What’s Next for Brands in E-Commerce? 1WHITE PAPER

We have officially entered the era of e-commerce, where the percentage of people who make purchases online is outpacing those who don’t. Nearly four out of every five (79%) Americans shop online, as do 64% of China’s 731 million internet users and 60% of Europeans. This growing proclivity for digital shopping means the doors have been opened wide for brands, once tethered largely to wholesale and resale, to try a variety of selling options. Online retail stores and e-commerce marketplaces have made it easier than ever to sell direct to consumers, leverage authorised resellers or use a mix of omnichannel strategies.

But there is a catch: The time for testing is done.

Back when we conducted our 2015 survey with Retailing Today, 93% of branded manufacturers’ and suppliers’ products were being sold online. No doubt that number is higher today, with even luxury brands bringing digital “buy now” buttons to $45,000 items. Once-emerging channels like Google Shopping and Walmart.com are now full-fledged selling machines with millions of loyal consumers.

This means that it’s time for brands to get ahead of the game — which can be challenging, since the one constant in e-commerce is change. Today’s top-performing e-commerce strategies may be tomorrow’s lessons learned. So, the question to answer is...

WHAT’S NEXT FOR THE INDUSTRY?

As e-commerce continues to be reshaped at a rapid pace, there are six critical components that all brands shouldbe watching.

What’s Next for Brands in E-Commerce?

Introduction

What’s Next for Brands in E-Commerce? 2

In the modern e-commerce economy, consumers are no longer passive buyers — they’re influencers and advocates who want to build meaningful online relationships with brands. Today’s shoppers choose the brands that engage them on their passions and interests 42% more often than they do those that simply urge them to buy, and are heavily influenced by an array of touchpoints ranging from word-of-mouth and brand websites to search engines and social media. This trend is what Google and Ogilvy call the new “path to purpose,” and it’s one factor among many that are leading consumers to chart increasingly complex journeys to online purchases.

To get a sense of how much more those journeys may continue to change, consider what’s already happened since the early years of modern e-commerce:

In 2000, nearly 20% of shoppers made purchases the first time they heard about a brand. By 2015, that number had shrunk to 1%. Meanwhile, the average number of touchpoints it took for a person to ultimately buy more than doubled, from two to five.

As consumer journeys continue to take sharp turns, staying top of mind will mean staying ahead of evolving trends. Key drivers to watch include:

Customer Connections1

1. MOBILE COMMERCE,which is growing three times faster than traditional e-commerce. Fifty-one percent of Americans purchase products on mobile devices — as do 63% of China’s smartphone users, where the annual growth rate of mobile commerce is 30%. In the UK, smartphones are causing an unexpected surge in online buying. According to Google, 76% of people who do a smartphone search for a nearby business visit within a day, and 28% of those searches result in purchases. What’s more, 82% of smartphone users say they consult their phones on purchases they're about to make in a store.

2. OMNICHANNEL SELLING, which allows brands to assist a full range of purchase-ready consumers with different shopping preferences. In countries like the UK, 67% of millennials and 56% of Generation Xers prefer to purchase on e-commerce sites rather than in-store. Whereas in the US, one report says that 64% of Americans prefer to purchase some products in physical stores.Even the staying power in brick-and-mortar stores is taking on a different meaning. Some 46% of consumers now webroom, or research products online before buying them in-store, and 69% showroom, or evaluate products in-store before buying them online.

3. CHANNEL DIVERSITY,which removes roadblocks between brands and consumers. Today’s consumers are interacting with a wide array of channels, from e-commerce websites to marketplaces to social media to comparison-shopping engines. Six in 10 internet users will start a shopping “trip” on one device but continue or finish it on a different one. Brands that are noticed — and remembered — are the ones that appear in not one or two but all of their key channels.

What’s Next for Brands in E-Commerce? 3

As consumer paths to purchase become increasingly complex, several e-commerce strategies make it exponentially easier to reach them.

Solution

WHERE TO BUY TECHNOLOGY According to a 2017 ChannelAdvisor Brands Survey, 73% of brands use their website to provide information, but only 36% of those brands are directing visitors to retail partners where actual purchases can be made. Where to Buy changes this. By using your e-commerce website to connect customers directly to products on marketplaces and authorised retail sites, you can blaze a direct trail to product pages.

Where to Buy Online connects brand websites directly to product pages on retail partner sites, and can even be used to add items directly to shopping carts on authorised retailer sites.

77% of surveyed organisations increased qualified sales traffic from their websites to online purchases with retailers using Where to Buy: Buy Online.

[Source: TechValidate survey TVID: 17E-B77-C43]

Where to Buy Local adds functionality to brand websites that allows visitors to quickly locate brick-and-mortar stores within close proximity that carry your products. With Product Locator, brands can take this a step further to have nearby in-store selection displayed as well.

LOCAL INVENTORY ADSLet brands show shoppers in-store stock information for local brick-and-mortar stores the moment they search for items on Google. Shoppers are more likely to visit a store when they can check on the availability before heading to the retailer, and local inventory ads mean brands can be visible to shoppers online at the time they are ready to shop in-store.

What’s Next for Brands in E-Commerce? 4

Relationships with Retailers2

Do you know how much inventory your retailers have? Or if they’re over (or under) charging? Nurturing relationships with retailers will play an increasingly important role as brands work to maintain control over pricing and product integrity.

Consider the issue of minimum advertised price (MAP) policies, which brands use to encourage compliance with minimum thresholds for advertising the prices of products. One study found that just 20% of retailers always abide by MAP. Nearly 40% never do. And while non-compliance was highest among unauthorised retailers at 53%, even 15% of authorised retailers were found to violate MAP policies.

This issue can be traced back, in part, to the methods used for communication. According to a 2017 ChannelAdvisor Brands Survey, some 60% of brands are still using cumbersome spreadsheets to share product, pricing and promotion information with retailers.

Automated solutions streamline all necessary data into one central platform for easy viewing, whether you need to manage relationships with two, ten or dozens of resellers.

Solution

PRODUCT INTELLIGENCE offers at-a-glance, granular insights right down to the account, category and retailer levels — greatly simplifying the process of managing product data and monitoring pricing. Simply set the requirements you want retailers to meet, prioritise each element and then watch for gaps in product availability, price compliance and more.

What’s Next for Brands in E-Commerce? 5

Quality of Product Content3

In today’s e-commerce environment, it’s not just what brands are selling but how they’re promoting products that matters. The quality of content is becoming more important across channels — and not just because of increased competition.

As attention spans continue to decrease in the digital age — according to one recent report, mobile technology has rendered consumers able to stay focused for less time than goldfish — it’s imperative that listings and promotions are optimised to capture attention quickly and compellingly. The average clickthrough rate on Google Shopping, where “set it and forget it” approaches are common, is barely above 1%. But there’s a lot of potential for conversions to climb much higher with quality product listings, whether on Google and Bing, Amazon and Walmart or Facebook and Instagram.

The 2017 ChannelAdvisor Brands Survey revealed that 50% of brands receive requests from retailers for better content. And now, there’s an easy way to provide it — to these resellers as well as many other channels.

Solution

PRODUCT CONTENT OPTIMISATION (PCO) allows brands to provide better content to retailers, search engines, marketplaces and more by optimising the right mix of keywords, descriptions and other key data. This technology is designed to ensure product information is quickly and accurately mapped to the correct fields on each advertising and comparison-shopping engine. Pulling from ChannelAdvisor’s many years in e-commerce, PCO ensures brands get the most out of each product listing on every retail destination or ad network.

What’s Next for Brands in E-Commerce? 6

Marketplace Management4

When brands consider e-commerce marketplaces, the first thought is often Amazon — and with good reason. For years, Amazon has been the shopping destination of choice for millions of consumers worldwide. In 2016, 55% of consumers began their product searches on Amazon, compared with 28% on search engines and 16% on retailer sites. Ninety percent checked Amazon even when they found the product they wanted on another e-commerce site.

Now, things are changing. The e-commerce marketplace giant is experiencing increased competition from others: namely eBay, Walmart and Walmart-owned Jet. Around the same time Amazon’s stock started to dip, Walmart’s online sales were increasing 63%. The New York Times described Amazon acquisitions as proof that “the online retailer is on a collision course with Walmart.” CNN Money told Amazon to “move over” as Walmart.com’s 29% revenue increase outpaced Amazon’s 22%, and GeekWire pointed to Walmart’s $3.3 billion Jet.com deal as a reason for Amazon to “look out” for the competing marketplaces’ “big growth in online sales.”

Meanwhile, eBay is on the upswing with 171 million active shoppers and new strategies for retaining and re-activating buyers. Reigniting a commitment to help brands “start, optimise and grow” business in the modern e-commerce economy, eBay is building out features to help brands maintain a competitive edge. Examples include price and restocking guidance to keep sellers informed when items are not competitively priced or are running low, and eBay Guaranteed Delivery, which allows qualified sellers to show up in search results based on fast delivery times.

Brands that have relied heavily on riding the wave of Amazon success may soon be in for a rude awakening if they don’t begin to evaluate options for a diversified marketplace presence, be it through their own seller accounts, partner retailer accounts or both.

With the steady growth of marketplace popularity, establishing a presence on a wide range of channels is any brand’s best bet.

Solution

CENTRALISED MARKETPLACE MANAGEMENT makes it easy to take advantage of every marketplace opportunity. Because the ChannelAdvisor platform is built around a single integration point, it’s easy to manage product data, juggle inventory, handle fulfilment, automate repricing and manage orders on over 90 marketplaces around the globe. And don’t overlook the possibilities for cross-border trade. Worldwide retail e-commerce sales are projected to top $4 trillion by 2020, with many consumers hungry for foreign goods.

What’s Next for Brands in E-Commerce? 7

The Sway of Social Commerce5

Social commerce may still be in its infancy, but this is one movement that’s quickly gaining momentum. Between 2013 and 2015, global social commerce revenue increased 500% from $5 billion to $30 billion. Some 74% of consumers rely on social networks to guide purchases, and 56% of people who follow brands on social media do so to view products.

The growth of social commerce means that the ability to translate brand visibility into product availability is becoming an essential component of successful e-commerce strategies. This is proving to be especially important on several key social media sites.

On Pinterest, 93% of the platform’s 150 million monthly users are turning to the app to plan future purchases. More than half (55%) of US consumers use Pinterest specifically to find products, and 64% look at items they’ve pinned — often through product Rich Pins — while in brick-and-mortar stores. Facebook Dynamic Ads generate approximately one million store visits a day in 100,000 locations, while 64% of Instagram users say they discover new products on the platform and 75% say they’ve taken action after being inspired by a post.

Given these numbers, it’s easy to see why brands rated Facebook, Pinterest and Instagram as the most effective social channels in the 2017 ChannelAdvisor Brands Survey.

Solution

CHANNELADVISOR SOCIAL COMMERCE empowers brands to build out strategies for effectively reaching consumers on the sites where they’re actively seeking inspiration and ideas. After getting set up with social platforms once, you can manage Pinterest, Facebook and Instagram campaigns from within one centralised platform designed to keep brands up-to-date on the latest ad formats, requirements and best practices. Special reporting tools and cross-channel analytics make it easy to fine-tune social advertising based on product-level performance.

Online retailers are saving as much as 20 hours a month and growing social revenue by up to 25% with ChannelAdvisor’s Social Commerce Suite.

[Source: TechValidate. TVID: 048-455-DE0 and TVID: 362-049-510]

What’s Next for Brands in E-Commerce? 8

The Power of Big Data for Brands6

With today’s technology, brands now have access to more data than ever before. Used correctly, this mountain of insight can be hugely beneficial. But too often, critical information around consumers’ and competitors’ behaviors are either in the hands of resellers or too overwhelming to act on.

Even with all other solutions in place, a lack of access to information that’s easy to understand at a glance can make it difficult, if not impossible, to accurately adapt products, pricing and promotions to meet the changing needs of consumers.

By leveraging billions of dollars in transaction data in the form of bite-size insights, brands can stay ahead of trends as they emerge and evolve.

Solution

CHANNELADVISOR BENCHMARKING offers a series of customisable dashboards that can be used to gain at-a-glance insights and make more informed decisions about your brand. Pulling from $8.1 billion in gross merchandise volume (GMV) data from some 2,900 retailers and brands, benchmarking allows you to examine your own performance and see how it measures up to the competition. It’s the best way to turn e-commerce big data into results and ROI: Use benchmarking to monitor your strengths, weaknesses and opportunities on marketplaces and Google Shopping.

What’s Next for Brands in E-Commerce? 9

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Connect and optimise the world’s commerce

Connect and optimise the world’s commerce

ChannelAdvisor is a leading provider of cloud-based e-commerce solutions that enable retailers and branded manufacturers to integrate, manage and optimise their merchandise sales across hundreds of online channels including Amazon, Google, eBay, Facebook and more.

Conclusion

Brands have more opportunities than ever before to reach consumers. But to remain competitive, strategies will need to be regularly reassessed and updated as long as the e-commerce industry continues to evolve at a rapid pace. With over 16 years of experience and more than 2,900 customers, ChannelAdvisor can keep you ahead of the latest trends and ensure you’re maximising every opportunity. We make it easy for brands to connect with customers, optimise operations and grow sales channels.

To learn how ChannelAdvisor can keep your brand at the cutting edge of e-commerce, email us atDETEAM@CHANNELADVISOR.COM or call +49 (0) 30 700 173 253

+49 (0) 3070 0173 253WWW.CHANNELADVISOR.DE

DETEAM@CHANNELADVISOR.COM