In March 2020 as the country went into lockdown almost every aspect of consumer life changed for marketers across the globe. For many brands the biggest shift was the escalation of ecommerce. From the rise of small businesses selling direct to consumer, to the growth of re-commerce and the phenomenal success of marketplaces such as Amazon, the pandemic has ushered in vast changes to how, when and where consumers shop. After over a year in lockdown, a landmark report from MullenLowe Profero reveals that these habits will be hard to shift, with significant implications for the future of marketing.
“We’ve seen five years of growth in just 12 months” explains Rowan Kisby, Strategy Director at MullenLowe Profero. In 2019 ecommerce accounted for 19.2% of total retail spend; the 2020 figure is 27.9%. It’s a leap which, according to MullenLowe Profero’s Commerce in the aftermath report, demonstrates that this shift is here for the long-term. The report reveals that 71% of respondents will continue to shop for items online, even after the pandemic.
Unsurprisingly the research cites convenience and ease as the key reasons to keep shopping online post pandemic. Delivery is key to this sense of convenience and 15% of consumers are motivated by delivery to their door. Yet four-hour delivery windows should not be seen as the start and end of the convenience journey. “When thinking about convenience, we need to look at the experience as a whole, from ease of item discovery right through to the last mile,” explains Kisby.
The report predicts a rise of an ‘era of convenience’ commerce where instead of being a ‘nice to have’, convenience is critical and becomes the cost of entry for brands in an increasingly crowded ecommerce space. Yet the report underlines that there is more to convenience than simply the speed of delivery, pointing to data showing that 7% of 16-to-24-year-olds are motivated by the variety of items available and 8% are motivated by the ease of browsing.
Notably, convenience plays a huge role in where consumers start their purchase journey with some categories owned by Amazon (toys, hobbies, entertainment and stationary) while others are led by Google (gifts, garden). Others (groceries, toiletries and fashion) are owned by multi-brand stores. The research reveals that subscription services are thriving, particularly in high growth categories such as health and wellness.
The growth of ecommerce has brought with it a number of challenges for marketers. Kisby points to the way in which the coronavirus crisis has pushed up the price of a variety of pay-for-performance metrics. At a time when consumers were driven by necessity to search for products they could no longer buy in store, CPM’s have increased substantially. The pay-to-play space is increasingly challenging to navigate.
According to Kisby, 53% of consumers default to Amazon and with COVID pushing up the cost of customer acquisition, marketers need to think harder about their strategies. Kisby notes that if you root convenience in every aspect of the customer journey it can make brands think harder about how they connect with consumers.
Abandoned baskets continue to be a key challenge for brands and the research revealed that 30% of online shoppers have abandoned a basket because delivery was too expensive, while only 11% complained that an item was not available for next day delivery.
For example makeup brands which have invested in digital ‘try before you buy’ experiences have seen customer conversion rates triple, simply by rising to the challenge of thinking about how consumers interact with their products in the real world.
The need for a more creative approach to ecommerce is clear. The report revealed a ‘digital experience gap’ with 39% of respondents citing a gap between what brands claim to do and what they deliver in their digital experience. While 43% feel digital experiences are becoming too similar.
Amazon remains the marketplace default with over half of consumers defaulting to the site for most of their purchases.
Yet, there is clearly space for competition. The research revealed a gap in the market, an unmet consumer need for a more ethical alternative. The research showed that consumers had a higher intent to purchase from small, independent and ethical businesses but hadn’t yet acted on this intent because discoverability and range were key barriers to action for those interested in these ethical alternatives. The opportunity for creative innovation when it comes to ecommerce is clear, for the changes in consumers’ buying behaviours are here for the long-term.
KEY TAKE OUTS
In a wide-ranging discussion experts from across the industry discussed the future of ecommerce in a post-pandemic world. Here are the key takeaways:
- There will be no ‘return to normal’. The shift to e-commerce is a sustained one. Consumers have recognised many of the barriers to entry for digital commerce were entirely imagined.
- Too many corporate brands are approaching direct to consumer from a ‘data first’ perspective, an approach experts describe as an ‘inside out’ one. Smart marketers instead start with the consumer, looking at what they can deliver such as exclusive experiences.
- The next challenge for brands when it comes to ecommerce is one of experience. When the choice is based on a single swipe of a thumb, what you stand for business is a vital question to answer up front.
- ’Shoppertainment’ will have a growing role in the ecommerce space.
- Price transparency is here to stay, but brands should not discount the importance of conscious consumerism.
- Logistics and delivery will become increasingly important to ecommerce. Brands should keep sustainability front and centre when tackling this issue.
Visit the MullenLowe Profero website to read the full report, Ecommerce in the aftermath
This article was originally published on Creativebrief