Which are the most salient features of e-commerce in 2022. What impact will they have on marketing in 2023? Here are 7 defining elements for e-commerce marketing according to Portada’s community of brand marketers.
2022 will mark a major U.S. retail milestone, as e-commerce will cross the $1 trillion mark for the first time, according to the latest retail forecast from Insider Intelligence. E-commerce has emerged as a major force whose ultimate impact on marketing, specifically e-commerce marketing, some observers think will be as significant as the introduction of the Internet in the nineties.
1. Gaining Ground Among Traditional Marketers
Sectors that were laggards in the adoption of D2C and online retail media are now making e-commerce – D2C, online marketplaces, or both – a significant distribution channel. Plants marketers are an example. Plant marketers like Costa Farms used to mostly have a traditional marketing mix, but digital marketing, e-commerce, and D2C initiatives are gaining ground. Direct online consumer contact also allows marketers to grow their customer database with first-party data. “E-commerce is still a small percentage of our total sales, around 5%. Nevertheless, in the last 4 years, we have seen strong growth and sales spikes during and after the pandemic,” Mari Carrasquillo, Senior Director Brand & Channel Marketing at Costa Farms told Portada earlier this year. Costa Farms also has a D2C strategy through its own e-commerce site: https://shop.costafarms.com/. D2C sales have higher margins, and the company is attempting to grow at rates of 300% and more in the coming year. ‘The store is new, we launched it in May 2021. This year the plan is to invest in search and in top-of-the-funnel activities to lead consumers to the site. We didn’t direct funds last year, so we are extremely excited to allocate money to generate consideration and more conversions,” Carrasquillo adds.
2. E-Commerce Trends: Multipoint Advertising Attribution
Effective advertising attribution analysis for sales at online marketplaces (e.g. Amazon, Walmart, Target etc) or D2C is paramount to the optimization of marketing strategies. “My experience with advertising attribution models is that it is better to use multipoint attribution models and not last-point or last-click attribution. That said, we like to use 7 days for more consumer impulse-driven products and a 14-day lag for hardware, electronics, kitchen appliances, etc. We also organize our attribution models by paid media vs. non-paid media and analyze a lot of affiliate programs that can provide rich data. We mix this with the interactions that the customer has with paid media, including sponsored products,” says Guillermo Rivera, VP of Marketing at Latin American e-commerce brand aggregator Merama.
3. Content for E-Commerce: Marketplace Channel Optimization
Content Marketing for E-Commerce is another marketing subdiscipline that has emerged as a result of the e-commerce explosion. “We have a channel optimization playbook including SEO which includes the ideal words for title, description, and wording to use in certain marketplaces and not in others. A+ content, images, and video to complement images and text. Our mission and obsession is to build the perfect SKU, and the best detail page we can have. We complement that with certain traffic testing from social media. We distribute that traffic to D2C or the online marketplace and analyze the differences in consumer behavior,” says Merama’s Rivera. “Content marketing is very useful for us and we are also including brand health metrics in our content marketing initiatives in order to assess the overall picture. So perhaps a particular media has not been that strong in ROI terms, but did substantially reinforce brand attribute X or Y. Content marketing drives differentiation in order for consumers to be in a better position to convert later on,” Moises Leiferman, Sr. Manager Omni Channel Perfetti Van Melle, noted.
4. Marketing during the Soccer World Cup and Black Friday
At a recent Portada Live brand marketing event, Alejandro Santa Martinez, Digital Marketing & Ecommerce Leader, Latin America at Philips, asked Manuel Medina Riveroll, Sr. Marketing Director Hisense Mexico, how Hisense, an official World Cup sponsor, will handle the advertising noise with Buen Fin, Black Friday, Cyber day and World Cup all happening at the same time. Medina Riverroll answered that “It is the only time in history that we have ‘El Buen Fin’ with World Cup and the Christmas season together. The way we are thinking about it is by segmenting channels and by objectives. We are different from other Fifa World Soccer brands like Coca-Cola or McDonald’s: Hisense in North America is a challenger brand, so we have different objectives for each of our media partnerships. We sell TVs but also white goods, smartphones, air conditioning equipment and we use other channels to drive consideration for purchase. On Black Friday, Buen Fin, or Christmas what you want to make sure is that you provide assistance to eCommerce. But in this case, it is a very different way of advertising in terms of creative and the way we approach media as we look for purchase consideration and awareness.”
5. Influencer Marketing’s Correlation with Conversion is Declining
When asked how the relationship between influencer marketing investment and e-commerce conversion has evolved over time, Julia Estacolchic Sr. Director, Brand Marketing at dating sites Match and Chispa says that “she has seen the impact on direct conversion soften over the last year or so, where it’s forced us to reevaluate and pivot our strategies.”
Estacolchic, attributes lower conversion rates of influencer marketing to changes in algorithms of some of the social platforms which have had direct implications on the reach and exposure of sponsored/partner content. “There could also be some audience fatigue, with more creators posting sponsored content more often and coming across as inauthentic, less organic, and uninteresting to their followers.
6. E-Commerce Trends: Social Commerce Ascent
Tightly connected with influencer marketing, which happens predominantly on social media, is Social Commerce. In other words, the use of social media platforms like Facebook, Instagram, or TikTok to market and sell products and services. As McKinsey writes, a two-hour live shopping event on TikTok can bring in more than a week’s worth of sales at a flagship store. An interactive, shoppable Instagram live stream garners 40,000 comments. According to Statista, by 2025, U.S. social commerce is expected to swell to nearly US $80 billion, or 5 percent of total US e-commerce. Globally, the social-commerce market is expected to grow to more than $2 trillion by 2025.
7. E-Commerce Trends: Apps as Conversion Machines; The Role of App Marketing
On average, mobile apps convert at a 157% higher rate than the mobile web. That is one of the main reasons app marketing, the promotion of app download and retention, has become a major marketing ‘industry.’ Once users are in-app they can be converted in an easier fashion: worldwide in-app advertising (IAA) was expected to generate US $200 billion in 2021 — no less than double since 2017.