The pandemic did not create the need for digital transformation in retail so much as speed it up. As customers switched to online shopping in unprecedented numbers in 2020, brands had to move at breakneck speed to offer customers and prospects a compelling, consistent and scalable omnichannel shopping experience.
This has meant innovation and agility are proving to be crucial in turning the challenge of the pandemic into an opportunity, according to a recent Econsultancy webinar held in partnership with product information management (PIM) technology company, inRiver.
The “How To Drive Next Level Digital Commerce” event was started by Jim Clark, Commercial Research Director at Econsultancy, setting the scene with the quip, from Shopify’s COO, Harry Finklestein, that somebody had taken hold of 2030 and placed it in 2020. Figures from the Office of National Statistics backed this up, showing that 2020 saw eight years’ worth of ecommerce growth in just eight months.
It meant that online sales spiked from around 20% of retail sales before the pandemic to a spike of 34% during it. This massive rise in online shopping meant a quarter of home shoppers discovered new ecommerce companies during the pandemic and 30% bought items they would not have bought before.
“There’s no doubt the challenges these spikes in ecommerce have placed on firms some of which have had to reinvent entire business models,” Jim Clark commented
“While, of course, Covid has been a natural disaster, it has enabled brands to reach out and engage with consumers they might not have spoken to before.”
Charisse Payne, Senior Manager of Digital Merchandising at furniture and homewares retailer, Ethan Allen, spoke as an expert guest at the online event. She revealed the company had enjoyed a spike in online visits and pandemic shoppers were not only interested in home office purchases. She revealed mattress sales went through the roof, suggesting a lot of people may have been working in their beds when logging in from home.
Tapping into social and shopping blurring
The key for ecommerce companies has been to strategize how to adapt operations at speed to fit in with such a huge and sudden shift in consumer behaviour. This led many to tap into the accompanying rise in social media and exploring the “blurring” of social and shopping. After Instagram led the way with its ‘buy’ button, and other leading channels followed, consumers can now buy goods direct from social post without leaving the site.
Webinar attendees were shown this has helped Adidas report a 35% rise in ecommerce sales during the pandemic after it shifted ad spend to social, mainly to attract new Gen Z and millennial shoppers. Levi’s also invested more in social, in particular TikTok, empowering shoppers to buy the item in a post.
Greater agility does not necessarily mean chasing sales on new channels. It can also mean picking out high-performance channels to invest more in. This was certainly the case at L’Oréal. The beauty company reacted to physical stores shutting by shifting 70% of its advertising spend to digital channels, most notably Amazon, where the brand now receives 20% of its global sales. L’Oréal’s Chief Digital Officer Lubomira Rochet, summed up the move saying the business “achieved in eight weeks what it would have taken three years to do”.
Tapping into trust from UGC
Advertising can only take a business so far, to go the extra mile smart ecommerce brands have been tapping into the trust people have for one another by empowering reviews and user generated content.
River Island, for example, not only uses carousels of shoppable images on its website, it also features pictures of real shoppers showing off their new clothes. The pieces being worn can be added to a wishlist at the touch of a button so a customer can carry on browsing and then review the items they like. The result has seen site visitors who engaged with UGC doubled their dwell time on the site and become twice as likely to buy goods, spending on average 45% more.
This is a rich vein of content which home furniture retailer, Ethan Allen, has benefited from in the past year, Charisse Payne revealed.
“We’ve embraced UGC for quite some time now,” she said. “We have examples on our home page and on every product page we have a customer photo gallery because after people work with our designers and update their home, they want to show it off.
“We want to make sure that our designers’ work is up front and centre and it also helps customers seeing a sofa or a piece of furniture in someone else’s home to give them inspiration and ideas of how they can fit that piece into their own style. UGC is definitely an important part of the whole e-commerce strategy.”
The importance role UGC plays in showcasing products to browsers was highlighted by a Google IpsosMori survey of US shoppers which showed more than three in four, 76%, liked looking out for unexpected discoveries. Rather than being actively looking for a specific product, modern customers are looking what Jim Clark called “general lifestyle upgrades”. These can be found on Pinterest just as easily as they can a brand’s home page.
Content consistency is vital to inspire
For Erika Goldwater from inRiver, this underlines the need for retailers to be able to distribute content across multiple channels in many formats to ensure its products can be consistently found wherever consumers are searching. It is important because, according to the company’s research, customers are not only looking for inspiration, their journeys to purchase are now less likely to start and end through a single visit to a retailer’s home page.
“inRiver recently conducted a survey and we found that more and more consumers are going to Amazon and Google first to find different ideas and concepts and products,” she said.
“They might not know exactly what product but they might put in something like ‘sofa’ and hopefully Ethan Allen comes up first as it’s heavily SEO optimized of course and has beautiful images and then you go from there. You might not know exactly what you’re looking for, but you’re certainly looking for some inspiration.”
This need to consistently have the correct content updated and in front of customers at the right time, across a multitude of channels, was underlined by Econsultancy research which shows 80% of marketers identify relevant content as being crucial in encouraging customers to return. Three in four agreed it is also crucial in improving the lifetime value of a customer. However, half of marketers reveal the workflow around creating and updating content, while managing the necessary approvals, is ‘challenging’. Jim Clark explained the finding was largely attributed to content being ‘disconnected’ and ‘siloed’ across different platforms.
AR’s time to shine
As for the year ahead, the webinar heard how Econsultancy is not expecting VR to be a major factor in retail because of problems of affordability and the potential for motion sickness. Instead AR was called out as a bigger opportunity for the year ahead, with special reference to the impressive performance of online jewellery retailer, Kendra Scott. Those who use its AR service to virtually try on pieces are three times as likely to convert as those who do not and they also spend 20% more.
It is a new marketing tool being used by Ethan Allen to allow its range of furniture to be brought to life in the customer’s home, Charisse Allen revealed.
“Our AR app is utilised by both interior designers and customers to view our products directly within their own home space,” she said.
“With every product launch, every new content piece or feature, we rely on our PIM to have accurate data and to be able to easily process feeds to third party vendors. Having that structure has supported us, especially throughout the pandemic. We’re seeing more users come to our site and definitely an uptick in downloads with the AR app as more people are exploring ways to update and refresh their home.”
Three questions for 2021
The pandemic, then, has been a terrible chapter in history, there is no getting away from that. However, the one positive, that webinar delegates were left with, from Jim Clark, is that it has “forced innovation and collaboration which has enabled a lot of organisations to jump start their digital transformation efforts”.
He advised marketers planning their 2021 strategies to consider how new tools could help them tap into a surge in online commerce. To help the process, he suggested they should be guided by asking three important questions. Will a new tool generate revenue or cut cost, will it improve customer experience or will it offer improvement for employees, such as automation which allows staff to move on to more creative roles?