Impact Partner Content: Absa / by Absa Business Banking
An ecommerce strategy is vital, but the relevance of your offering remains key. Internet traffic has increased by 50% during the COVID-19 crisis, but ecommerce conversion rates are dropping. Having the right channels are key, but at the same time, constant re-evaluation of the relevance of your proposition will sustain your business in the long run.
The importance of a strong e-commerce capability is not new for business owners, and there is little doubt that the Covid-19 pandemic has brought about a greater shift to digital platforms than ever before. Experts believe this shift will impact the retail landscape forever.
Jonathan Smit, Managing Director of the leading online payment Gateway, PayFast, recently said that retailers will need to adapt to the new normal in order to survive: "Over the past few years (customers) have come to rely on the convenience of online shopping, and now with the onset of the COVID-19 outbreak, it’s to be expected that the reliance on online shopping will be intensified. Self-isolation and consumer worry about public places means that local businesses are being forced to find quick and innovative ways to adapt to the current crisis.”
He believes it is likely that consumers who started making online purchases during the outbreak will continue to do so going forward. "People will spend more time shopping online because they are avoiding public spaces. The long-term effect is that they will become accustomed to browsing and buying online, and not visiting physical stores as often. If businesses can provide customers with a positive online experience, the short-term losses that brands may experience now could lead to their long-term gain." This could mean wider adoption of ecommerce, an area that many people have historically avoided, mainly due to mistrust of online platforms.
Chris Bones, Chairman of ecommerce consultancy Good Growth and co-author of the book Optimizing Digital Strategy, explains that the Red Queen hypothesis, named after Lewis Carroll’s famous character, states that while organisms need to adapt constantly and evolve in order to survive, they do so against a backdrop of competing organisms who are also evolving in an ever-changing environment.
Companies who merely imitate the digital channel experience of others in their sector may be placing a lot of effort into their online channel, but they may not be seeing an effective result that drives performance. “This approach doesn’t offer any competitive advantage to enable growth ahead of other sector players. To out-perform the competition businesses need to think differently about ecommerce and how they can accelerate their evolution,” says Bones.
Econsultancy provides a 7-point survival guide to ecommerce to those retailers looking to future-proof their businesses:
1. Align your ecommerce approach with wider business objective: Start by defining your ecommerce goals based on your wider business objectives. If your key focus is around growing distribution and volume, then operating through retail partners or distributors will be critical for success. If you are more focused on owning the whole end-to-end consumer experience coupled with higher margins, then a direct to consumer approach would be more fitting. In some cases, a combination across direct and indirect can work but, for this, a focus on category and portfolio management is key.
2. Build your combined approach through insights around your core audience: Always start with your portfolio and the core audience you want to target. Based on whether you are selling direct through your own website or indirect through retail sites, it will be important to align your audience with identified core shopper profiles.
3. Build a balanced investment plan to help you reach your sales potential: Depending on your routes to market and trading channels, it’s key to develop both a top-down and bottom-up investment plan that underpins your financial and sales targets.
4. Build a channel-wide and retailer-specific media and merchandising plan: The growth of ecommerce means brands need to develop future-facing marketing and media strategies to stay ahead. Partnering with retailers through mutually beneficial agreements is key to maximising visibility with cost savings attached.
5. Get your retail hygiene in order: Before starting with any activation, it is important to audit your retail health to make sure you have operational excellence in place to fulfil the orders quickly.
6. Optimise your content: A critical component for ecommerce success comes from the content you have in place, covering both functional and inspirational content. Retailers all have very specific algorithms that look at both commercial and relevancy factors when weighting and ranking products within their search results page.
7. Layer on biddable and co-funded media to convert the shopper: Once all these fundamentals are in place, you can start running biddable media solutions to drive purchases across core and affinity categories. By developing an audience and seasonal-based approach that draws on promotions that are running both in store and online, you can improve conversion dramatically both from repeat purchase customers and attracting entirely new shoppers.
Finally, keep in mind that an ecommerce platform is an alternative channel for your customers to access your products and services. The fundamentals of a relevant offering to customers remains key. Whilst internet traffic has increased by 50% during the COVID-19 crisis, ecommerce conversion rates are dropping: customers are tightening their belts and being far more careful of what they buy. Constant evaluation and re-evaluation of the relevance of your proposition will sustain your business in the long run.
