What’s at Stake if you Don’t Innovate your E-Commerce Strategy?
In simplest terms, you could lose quite a bit. For years now, the transition to online selling has proven to be a challenge for many marketers and retailers, especially those with little to no experience selling online. Business owners often struggle to deliver a seamless, multi-channel buying experience or boost online sales.
For years, Amazon has dominated the e-comm market, and that trend is showing no sign of slowing. In 2016, eCommerce was dominated by three key retailers: Amazon, Apple, and Wal-Mart. Even with sales between $12 and 13 billion respectively, Apple and Wal-Mart still couldn’t hold a candle to Amazon with its whopping $79.3 billion in revenue.
In their effort to keep up with titans of e-commerce like Amazon, retailers of every size and description are being forced to make sweeping improvements to the overall online shopping experience.
Every step of the process – from that first click to visit the site to the final click to check out – plays a role in whether or not the customer completes his or her Buyer’s Journey through that store. From user experience, to checkout procedures, to loyalty incentives, to fulfillment, customer service, and returns, changes that cater to current market demands must be made.
Online retailers, regardless of size, have just two options: develop innovative marketing strategies or fail.
Brick-and-Mortar in Rapid Decline
The fall of the mall, along with the phasing out of traditional brick-and-mortar retailing has been in process for decades now. Even with e-comms like Amazon testing more traditional business models (complete with physical locations), many more brands are closing their doors each day.
In 2005, traditional department stores reported apparel sales topping $60 billion. That same year, online sales were less than half of that. This year, however, brands like JC Penney, Sears, and Macy’s – brands that were once American household names – continue closing more and more locations. They find themselves unable to maintain a healthy bottom line and, eventually, shift focus to online sales to improve their numbers.
Big BoxRetailers Seek Larger Online Footprint
Certain retail industry leaders have been looking at new, innovative ways to compete with an already highly-competitive digital marketplace. Nordstrom, Best Buy, and Target have all made heavy investments in their respective e-commerce platforms, with the number one goal being an easy, seamless checkout process for the consumer.
Wal-Mart recently revealed a bit more of their e-commerce strategy. As a brand, Wal-Mart consistently struggles to compete with Amazon, despite its coveted place as the world’s second largest online retail business.
In their effort to increase online sales traffic, the company has developed an online inorganic growth strategy, involving the acquisition of certain smaller, more “hip” online retail businesses that have established a solid brand identity within their respective markets.
In the past few months alone, Wal-Mart has acquired three leading online brands: Moosejaw, ModCloth, and ShoeBuy. What makes this move interesting is that, despite the brand equity that Wal-Mart possesses, the retail giant doesn’t plan on rebranding any of these companies, opting Instead to use them to expand its already firm online footprint. The intention is to improve reach by leveraging the familiarity of the pre-established brands. It is a move that will position them well for reaching audiences that would otherwise be outside its own footprint.
E-Retail Is Not the Final Authority
Even those pure e-comm business — the ones who built their brands online — are far from safe.
For the vast majority of people who shop online, the buying experience is every bit as important as the product itself. Dissatisfaction with either decreases the chance of someone ever becoming a loyal customer significantly, which, in turn, affects sales.
Earlier in 2017, Nasty gal – an eCommerce giant – filed for bankruptcy and made arrangements to sell the company to rival e-tailer Boohoo.com. The demise of Nasty Gal, a company that, in 2014, generated $85 million in sales only to go bankrupt two years later – was the result of its lackluster distribution strategy, as well as its low customer retention.
In short, eCommerce is a tricky business.