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E-What’s Next For Brands – DtoC

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E-commerce marketing – the practice of converting website traffic into sales – is simple in definition. But shoppers, digital platforms, and algorithms evolve constantly, and so must your strategy. Studies claim that 95% of purchases will be made online by 2040, and online shopping already accounts for 10% of retail sales in the U.S. alone. The numbers leave it crystal clear: brands can no longer afford to avoid the digital marketplace.

For the most part, brands are embracing the opportunity – there are 12-24 million e-commerce sites online, and according to eMarketer, e-commerce sales are expected to hit $27 trillion in 2020 (Note:
COVID-19 impact on consumer behavior will substantiallz accelerate this trend). But to succeed, brands must be strategic and consistent about e-commerce marketing, and how they use the tools that the digital era affords them.

E-commerce marketing involves balance of paid, unpaid efforts

In contrast to shopping in person, e-commerce offers customers a far more personalized, convenient experience. It gives shoppers access to almost any type of product from anywhere in the world and, similarly, gives brands access to platforms with a global reach and a myriad of tools to empower their brand. A recent study found that the #1 reason people shop online is that they’re able to shop at all hours of the day.

Putting your products in front of the right audience requires a balance of marketing efforts that can generally be broken down into paid and unpaid efforts. Unpaid strategies involve drawing the right audiences to your brand “organically” through campaigns that generate audiences and sales through offering relevant, captivating content. SEO falls under the unpaid category as well, enabling better search rankings for those willing to navigate search engines’ ever-changing algorithms.

Paid media typically involves buying a space for advertising across different digital platforms. Common formats include display ads, banner ads, and sponsored ads, and they typically live on platforms like search engines (Google, Bing), social media (Twitter, YouTube, Facebook), and typical websites.

Brands must be thoughtful about how they employ a mix of paid and unpaid marketing strategies, responding to their target audiences’ online preferences and behavior.

E-commerce shoppers are global, young, and skew female  

While each brand is responsible for understanding the particularities of its target audience, statistics on global e-commerce shoppers reveals a number of notable trends. E-commerce is increasingly global:cross-border e-commerce now accounts for 20% of total global e-commerce.

E-commerce is also increasingly generational: A recent study found that Millennials and Gen-Xers spend 50% more time shopping online than their older counterparts: 6 hours versus 4 hours, respectfully. And 67% of millennials and 56% of Gen-Xers prefer to shop online versus in a brick-and-mortar store. Breaking e-commerce down by gender reveals another interesting trend: Men spend 28% more than women shopping online.

Social media continues to drive effective e-commerce marketing

It’s no surprise that today’s social media platforms offer brands a myriad of ways to connect with today’s shoppers. While they can be selective about which platforms they use based on their audience and goals, those that forego a social media presence altogether are missing out. A recent study found that brands with a social media presence experience sales that are 32% higher than those that do not. This when considering the results of a study that revealed that 74% of consumes rely on their social media networks to make purchasing decisions.

Luckily, brands can turn to data to inform their decisions surrounding which platforms to invest in. For example, Shopify reported that the average order value for customers referred from Instagram is $65.00, followed by Facebook ($55), Twitter ($46), and YouTube ($38). Brands are already spending big money to promote their products on social media: eMarketer reported that Worldwide ad spending on Facebook and Instagram combined will reach nearly $95 billion annually in 2021. But other platforms are growing, too: The number of marketers sharing video content on LinkedIn is set to rise to 65% in 2021, for example.

Email marketing allows brands to be proactive in reaching audiences

While consumers actively seek compelling content from brands on social media, email marketing allows brands to initiate a kind of proactive engagement that keeps them top of mind with their audiences.

E-Commerce Marketing Study
Wolfgang Digital, “Ecommerce KPI Benchmarks 2016”

A recent study found that email marketing contributes to 20% of traffic that drives eCommerce sales, and OptinMonster reported that email marketing yields $44 for each $1 spent for a 4400% ROI.

Smart brands use a number of tactics to take full advantage of email marketing. Segmentation – diving groups of consumers into groups based on common characteristics, traits, or behaviors – is key to ensuring that the content a brand delivers its audiences is relevant. Depending on who they are and what they are looking for, consumers will seek different kinds of information and products during their buying journeys. Campaign Monitor reported that segmented campaigns to email subscribers drive a 760% increase in revenue.

 Shoppers increasingly turn to mobile for online shopping

An essential element of any e-commerce marketing strategy involves recognizing the different devices that shoppers use. 85% of customers start a purchase on one device and finish it on another.

Today, a significant portion of e-commerce activity occurs on mobile devices. This is true for all stages of the journey: 93% of Millennials have compared online deals using a mobile device. Shoppers even turn to their phones while in physical stores: 65% of consumers look up price comparisons on mobile while in a physical store, and 32% of shoppers changed their minds about purchasing items after checking out product information on their mobile devices within a physical store.

E-Commerce Marketing Study
Source: Outerbox

They feel as comfortable making important purchases on mobile as they do on desktop devices: In fact, conversion rates from mobile apps are 3x higher than mobile websites, and 40% of all online purchases made during the holiday season are done on smartphones.

What does this mean for e-commerce marketing strategies? Most importantly, brands must design mobile-friendly websites. 73% of consumers will switch from a poorly designed mobile site to one that makes purchasing easier, and people who have a negative experience in your mobile store are 62% less likely to purchase from you in the future. Brands that want to take it a step further can engage shoppers on brand or company-specific apps. According to a study from Invesp, 53% of smartphone and tablet owners will shop on company-specific apps.

AI set to transform shopping experience

While AI is still a nascent technology, it is quickly becoming a useful tool in e-commerce marketing strategies. It is primarily useful for deriving insight from large volumes of data. This is particularly relevant for e-commerce marketers that want to find patterns in shopping behavior and form a 360-view of customers as they give us clues about their preferences through interactions and engagements with your brand.

AI is also immensely useful in delivering better customer experiences. Chatbots represent one of the most popular applications for AI today. While nothing can fully replace the human touch, shoppers are starting to recognize the value that AI-powered customer service tools offer. A recent study found that almost half of consumers are open to the idea of purchasing an item from a chatbot. 57% are interested in getting information sent to them by a bot when visiting a business’s website.

What not to do: additional fees, complicated checkouts 

Shoppers go online for convenience, and if they can’t find what they want easily, or if it won’t be delivered efficiently, they are likely to abandon their journey with a brand. According to a study by Metapack found that 45% of online shoppers abandon their carts when they are unhappy with delivery options, and 69% feel the same about shipping fees.

Similarly, complicated checkout processes, websites that load slowly, and sites that aren’t optimized for mobile will leave the site without making a purchase. The consequences for this can be drastic: 73% of consumers will leave a site if it isn’t mobile friendly.

But there are ways to bring users who abandon back in. Email recovery strategies allow brands to send emails reminding users to return and complete a purchase. They are surprisingly effective, with a study claiming that almost half of recovery emails are opened, and that almost a third incentivize a sale.

Smart e-commerce marketing means automation, personalization, and convenience

Online shopping habits will continue to evolve as technology enables more and more ways to make e-commerce easier, faster, and more personalized. Smart brands can win in this space by staying attune to the devices and platforms that people are using, using technology to complement (and sometimes replace) the human touch, and building the tools to keep transactions as smooth and seamless as possible.

 

Loyalty marketing includes tools that help marketers engage with consumers. Here are some pros and cons of digital mobile wallets, in-app rewards, blockchain-based loyalty programs, AI-based loyalty marketing and mobile devices with beacon technologies.

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1. Digital Wallets, Great Organizers of Financial Lives

According to recent data, the average American carries 17 cards. This clearly shows how important it is for consumers to have an overview of their financial life (including their different loyalty programs).  Digital wallets are ideal to help customers organize their financial and loyalty products.

2. In-App Rewards: a Loyalty Marketing Tool

The digitalization of reward programs can be an important driver for customer engagement.  However, most In-App Rewards are based on a gamification context.

Pros:

  • Rewards for better prices, discounts, special offers. In other words, this type of technology can leverage the value proposition to customers.
  • Makes feel your regular customer as a high-value customer, that fact can generate effective recency/frequency and at least more interaction with the brand.
  • Churn strategies; getting back old customers / capture new generations and/or new markets.
  • Leverage Ancillary Revenue / Check-in ratio / Leverage negative performance markets or flights.
  • Incentives for B2C markets.
  • Differentiation from competitors.

Cons:

  • In-App can be very strong to generate engagement but also challenging to generate revenue.
  • Potentially low ROIs due to high operation costs (IT, back-end, front-end).

3. Blockchain-Based Loyalty Programs

Blockchain is a powerful strategy for loyalty marketing because of its inherent safety.  The most valuable asset of a loyalty or Frequent Flyer Program is the data. Blockchain is designed to store transactional data in a secure and decentralized way. Customers appreciate this model because it is a “Loyalty Hub”. This technology can simplify the process of applying and keep customers from having full wallets/apps or accounts/passwords with the brands they want to interact with.

Blockchain is designed to store transactional data in a secure and decentralized way.

Pros:

  • High redemption rates.
  • Analytical and statistical information / more accurate information / give the customer what they need, when they need it and at the right price.
  • Customer incentive oriented: “Buy what you need and I’ll reward you”.
  • Traditional loyalty programs reward you for the extra purchase when customers realize that is a problem. Here the information is secure.
  • Loyalty Hub: customers always appreciate simple and centralized platforms.
  • Points can be changed for cryptocurrency.

Cons:

  • Complex method.
  • High UX costs.
  • High consulting costs.
  • Blockchain technology may not yet be popular enough.

4. Artificial Intelligence

Nowadays is not enough to get customers and generate leads from e-commerce strategies. It is a must for companies to start being AI and Machine Learning oriented in some way. This is not a trend, but a real need. Brand marketers and loyalty marketing experts are looking for deep learning experiences that allow recording and auto-analyzing customer information. AI can enable an extremely high degree of personalization. To get the most out of AI it is important for managers to understand market behaviors, customer preferences, demographics, etc.

Brand marketers and loyalty marketing experts are looking for deep learning experiences that allow recording and auto-analyzing customer information.

5. Mobile Devices with Beacon Technologies

Frequent flyer travel programs or loyalty coalition programs are common currency in the travel and lifestyle sectors. These programs provide customers the opportunities to use/redeem the points (virtual coins) they win in the regular day-to-day shopping to acquire plane tickets, accommodation, car rental, ancillary airline products, etc. Beacons allow these programs to be farther reaching and help opening new markets, generally abroad.

Roberto Muñoz, Head of Loyalty Travel at Puntos Colombia, a member of the Portada Council System helped compile this information.

With nearly 95% of shoppers reading online reviews before making a purchase, reviews have transformed the way consumers make purchase decisions. According to a study by the Bazaarvoice network, one product review can result in a 10% increase in sales and 200 reviews can result in as much as a 44% increase in sales. We talked to two brand marketers whose businesses are mostly e-commerce driven about the way they use and leverage online consumer reviews in their marketing efforts.

 

Review Marketing Basics

Review marketing is a process certain brands use to manage their reputation online. For direct-to-consumer brands, this includes monitoring, encouraging, and responding to consumer reviews across multiple platforms.”We rely on consumer reviews because customers say it better than we can,” says Aireen de Peralta, Chief E-commerce Officer at WaterField Designs, a company that sells custom-fit bags and cases online.

We rely on consumer reviews because customers say it better than we can.
review marketing expert
Michael Montanez

Michael Montanez, Director of Marketing at luxury clothing label August McGregor, notes that “We use yotpo to power reviews for August McGregor as we’re adding to our tech stack to improve KPIs. Reviews are expected these days for RTW (ready to wear clothing). It’s all part of the process. Attribution – we haven’t gotten there yet to determine the impact of reviews.”

 

Trusting Customers, not Apps that Go After Reviews

Waterfield does not provide incentives for customers to write reviews. “We feel it’s more authentic if a customer decided on their own to write a review,” explains de Peralta. “We e-mail customers after a few weeks of shipping their purchase and request for them to write a review. That way, they will have had time to use the product in their daily routine.”

review marketing expert
Aireen de Peralta

Today, there are many apps and vendors that will aggressively go after reviews, offering discounts, points, or loyalty awards. However, de Peralta notes that she doesn’t employ these tactics. “Reviews apps are also complex enough to ask users to rate their experience based on certain criteria. We use just the simple open-ended format because we think this is a better way to capture what our user thinks is the primary reason to give feedback about. Each user has a different experience with a different emotional outcome, and we are more interested in capturing the emotions and understanding what it is important to them, rather than what we think is important to get feedback on.”

We use just the simple open-ended format because we think this is a better way to capture what our user thinks is the primary reason to give feedback about.

 

Attribution

Review marketing is very powerful in driving customers to sales. According to a study of customer restaurant reviews by the Harvard Business Review, “a one-star increase in Yelp rating leads to a 5-9 % increase in revenue.” On the other hand, according to research, if there is an excess of three negative articles within search results, businesses can expect to lose 59.2% of their potential customers.

“We can’t track if a certain review caused a sale, but we do get feedback from customers that reviews have helped them make a decision. This is anecdotal evidence, but it’s enough for us to know that reviews do help sales. We also view reviews as an outlet for our community to express themselves and for product feedback,” de Peralta notes.

 

Boosting SEO and Social and Customer Service

Reviews can also substantially boost SEO rankings since the reviews contain keywords. They are also “proof for social”. In addition, they can also inform customer service as “some reviews answer questions that people have”, de Peralta notes.

 

One of the greatest challenges of consumer data collection is the issue of privacy and consent. Today’s consumers are becoming more and more aware of how their information is collected, sold and used for marketing purposes.  How can companies overcome privacy issues and harness this information to deepen consumer relationships? Luis Macin, Nestlé Mexico’s VP E-Commerce, talks about Nestlé’s plans to develop wearables for consumer metrics during Portada México 2019.

Luis Macin, Nestle Mexico, Portada
Luis Macin, Nestlé Mexico’s VP E-Commerce

Interview conducted by Alejandra Velazquez

Problem Meet Solution

Data collection continues to dive deeper into the private lives of consumers and it is only natural that they feel their privacy is being invaded. Audiences find it unnerving when they mention something in conversation only to be offered that specific product online moments later. However, the great thing about wearables is the voluntary data collecting process. When users are nicely requested to share their data, it tackles the issue of consent and privacy. The consumer willingly welcomes a metrics device into the intimacy of their own home and even onto their own body and this is where the true power of wearables for consumer metrics comes into play. 

 

Who Wears Wearables?

The implementation of these devices in Mexico will take off immediately

According to emarketer.com, roughly a quarter of U.S. adults, 56.7 million, will use a wearable device at least once a month in 2019. Just over half of those will use a smartwatch. Furthermore, 3.8 million U.S. children and teens will have a wearable device. The e-health market is booming in Europe and North America, and it won’t take long for the wave to hit Mexico. “The implementation of these devices in Mexico will take off immediately because in Mexico we implement new technologies insanely fast, much faster than in other countries”, says Luis Macin, Nestlé Mexico’s VP E-Commerce.  In 2020, the wearables market will consist mostly of smartwatches, with a strong emphasis on e-health.

 

Offer Relevant Content for Consumer Engagement

But once they’re wearing the device, how can brands collect specific data so they know how to target consumers? 

The challenge is generating enough engagement so they’ll willingly share their information with you.

“There’s a driver behind every behavior, and each consumer has a different driver” says Macin. “You just have to identify their motivations and categorize them. For example, if your goal is physical performance, we’ll offer you the tools to have more endurance. If you’re concerned about your health, we can measure your BPM to protect your heart. The challenge is generating enough engagement so they’ll willingly share their information with you. You have to put the right cards upon the table, and the decision is theirs.” 


Luis Macin, VP E-Commerce at Nestlé Mexico, will be one of the dozens of brand marketing innovators present at Portada Miami on June 4, 2020. If you are interested in participating in Portada Miami and/or in Portada’s networking and knowledge-sharing platform with brand marketers please contact us here.


Nestlé’s Safe Bet on E-Health Products

Nestlé’s R&D is hard at work on e-health initiatives in Brazil, Latin America’s unofficial innovation hub. Monica Meale, Head of Nestlé Health Science LATAM told NutrIngredients “NHSc has strongly invested in digital innovation. In the last three years, the area increased its investments fivefold”. The company’s research focuses on developing market trends including e-commerce driven products and services, digital innovations (VR nutritional education videos as an example), virtual sign language assistants on websites and contests for Nestlé to collaborate with health startups in creating and designing health programs and activations.

Is Wearable Technology Expected To Drive E-Commerce?

Absolutely. As consumers receive custom-made specific information about their care, they will also receive specific recommendations and tailor-made nutrition plans that will drive e-commerce simply because it’s convenient. According to Luis Macin, Nestlé plans to offer users a holistic experience by incorporating themselves into the consumer’s lifestyle through wearable devices. And once they’re engaged in improving their health through the right diet and lifestyle suggestions – Nestlé’s product recommendations are only one click away. Ordering products will be as easy and embedded into their routine as their morning coffee. While we’re not quite at that level of e-commerce maturity yet but the focus on wearables for consumer metric collection and blending this with e-commerce opportunities is projected to be the next big frontier. 

Once they’re engaged in improving their health through the right diet and lifestyle suggestions – Nestlé’s product recommendations are only one click away


Luis Macin, VP E-Commerce at Nestlé Mexico, will be one of the dozens of brand marketing innovators present at Portada Miami on June 4, 2020. If you are interested in participating in Portada Miami and/or in Portada’s networking and knowledge-sharing platform with brand marketers please contact us here.