when Ajay was also hosting the Ecommerce table at Digital Cream, the discussion centered on how offline companies should approach the inevitable task of going online.
This year, however, marketers instead were speaking about how they could port their online capabilities to offline, bricks-and-mortar stores. Partially driven by Amazon’s lead, participants also spoke about how, in some markets, they were reaching ecommerce ‘saturation’ and needed to move offline to continue growing.
For example, in China nearly a third of retail sales are online, by some estimates, and consumers in Asia-Pacific are expected to spend one in five of their retail dollars over the internet this year. Increasing top-line revenue year-on-year through online sales is becoming quite challenging, said one attendee.
Discussions about how to move online businesses offline, however, are only just starting. One participant noted that it is far from clear exactly how brands will attribute offline sales to online efforts and calculate return on investment. These issues, among others, will have to be resolved before ecommerce companies make a big push to open offline stores.
2) Brands are getting serious about the ‘seamless’ customer experience
One characteristic of a maturing market like ecommerce is that brands are becoming increasingly committed to their channels. Whereas previously brands were undecided about how to balance their dot come sites, marketplace presence and partner channels, this dilemma has been resolved at many brands according to attendees.
The issue now, said one delegate, is that brands are now ‘obsessed’ with providing a seamless experience to their customers, no matter what channel they used for the purchase.
While this approach sounds obvious and relatively straightforward, what many companies have realized is that many marketing teams are not structured to deliver a uniform service across channels. Internal silos, technology limitations and budgetary issues have prevented many brands from providing a seamless cross-channel customer experience.
Participants indicated that there were some notable exceptions to this rule. Technology companies, such as Apple, seem to have overcome this by tightly controlling distribution and pricing. Another marketer felt that Sephora, too, had succeeded in delivering a uniform experience across the web, mobile and even in-store digital touchpoints.
These examples, the table agreed, were rare, though, and most companies are still struggling in this area.
3) Ecommerce marketing comms is coming under increasing scrutiny
While ecommerce brands, or the ecommerce division of traditional brands, were still growing rapidly, digital advertising and other online promotions had a ‘free pass’ from budget holders, according to one participant.
Now, however, as growth is slowing and margins shrinking, spending on digital media to promote ecommerce is being looked at much more closely to determine whether it is delivering ROI for the brand.
Because of this, another suggested, ecommerce marketers now must think much harder about how to deliver the right message to prospects and customers and track effectiveness and attribution more rigorously.
Attendees discussed this point in detail, but few felt that any brand was doing ecommerce communications well currently and that everyone had a lot of work to do in this area.
4) Ecommerce team structure is changing
According to participants, marketing teams have, generally, been divided according to their specialty. Trade marketers handled distribution and retail, corporate marketers focused on the brand and comms and ecommerce marketers owned the online presence.
This structure, however, is changing at brands who, as discussed in point two, are striving to offer a seamless customer experience. Instead of being split according to channel, the marketing department will have cross-channel teams like brand awareness, customer experience and fulfillment. Team members will then aim to hit KPIs across channels, regardless of whether they’re working on in-store displays, via media, with the brand’s marketplace partners or on the corporate website.
And, delegates agreed, it is the teams who worked cross-channel who seemed to be closest to getting the consistent, channel-less experience right, which so many brands are working to achieve now.
A word of thanks
Econsultancy would like to thank our table host, Ajay Shankar, Ecommerce Director, Lenovo, and subject matter expert, Nicholas Kontopoulos, Regional Head of APAC and EMEA Marketing, Magento (an Adobe Company) for leading discussions on the future of ecommerce and how brands are adapting to changing market requirements.
We’d also like to thank all the client-side marketers who took time out of their busy schedules to discuss their online commerce experiences and insights. We hope to see you all at future Econsultancy APAC events!