SHOP - The New E-Commerce Rulebook
Amazon (NASDAQ: AMZN) is proof that e-commerce revolution was well underway before the pandemic, but COVID-19 has changed it for good. The generation Z has marked a new era and these guys are not patient as consumer behaviour is changing at great speed. They want an almost instantaneous response to queries, feedback and comments. They like influencers but only if they are authentic. They want creativity, interaction and engagement that captures attention. There are new rules that online merchants have to adopt.
Leveraging technology to personalize customer experience
When personalized is done right, a customer feels like the seller is reading their mind. This emotional response generates a sense of loyalty. To achieve the highest ROI, retailers need to embrace technology and use it to optimize the shopping experience.
Delivering a customized experience is achieved by dynamic content, product recommendations, and personalized offers. Retailers need to learn about their customer’s browsing behavior, previous actions, purchase history and demographics. The more information they have, the better. Based on earnings it reported last week, it seems that Stitch Fix (NASDAQ: SFIX) mastered the magic of this personalized online journey. Data is at the forefront of this mission.
For whoever is not convinced, a Forbes study reported that customers spend 48% more when their shopping experience is personalized. Plus, 57% of online shoppers are are willing to share personal information with a brand if it benefits their shopping experience.
Social commerce
Social commerce means the consumer can checkout on the social media platform unlike social media marketing where users are redirected to an online shop to finish the transaction. Even the social media giant itself, Facebook (NASDAQ: FB) identified this opportunity and added virtual shopping windows on its platforms.
Now, social commerce has paired with influencer marketing. According to Forbes, the trend will continue to grow and evolve as 65% of influencer marketing budgets will increase this year alone. Moreover, 7% of companies are planning to invest over a million dollars per year towards this strategy. But, many companies overlook Tik Tok because isn’t part of the Facebook/Google (NASDAQ: GOOG) duopoly. Yet, this platform brings 800 million potential buyers, it is very friendly to both entrepreneurs and corporations and its user-interface is perfect for brand storytelling. Dunkin Brands Group Inc’s (NASDAQ: DNKN) Dunkin recognized it by snitching its superstar and self-proclaimed Dunkin Cold Brew junkie Charli D’Amelio. In addition to sponsoring the influencer, Dunkin renamed its cold brew “The Charli.” Consequently, Dunkin’s app downloads spiked while setting a new record for active daily users. Meanwhile, sales of cold brew saw a 20 percent increase on the first day, and a 45 percent spike on the second day. But the only cloud on TikTok’s skies is that the Trump administration banned it from U.S. app stores this year and ordered its parent company ByteDance to sell its U.S. portion of the company as part of the US-China trade wars.
Raising celebrity endorsements to a new level
But the celebrity endorsement game has been played long before the dawn of social media. Gap Inc (NYSE: GPS) signed a 10-year billion dollar celebrity partnership with Kanye West this year. This match made in heaven will give birth to a full collection called YEEZY Gap in 2021. Gap has managed to lose its cultural relevance over the years so its hope is that the 44-year old rapper will do for the brand what ex-NFL quarterback, Colin Kaepernick did for Nike (NYSE: NKE). He is an outspoken celebrity that brings an instant amount of attitude to the table while having the brand in its DNA. He worked for Gap as a teenager and often stated he’d like to be the “Steve Jobs of Gap” by serving as its creative designer. This couldn’t be a better fit for the troubled retailer as brands are demanded to take a stand and voice their opinion on societal issues as over 70% of younger consumers want to connect with brands on a values level, according to WWD Fashion.
Interaction
Liking a product on one image does not imply one will buy it. Long story short, hesitating from hitting the purchase button means a shop is potentially losing a consumer. Online reviews are no longer enough as consumers need to know they can trust the company. They need to know more about the product, such as a high-resolution 360-degree viewing image and they need a buying experience that is same or even better than in a physical store.
Brands need to take risks
COVID has accelerated the e-commerce industry’s growth. The lockdown has even forced boomers to shop online, some even for the first time. Consumer behavior is changing across the globe. Companies that previously embraced the e-commerce trend have already experienced expansion while traditional retail is shrinking. But, creating a website and selling products isn’t an easy task. Sales don’t automatically happen once a new Shopify (NYSE: SHOP) site is published. The competition is intense as more and more businesses are joining the online retail business revolution. Customers are demanding a sophisticated shopping experience so harnessing new technologies to improve and personalize the user-interface is essential. The changing economy calls for keeping up with emerging e-commerce trends to cut through the noise, get noticed, and attract customers. Brands need to take risks and fight to be culturally relevant.
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