E-commerce businesses will need to contend with changing privacy laws and screen fatigue, among … [+]
As the pandemic has reshaped our e-commerce behaviors, marketing to consumers has become vastly more competitive.
More brands are selling online and more people are shopping online—which means that the competition for attention is growing, the number of online ads is growing, and that customers’ ability to tune out those ads is getting ever stronger.
No one knows this better than AdRoll, the e-commerce marketing platform which serves over twenty thousand direct-to-consumer brands in the e-commerce space.
I sat down with AdRoll’s CMO Jason Finkelstein to get more insight into what they’ve learned and what they are seeing for 2021.
Shama Hyder: Tell me about some of the biggest changes you’ve noticed in e-commerce buying.
Jason Finkelstein: Our e-commerce customers are seeing behaviors unlike ever before—holiday shopping beginning in August, not October, and a more consistent cadence of buying vs. seasonal shopping, for example. We expect this to continue in 2021.
Hyder: You’ve mentioned that there are four big trends you’re seeing in eCommerce in 2021. Can you please elaborate?
Finkelstein: Sure. Here’s what we’re observing.
More online shoppers and more brands. COVID-19 and the after-shocks on human behavior will last well beyond 2021 which will continue to drive shopper behavior online. Immediately after the pandemic hit, the U.S e-commerce market saw about 10 years worth of growth in a single quarter! More shoppers mean more opportunities, and also challenges, in communicating with customers old and new. At the same time, the barriers have never been lower for new brands to sell online. Success begets copycats. So it’s never been more important for brands to not just start but sustain deep and ongoing customer relationships.
Lower shopper attention span plus the one-time purchase as the enemy. Screen fatigue will make consumer screen time (177 min/day on phones!) start to peak. This is the “attention economy” —ever-increasing competition for already limited consumer attention span and increasing need for brands to deliver relevant messaging in order to build sustained relationships with customers. Just getting a customer to make a single purchase is no longer enough for brands to be successful.
More shopper touchpoints. With the continued rise of conversational commerce (chat and voice), connected physical retail experiences like AR, connected TV, and new social channels, apps and services (see: TikTok!), the consumer journey will become even more complicated. There are already 56 average retail consumer touchpoints, from the first intro to sale, and these new mediums will add even more complexity to understanding consumer behavior online and not just connecting with shoppers, but building relationships with them.
Ads will get more privacy, but remain just as important; brands will cultivate more direct shopper relationships. Google Chrome, which has two-thirds of the browser market, will delay phasing out third-party cookies past their deadline of Jan 2022, but even after that happens, ads will remain critical in the marketing mix of brands. The growing focus on user privacy will force brands to concentrate on getting 1st party data and building deeper direct customer relationships, but those relationships will need to bridge upper funnel touches with ads and post-purchase with email, ads and other channels.
Hyder: What does this mean for brands selling online in 2021?
Finkelstein: With so many mediums and touchpoints, it’s difficult to figure out where to spend time and budget. So focus on high impact opportunities, especially ones that can be automated with the right tools! Zoom in on customer conversion points.
For example, we’ve found that cart abandonment is a huge opportunity and many e-commerce brands aren’t doing it as well as they could. We’ve seen that, on average, shoppers who are targeted with both emails and ads in a coordinated fashion – specifically for recovering abandoned carts – are 2x as likely to convert, and convert 2x as fast as shoppers who see ads alone. Most brands just use email alone or ads alone to target cart abandoners. Using both channels in tandem is a powerful combination.
In addition, loyalty is low. 75% of brands’ customers never purchase again at that same online store, according to our data from Shopify customers.
And on average, direct-to-consumer brands observe 2x as many cart abandoners (customers who leave the site before initiating checkout) as checkout abandoners (customers who enter their information to begin the checkout process, but do not complete it).
Marketers will need to figure out clever strategies to keep consumers coming back if they want them to go from one-time voyeurs to recurring buyers. If brands haven’t looked into calculating purchase frequency and repeat purchase rate, they’re already behind. To drive these metrics, for example, brands can focus on win-back retention email programs, target existing customer audiences with a rewards program, or even gamify purchases with badges or ranks. One-time purchases are the enemy of brands.
Finally, privacy will continue to be a focal point for e-commerce next year, especially as third-party cookies officially phase out, so marketers will need to make some big bets when it comes to what they’re doing to adapt and get ahead of the curve here.
Building deep, ongoing customer relationships will be critical to success in 2021, and that involves several different factors:
- Building brand awareness
- Growing in-house email lists
- Investing in growing and keeping valuable first-party data
- Selecting vendors that give them a place to store and use that first-party data to manage communications across channels in one place
In 2021, e-commerce brands will need to up their game in how they communicate with customers, or they’ll be left behind and forgotten. There’s no way around it — marketers must get more sophisticated, and that means unifying their communications across channels and across their customer journey, targeting their audiences more effectively, and investing in growing their own first-party customer data now. In e-commerce, brands that build long-standing relationships with customers will win.