ECOMMERCE TRENDS 2014

Transcription

1 ECOMMERCE TRENDS 2014

2 ECOMMERCE TRENDS FOR 2014 The content in this ebook was adapted from a 3-part webinar series presented by Demac Media and Tenzing on ecommerce Trends for This ebook is broken up into three parts highlighting the challenges merchants often face when growing their ecommerce business. By reading this ebook you ll be able to learn how to leverage these key trends for your own success. Part 1: Attracting Shoppers To Your Site Step one for any merchant who is selling online is to attract shoppers to their site. In this section, we introduce some key marketing trends for 2014 such as retargeting and remarketing as well as ways to tackle shopping cart abandonment. Part 2: Keeping Shoppers On Your Site Now that you ve attracted customers to your site, what s next? Part two of this ebook dives into the strategies around keeping customers engaged with immersive content and responsive design. Part 3: Setting Your Site Up For Success Consumers are embracing digital technology and are using multiple devices at all stages of their purchasing cycle. Furthermore, one of the most important factors of a successful business is sustainability. In part three, we discuss the importance of Omni-Channel and CRM for B2C merchants. To view the entire webinar series, click here. ecommerce Trends

3 TABLE OF CONTENTS Part 1: ATTRACTING SHOPPERS TO YOUR SITE Retargeting and Remarketing What is Retargeting? Types of Retargeting Retargeting Platforms Part 2: KEEPING SHOPPERS ON YOUR SITE Responsive Design Mobile is Dominating Responsive Mobile Video Marketing in ecommerce Video 101: Misconceptions & Tips Taking Video to the Next Level Part 3: SETTING YOUR SITE UP FOR SUCCESS Omni-Channel Commerce Taking the e out of ecommerce Omni-Channel Strategies The Numbers to Back it Up Omni-Channel Challenges Customer Relationship Management (CRM) CRM Tools... 27

4 PART 1: ATTRACTING SHOPPERS TO YOUR SITE

5 RETARGETING & REMARKETING Ad Performance Is Declining If you look at the advertising landscape today, what you ll see is that ad performance seems to be declining. The statistics to the right are from Monetate ecommerce Quarterly, which were published in Q4 of They show YOY declines in ad performance from What you ll see pretty clearly through these stats, especially when we talk about forms of advertising like advertising, is that ad performance has degraded over this period. So in Q you can see that , in terms of conversion rates, is around 3.17% but in 2013 it jumped down to 2.95%. If we take a look at revenue share by traffic source, we ll see a couple percentage points drop between 2012 and 2013 for mediums like . However, average order value, is one of the fewer metrics that got better over this past year. But as we look at forms of advertising like search and social we re seeing an overall decline in performance, which is making it more difficult to get visitors to your website and in the numbers that we need, while still being affordable. Q3 Q3 Search 2013 Q3 Search 2013 Search 2013 Social Social Social 1.09% 1.09% 1.09% 2.95% 2.95% 2.95% 1.79% 1.79% 1.79% % 3.17% 3.17% Q3 Q3 Q3 Search 1.86% 2012 Search Search 1.86% % Social Social 0.69% 0.69% 0.69% % 2.53% Q3 Q3 Search 21.29% % Search 21.29% 2013 Social Social 0.22% 0.22% % 4.22% 4.22% Q3 Q3 Q3 Search 22.43% 2012Search 22.43% 2012 Search 22.43% 2012 Social 0.29% Social Social 0.29% 0.29% $ Q3 $ $ Q3 Search $ Q3 Search Search $ $ Social $81.44 Social Social $81.44 $ $93.43 Q3 $93.43 $93.43 Search $ Q Q3 Search Search Social $79.66 $ $ Social Social $79.66 $79.66 As we look at forms of advertising like search and social, we re seeing an overall decline in performance. ecommerce Trends

6 Search Is Getting More Expensive Another interesting statistic, this one from Adobe Digital Marketing Blog, is the cost of search advertising. This particular piece of research focused on Google s new Product Listing, and what it s showing is an 80% increase in cost year-over-year for a Google Product Listing ad. But if you look more closely at the graph you ll notice that most of the other forms of advertising covered in the research, like Google Text ads, Bing Ads, Facebook ads, also saw a slight increase. So along with that declining performance we re dealing with a climate where search and other forms of advertising are getting more expensive. ecommerce Trends

7 WHAT IS RETARGETING? One of the proposed solutions to these challenges (ie. ad performance declines and increased cost) is retargeting. But first let s start with what retargeting actually is. When you boil it down to the basics, retargeting is simply a way of focusing display ads on a subset of shoppers based on their behaviour. Another way to think about this is taking the strength of search, one of which is obviously relevancy, and marrying that to an ad medium like display advertising and showing folks those display ads in a much more relevant and meaningful way. There are statistics that actually show that display ad retargeting outperforms traditional display advertising by a factor of 10, so it s a very powerful tool when it comes to increasing the performance of display ads. converted traffic 2.5% non-converted traffic 97.5% }Re-engaging the 97.5% wherever they go (second chances) Now, when most people think about retargeting they predominately think of site retargeting. That is the ability to focus your display advertising on folks who have visited your website, like shoppers. One way to think about it is with the industry wide conversion rate of approximately 2.5%, that means about 97.5% of traffic hitting your website is non-converted. Another way of thinking about retargeting is that it s a method to re-engage that overwhelming majority of folks who have visited your site and not responded, and get a second chance with them. Getting an opportunity to give them exposure to your brand and to your messaging, through a relevant way through display advertising. However, that is not the only way of retargeting that s out there. There are other forms, which include search retargeting (the ability to focus display ads on shoppers who ve searched for particular products through search engines like Google and Bing), there are also forms of retargeting (which enable you to focus display ads on shoppers that have opened s that you ve sent to them), there s even the ability to focus display ads simply based on a list of addresses of shoppers you d like to focus your marketing on. So in essence retargeting is a way of connecting with a particular buyer across the number of different properties that they may be exposed to on a given day, eg. Social website like Facebook or a content site like Mashable and present them with ads that are tailored to them in very specific ways. ecommerce Trends

8 TYPES OF RETARGETING Below is a more detailed listing of the types of retargeting. Some of which we ve covered already: Site Retargeting, Search Retargeting, Retargeting. However, there is one we haven t talked about yet, but is also available, and that is something called Profile Retargeting. This is the ability to serve ads to people who are similar in characteristic to your best performing customers. This is a type of profiling that can be done based on demographics. Finally, there is List Retargeting, which serves ads to people on your lists. Type Site Retargeting Description Serving ads to people who have previously visited your store Search Retargeting Serving ads to people who searched for one of your keywords Retargeting Serving ads to people who have opened your s Profile Retargeting List Retargeting Serving ads to people who are similar to your best performing customers Serving ads to people on an list How Does Retargeting Compare? So how does this retargeting compare to traditional forms of advertising? Well, in one research study that was conducted by comscore of sites that had begun retargeting initiatives, they found a 726% lift in site visits within a 4 week period from the commencement of the retargeting program. They also saw over a 1,000% lift in branded search in that same 4 week period. And for those shoppers that were specifically retargeted they found that they were 70% more likely to complete a sale than shoppers that had not been exposed to those retargeting display ads. 726% lift in site visits in 4 weeks 1,046% lift in branded search in 4 weeks 70% more likely to complete a sale ecommerce Trends

9 RETARGETING PLATFORMS There are a variety of different platforms available that help you with retargeting, and we ve listed about 12 or so here. We also mapped them to the types of retargeting that are available on each of those platforms. So you ll find that everyone from providers like AdRoll to Triggit, to Monetate who offer site retargeting, through to providers like Magnetic, and Chango that offer both search and site retargeting. Then, there are companies like ReTargeter that have much more comprehensive platforms that offer site, search, and list retargeting. Retargeting Types Site Search Profile List Things to consider 1 Understand the reach of each provider you are considering. Does the provider align itself with the type of shopper you re after? Does the provider have access to the type of content, sites and social networks that your buyers typically interact with? 2 Examine the level of segmentation and personalization available on each platform Identify segments within your current audience space that you want to target. Know that, segmentation doesn t really help unless there s a corresponding ability to personalize experience for that segment. 3 Explore the vendor s ability to help with creative for your retargeting campaigns A platform with the biggest reach, sophisticated segmentation and personalization available, but if you don t have the creative to back that strategy up, very often that s where you see these projects fail. ecommerce Trends

10 PART 2: KEEPING SHOPPERS ON YOUR SITE

11 RESPONSIVE DESIGN 101 What is Responsive Design? By definition, a responsive website provides an optimal viewing experience across a wide range of devices. A responsive website adapts its layout to the viewing environment by using fluid, proportion based grids, flexible images and CSS media queries. What does that mean? In short, a responsive site is user friendly, no matter what the screen size or resolution. Customers visiting your site will always have a strong and positive user experience because your site will adapt to whatever device they re viewing your site from. When we talk about responsive design, immediately what comes to most people s heads is the mobile environment. As you can see above, responsive looks very nice, and very differently on different devices like tablets, desktop computers and mobile phones. A responsive website adapts its layout to the viewing environment by using fluid, proportion based grids, flexible images and CSS media queries. ecommerce Trends

12 Why is Mobile Friendly Design Important? Now talking about the need for responsive design and a mobile friendly design, why is that necessary? As you can see by the statistics below, over the course of the last year, and well into this year, mobile traffic and activity on your site is constantly increasing and it s becoming more evident that it s a substantial part of your overall traffic. Mobile Usage Soared in 2013 Over the last couple years, I m sure everyone has been hearing about mobile usage and mobile traffic and you can see that there has been a crazy amount of growth and excitement going on. Let s look back at YOY from how the growth is accumulating. What some of the statistics are showing (particularly from the IBM 2013 Holiday Benchmark Report) is how mobile usage has soared. Just looking at Cyber Monday of last year, 32% of traffic was coming from a mobile device or mobile environment, which is a 45% growth in mobile traffic YOY. When we think about websites and ecommerce we always think about sales, what percentage of sales actually came from mobile and what we can see here is 17% of online sales (which is a substantial amount) actually came from mobile usage, which is a 55% jump over last year. Now one last thing to mention that is very important to recognize, is the difference between a mobile (hand-held) device and tablet environment. At the very beginning of the mobile discussion we started hearing all about mobile, and both tablets and mobile devices were treated the exact same. But, what we re seeing more of, is that tablets are showing us a very different set of statistics. What you can see from last year s performance is that about 20% of site traffic came from mobile devices, only 5% of sales came from those same devices. Overall 12% of traffic came from tablets, and 12% of sales came from those tablets. This goes to show that traffic and activity from the site may come from more of a mobile environment, but if you re overall objective is conversion and sales then tablets are a very strong tool for you and you ll see a bit more success out of them than smartphones. ecommerce Trends

13 MOBILE IS DOMINATING Trends Since we re all working with smatphones in our pockets these days, mobile dominance has really tip toed its way into . The one really big thing to recognize is a majority of people last year actually opened on their phone rather than from their desktop computer. So when you re building an marketing strategy, recognizing the importance of mobile and responsive design is incredibly important. Other Benefits What are the other benefits of having a responsive design to accommodate the needs of mobile users? SEO Preparing for Customer Behaviours Planning for the future Streamlining content Best Practice - no longer considered nice to have The first benefit of having a responsive design, and one that doesn t get mentioned too often, is SEO. There is actually a very strong Search Engine Optimization benefit of going the route of responsive vs an alternate route. Google has declared it the best SEO solution for covering cross device activity and usability in their study. The next benefits are to plan for future and prepare for customer behaviour. Customers are starting to browse and shop more, as well as do more on their mobile devices. Giving your customers a responsive environment allows you to accommodate these behaviours. Keeping in mind, these devices are now showing up in different sizes and scales, so you re able to accommodate all of those scenarios, and types of activity. While we re all trying to accommodate the many types of activity, it s important to make sure that you don t have 14 different templates or websites to manage, so streamlining content into one environment that will respond nicely to different resolutions is a huge benefit to your online store. One thing to recognize, and it s why we bring it up as one of the most important elements of our ecommerce trends for 2014, is that responsive and mobile technology is no longer a nice to have when we re talking about new projects, this is becoming best practice and becoming a part of ecommerce 101. This should be a part of your overall ecommerce strategy! ecommerce Trends

14 RESPONSIVE MOBILE Every time we talk about responsive we also talk about mobile and it s very common that these two things get very intertwined. But the point we want to make sure that we get across, is that the strength of responsive and the importance of it being a part of your strategy isn t only because it s a strong fit for mobile. Responsive does not necessarily mean mobile. Responsive design is all about screen resolution and making sure that your site and your user experience is strong across different resolutions. Did you know that 99% of your visitors have a screen resolution of 1024x768 pixels or higher? People are looking at your site on so many different resolutions these days, that even if you just had desktop traffic, you still have to accommodate five, six, sometimes even seven different types of resolutions at the same time. The key thing to remember is that responsive has both a mobile strategy and an overall business strategy There are extremes, there s your desktop environment and your mobile environment. What s important to recognize here is that there are different types of desktops and a variety of cell phones these days, and we haven t even mentioned tablets! The key thing to remember is that you re going to have this resolution frenzy on your hands and you want to make sure, that no matter how someone visits your site you ll be able to provide the best user experience possible! Responsive design is about screen resolution not just mobile devices! ecommerce Trends

15 Things to remember Site content must be optimized 1 - Images, marketing, content - Elements may need to be excluded: modals, mouse over effects 2 Browser specific testing - Some browsers don t like responsive tech What are some things to remember when you re setting your site up in a responsive environment? The first is that your site content must be optimized. The reason we bring this up, is because we recognize that many of us may be working with this practice already. When you re building a site in a responsive environment, you re no longer worrying about one scenario, you re thinking about mobile, and desktop and tablet, and 27-inch screens and small 800x600 screens, so you want to make sure that your content is optimized to handle all of those scenarios. This includes: your images, marketing content, all the different types of assets and resources you re going to be using on your site. At the same time however, you need to remember that all of these experiences will all be very different. There might be certain elements on your desktop environment that you may want to completely ignore on your mobile or tablet environment. For example, modals (pop-ups), and mouse over effects, can t really be used in a mobile or touch environment, so we like to make sure we avoid those things and take note of them. One last point to recognize, is that there are also many different browsers in addition to many different mobile devices and screen resolutions, that people are shopping on or browsing on these days. There are a minimum of 4, if you re thinking about Firefox, Chrome, Safari, and IE, that really should be considered, and then there are also all kinds of different versions of these browsers. When you re planning a responsive strategy, make sure you re taking each browser into account, and make sure you test across all browsers to make sure your experience remains strong in each one. Alternative to Responsive Design What if responsive design isn t your thing, or you re not quite convinced it s right for you? Well, there is an alternative: building a separate mobile template. Many sites actually want to drive the experience based on the device you re coming from. So if you re coming from a phone you ll see one experience, where, if you re coming from a tablet or a desktop, merchants might want to the customer something completely different. There are some pros and cons to this, but the real major differences are is that you re managing a completely different template to your site. So you want to make sure that you have different assets, a different user experience - it s really as if you re managing two different sites. Very often you ll see different URLs, such as an m.yoursite.com. Furthermore, these mobile sites are based off devices, so the size of the device doesn t change anything but it s how the customer sees you. So it s a completely different strategy and alternative, because you re not really seeing a real resolution change, it s only the customer that is seeing a difference if they re visiting your site from their mobile device. When you re building a site in a responsive environment, you re no longer worrying about one scenario, you re thinking about mobile, tablet, and desktop. ecommerce Trends

16 VIDEO MARKETING IN ECOMMERCE Is Video Effective? Probably the first question on everybody s mind is, is video effective?. We ve got some statistics to share with you from some real world Tenzing customers who have employed video on their site with some pretty incredible results. The first one we d like to talk about is Samsonite. We introduced video to their online store about a year ago, and began conducting some analytics, around the behaviours of people responding to video vs. other shoppers that weren t accessing video on their website. What they found was, visitors accessing mediums like product videos prior to purchase, were 6x more likely to buy from them. We saw a similar pattern with the online retailer Step2, they sell children s toys and associated items. Once implemented, Step2 saw a 174% increase in the likelihood that a consumer was going to buy if they had seen their product videos vs. those shoppers who didn t view product videos. Another interesting statistic comes from the B2B online retailer Bizchair.com, they office furniture, predominantly office chairs, and when they introduced video what they noticed was that the shoppers who were viewing videos actually represented 33% of their online store revenue. 6x more likely to buy 174% more likely to buy 33% of online revenues What Do Shoppers Think? If you re thinking about implementing video on your site, consider what shoppers think of the video expeirence. Based on a research study that was conducted with a thousand consumers, it was found that 57% of consumers felt more confident about purchasing if there was a product video available. Furthermore, 45% of those who viewed videos are more likely to return and buy more from that retailer. We not only saw an up-tick in conversion but also an increase in customer lifetime value. Lastly, consumers watching videos said they were 41% more likely to share the product video with others (ie. family, friends, coworkers etc) and thus help to spread word of mouth of that retailer. So along with conversion and customer lifetime value, we see the viral aspect of video really having a dramatic impact on shopper behaviour and the top and bottom line of retailers. 57% are more confident about purchasing 45% are more likely to return to buy more 33% are more likely to share product videos ecommerce Trends

17 VIDEO 101: MISCONCEPTIONS & TIPS Common Misconceptions And Obstacles When considering going down the path of introducing video to your online site, there are common misconceptions and even obstacles that merchants can face: Video Production Tips Keep video content short Describe the benefits of your products 1. Video creation is too time consuming. 2. Video creation is too expensive. 3. How do I measure the effectiveness of video? We re going to get address some of these misconceptions and challenges with how to get started with video in the section below. How To Get Started With Video Our recommendation is to do it yourself in the beginning rather than investing in platforms and other expensive approaches. This is a great way to minimize cost. When you go the DIY route, it s really important to start small. So we recommend that you start with one or two products as an initial test. As a part of this test you want to compare certain statistics like time on page, and conversion before and after the introduction of video for those particular products (or even use A/B Testing!). One consideration when viewing analytics is to adjust for seasonality, you don t want to be caught in the trap of your before picture being off peak season and then your after being the on peak holiday season, this would skew your statistics. So it s very important to make sure you re adjusting for seasonality as you re conducting your analysis! In terms of specific tips for video production as you re going the DIY path, it s really important to keep your video content short. Statistics show that most consumers only watch product videos for 2-3 minutes, so a video at that length is totally appropriate for your test. The other benefit of keeping your video content short is that it helps lower production costs, so you re able to conduct your test with a minimum amount of investment in time and expense. Last important tip is to ensure that you re describing the benefits of your products and not just the features. The example we like to use here, is taking a page from QVC, the online retailer we all remember from the 80s. When actors are pitching products, they give them an innocuous object like a pencil, and they re coached to work very hard to actually pitch the benefits of that object. For example you wouldn t say that the pencil is yellow and you can use it to write, you would pitch the benefit that the fact it s yellow. For example, when you re looking for a writing instrument, yellow is a great colour because it stands out and you can get the pencil really quickly. That s just one example how you can begin to pitch your benefits! ecommerce Trends

18 TAKING VIDEO TO THE NEXT LEVEL Now, once you get past the initial DIY phase, and you ve conducted your testing, there are a number of different approaches to taking it to the next level. There are a variety of different platforms on the market from solutions like LiveClicker to Treepdia, and Invodo, which are software platforms that you can use to help in the video production and distribution process. As you look across the top of this table, these are what we consider to be the important characteristics that you want to measure and also align with your own specific needs. Video Marketing Platforms Self Service Auto Full Service Video SEO Analytics A/B Testing Embedded Shopping When discussing video production, there s a range of video productions available, everything from self service solutions to platforms that automatically create video content for you, to more full service solutions where vendors shoot product videos on a larger scale within a studio with actors. Along with video production capabilities, make sure your vendor can help with search engine optimization. SEO is becoming incredibly more important; especially since search engine providers like Google are beginning to display videos at the top of their search results. Thus, your video should be properly indexed to take advantage of the changing dynamics in the search landscape. Analytics is of course always important, so make sure these platforms have built-in capabilities to analyze the effectiveness of your video in terms of views, conversions, etc! Very often platforms also offer A/B testing capabilities, as well as embedded shopping. For those of you who aren t familiar with embedding shopping, it is the actual ability to incorporate a click to buy component within your video. So you can have your video running and then you have a call to action within the video, the customer can click, they re taken to the latter stages of your shopping cart where they can purchase the product direct from the video through your shopping cart and in a pretty seamless fashion. We usually like to highlight one or two providers from this list, and the two that stand out for us are Live Clicker, and Invodo. ecommerce Trends

19 PART 3: SETTING YOUR SITE UP FOR SUCCESS

20 OMNI-CHANNEL COMMERCE In this section, we ll be discussing strategies behind setting up your site for success. There are many ways to do this, and many different strategies to consider, but since we re discussing trends for 2014, two important ones we want to focus on are: Omni-Channel Retail and CRM. We re going to kick it off with a high-level look at Omni-Channel and some of the things we want to consider here, then we ll deep dive into CRM, which you ll see has a deep connection to overall Omni-Channel strategy. What is Omni-Channel? Omni-Channel is the next evolution in multi-channel retail. It s not secret that brick and mortar stores are not the only channel in which we re doing business. We have ecommerce sites, mobile sites, social media, and so on. Multi-channel retail is really the idea that we re conducting business on many of these different channels. Now the thing to remember, is that Omni-Channel isn t different, it s just the evolution of multi-channel strategies. Omni-Channel focuses on the seamless approach to the customer experience, through all these different channels. The key word is seamless. This is what makes Omni-Channel different. In today s world, customers are actually expecting the same marketing, the same strategies, the same branding, and their entire experience, no matter which way they interact with your business, to be the same on all these different channels. It s no longer a nice to have or something that s kind of there every now and then, it s becoming the standard and is expected through many different interactions. So let s walk through an example Imagine you walk into a store, you make a purchase, and you join that company s loyalty program. As you re walking out of that store, you re likely to receive an on your smartphone that you re now a member of this program, and there will even be a link to download their app or log into their mobile site to check your account, transaction history, and your status of your membership with their loyalty program. Now every time you buy from this company, whether this is in their store, on their site or through any of their many marketing communications, it s all tracked in your account. And lastly, you discover that sharing your purchase with your friends on Facebook or by tweeting by it, you can get extra loyalty points or referral points from their loyalty program. This is what seamless means. It is happening now, and everywhere you are communicating with or touch base with that company, it s all being tracked and is felt like one global relationship. ecommerce Trends

21 TAKING THE E OUT OF ECOMMERCE This is why company s today are stopping to look at their channels different silos in their business, like comparing online sales to in-store sales, or a digital marketing campaign to a print marketing program. What taking the e out of ecommerce means, is that we re starting to view all of these different channels as integral parts of our business. You re not going to be hearing things like mobile commerce or ecommerce anymore, but simply, when we re talking about business and commerce as a whole. You re going to be recognizing that we ll be talking about all these channels and entities of business. Omni-Channel Strategies 1 Shared Inventory 2 In-Store Fulfillment 3 Marketing & Promotions 4 CRM When talking to our clients and partners who are trying to get their feet wet in the world of Omni-Channel, there s a few different strategies we talk about initially before we get deeper into more intense ones. Shared Inventory The first thing we often talk about and look at is the cost of shared inventory and even in-store fulfillment. Now, the key element here is to allow all your different channels to either pull from the same or somewhat the same inventory. An example would be if you were to buy online, the inventory that s considered to fulfill your order would not only be what s assigned to that online store but inventory from a brick and mortar store where you able to maybe fulfill those orders, or just multiple fulfillment centers that you may have across the country. In some cases, companies will actually take their entire company inventory, if they re able to from a technical standpoint, and assign the online order to be fulfilled from the most logical spot. ecommerce Trends

22 OMNI-CHANNEL STRATEGIES Shared Inventory... continued When we say logical spot we re talking about the store that may have the inventory needed to fulfill this order or where the shipping cost would be the lowest. For example we have one customer, where if you re ordering from the West Coast, one of their largest stores from that geographic area will fulfill that order for you as opposed to fulfilling it from the East Coast and therefore decreasing the charges for cross-country shipping. What merchants are even doing in some cases is splitting the shipment so it can be fulfilled from different places. This is of course a requirement for your ecommerce platform and your back-end platform, but it s very useful to accommodate your customers in any which way! What this also allows you to do is offer the customer in-store experience, if you don t have the physical inventory in the store they re visiting you can still place that order for them and have it fulfilled either through the website or a different brick and mortar location. You can offer the option to ship to the store they are visiting, or to their home, and in Canada in particular, Demac Media has partnered with Canada Post and built an integration for Magento that allows you to ship products to the closest Canada Post office to your customer s home. These kinds of functionalities are all available with that shared inventory approach. In-Store Fulfillment Pick-Up In-Store Now the concept of picking up in-store is a slight deviation of the last topic we just mentioned (ie. shared inventory / in-store fulfillment). The systems are talking to each other, and all your systems talking will know what items are available in what stores, with what inventory. So picking up in-store gives customers the opportunity to browse online and purchase their goods, but go in to the store to try it on, or test it out and maybe make some exchanges or changes if that needs to happen. This is also a huge advantage because you know your customer is coming into your store, you have the opportunity for up-sells, cross-sells and building that customer relationship between that sales person and the end user. What you re also offering, is in-store information online. So if a customer who wants to window shop online or on their mobile device and then comes into your store to buy which sadly is still more common than you think, offers a great marketing opportunity as well. A lot of people look at their ecommerce site or their mobile site as strictly a sales opportunity but forget that it s also a branding, merchandising and marketing opportunity to get your customer s eyes on the product before coming into your store! A pick-up in-store option is great from a customer service standpoint, but also beneficial for your customers because it allows them to know what s available before they come into the store. The one thing that usually causes some challenges is in-store fulfillment. This is something that doesn t get resolved very quickly. Many of our clients say managing personnel and operations are factors that contribute to this challenge. ecommerce Trends

23 Marketing and Promotions When looking at marketing and promotions, the strategy behind building marketing programs across multiple channels is probably something you re doing already. It doesn t mean you can t be channel specific, so in some cases a free shipping promotion for an online order is available, but the idea is that when visiting your company in any which way, the marketing space stays true when seeing it across the board. When your customers go to your mobile site, or talk to you through Twitter or Facebook, you want them to get the feeling that they re dealing with the same person. What social media has provides is a personal relationship with our customer, so it would be a shame to lose that by not having that the same message and that same comfort brought across the different channels. Customer Relationship Management (CRM) Now CRM is something we ll cover in detail later in this ebook. But we don t want to ignore the impact that Omni-Channel has on CRM and vice versa. Loyalty programs are a great example of something that if someone is going to benefit from a loyalty program in-store or online or through social media, they want to make sure that everything they re interacting with has the same benefit thus a need for a loyalty program is to make sure they re interacting with you, and come back to you. Your efforts to communicate with your customer, even if it s to provide information across your channels needs to be consistent, which is why CRM is such a strong tool. ecommerce Trends

24 THE NUMBERS TO BACK IT UP Omni-Channel Successes As Omni-Channel has become much more important, the ability to pick-up in-store is being offered on more sites. Companies who do offer in-store pick-up are noticing a strong percentage or even a majority of orders that are coming from online/mobile, are being picked up in-store. Approximately 40-60% of all online transactions are being picked up in store. Canadians in particular still have that preference of browsing online, and buying their item in-store. So pick-up in-store has really increased online sales as a channel and then driving in-store traffic as well. Through the Pick-up In-Store Omni-Channel Strategy same report, we re able to see that 40-60% of all online Customer retention is companies who have a strong omni-channel strategy are seeing 3x the transactions 3x higher amount of customer retention than those companies with a weaker Omni-Channel strategy. 3x the customer retention! That is a huge and drastic number. Take a minute and think about the effect that this statistic would have on your company. 3x the amount of people are coming back to see you more often. Now looking at the chart on the bottom right, this one really caught our eye. It s incredibly interesting because it shows the percentage of US shoppers who use a combination of online and in-store channels when making their purchases. Electronics and Toys being at the top of the list is no surprise, but what caught our eye is the information in the bottom right. The lowest incidence of Omni-Channel shopping for these categories was approximately 16%. 16% is still a very large part of your business. What we re seeing is that when offered an Omni-Channel experience impacts a strong enough number this can simply not lead north. If you look at the different kinds of categories that we re seeing (cleaning products and food & beverage) these are still what we call newer categories for the online world. So we can only expect these numbers to grow. But the average across all these 12 categories was 37%. That means 1/3 or 1 in 3 people on your site are using Omni-Channel to help make their purchase! ecommerce Trends

25 OMNI-CHANNEL CHALLENGES When considering an Omni-Channel strategy it s critical to consider and analyze the various challenges that might be associated with this type of program: Challenge #1: Organization From an organizational standpoint, for an Omni-Channel strategy to work it s imperative that you re internal organization is ready to change and adapt. Your in-store personnel as well as customer service reps are going to be dealing with customers who will be coming in to return or pick-up items or even have an issue with what they saw on the web. Like we saw earlier in this ebook, social media has allowed us to talk to our customers on a one-to-one relationship and build that personal relationship. So treating all of your different channels with this level of importance means that your customer service staff is going to need to know how to react and talk to them through all these different channels. Your marketing strategy and fulfillment processes are also going to need to be updated. If we look at one of the examples of managing your inventory across an entire chain, how you manage that fulfillment process from the end user to your stores, may have to adapt to accommodate to the flow of orders moving back and forth between all of the different channels. Now it s important to note this because if you don t have that internal culture that thrives on adapting and changing implementing an Omni-Channel strategy is going to be a strong challenge for your business. Challenge #2: Technology This flows nicely into what we think can be the greatest challenge when it comes to Omni-Channel, as well as one of the biggest hurdles you will face in general: technology you have backing your business. First, it s very important that your systems are talking to each other because no human being can manage all of this without the help of automated systems. This includes your ecommerce Platform, ERP, CRM tool and any other software you have. When we discussed inventory sharing earlier, none of that would be possible without your ERP and ecommerce system constantly talking to each other, including your POS, and making sure all the information is shared. Data is the greatest gift that we have the digital age, and not using your data is the biggest mistake you can make. So without systems in place to track what s going on across all these different channels, you re going to lose out on taking advantage on this kind of strategy. Challenge #3: Internal Strategy Even though you re probably doing a lot of this now, it s still hard for some companies to plan and build a new strategy, while taking all these new channels into consideration. Every department from marketing, to allocation, to buying, need to adapt their process to accommodate this evolution of business. This all goes back to your internal organization to make sure everybody is on board, and everybody is ready to make this change to help build up your strategy. If you re not trying to build strategies to accommodate the multiple channels that you are on, even if you don t have a responsive site or a mobile app or a cross channel program, just thinking about the fact that people are communicating with you through these channels is the first step to redefining your internal strategy. ecommerce Trends

26 CUSTOMER RELATIONSHIP MANAGEMENT (CRM) CRM CRM, which stands for Customer Relationship Management is the model for how your company interacts with your current and any future customers. So a proper CRM strategy and the technology to support it allows you to manage your relationship and communication with your customers throughout every stage of their interaction with you. CRM should be keeping an eye on your marketing, your sales, the overall support of that customer and everything in between. The key item here is data and its tracking. You want make sure you know what they re doing and you can monitor your practice around it. Why CRM is Important in Omni-Channel Customer Lifetime Value Personalization / Segmentation Marketing Planning So, why is CRM important in 2014? Well, we ve got to come back to Omni-Channel, first and foremost, every strategy that we ve discussed in this ebook impacts your relationship with your customer, and it s Omni-Channel s biggest win. The customer lifetime value is a common term heard in the digital world, and the reason is because you can now know what this value is. Recurring customers, marketing interactions, conversions and impressions can all be tracked, kept and allow you to adapt your strategies around the lifetime value of that customer. This on-set of data tracking allows for personalization of our customer s experience and segment them into smaller groups for marketing purposes. We live in a world where people are expecting the experience they have with a company to be tailored to them. So with a strong CRM strategy, you have all the information and data you need to build a personalized experience for your customers like product offerings or recommendations, and you get to segment your customers based on their purchase history, shopping habits, demographics, or click through data which allows you to optimize all of your marketing efforts like , and search engine marketing. ecommerce Trends

27 CRM TOOLS Lastly we want to take you through a few CRM tools. There are many out there. If you Google it, you ll find dozens on your search engine results page, but we want to take you through some of the bigger ones that we find very useful. Salesforce is by far the market leader among the cloud based CRM providers. It s appropriate for a range of industries and business practices. Netsuite, is also another market leader, they provide a different breadth of features including forecasting sales, marketing reports etc. OroCRM is one that you have might not heard about, but it s one that we are very confident and believe very strongly in. It s an open source platform founded by some of the original creators of Magento, and it s been built with multi-channel business in mind. So the product includes customer segmentation, data integration, marketing productivity, sales management, forecasting for all the different channels we ve been talking about today, and in depth reporting on all those tools. The last thing we want to mention when it comes to looking at CRM tools is to take a look at your current ERP and ecommerce platform, because they actually likely have a basic to even fair sized CRM tool included. Often companies don t take advantage of what they currently have natively in their system. We work very closely with Magento, and to use Magento as an example, we have a lot of clients who come to us and don t realize that they re not taking advantage of what Magento s CRM has to offer! This CRM tool allows you to create customer attributes, it comes with default ones out of the box, but it also allows you to create customer segments that are based on all the things we were discussing above, i.e. purchase history, so you can personalize your customer s experience. So while there s a lot of amazing tools out there, it s very important that you keep an eye on what you currently have, because there s a very good chance that you re not taking advantage of what s at your finger tips now! ecommerce Trends

28 EXCITING THINGS TO COME Key Trends 2013 was an exciting year for ecommerce, and 2014 will continue to push the limits of what s possible, while gain significant traction on what was popular or up-and-coming from To recap this ebook, we feel the biggest trends for 2014 will be: Next up, retargeting strategies are a great way to overcome the overall decline that we ve seen in ad performance lately. Keeping in touch with your customer over the web is a great way to stay top of mind with meaningful and relevant ads! With a variety of platforms to get you started, retargeting has become a great resource for merchants looking to expand their marketing strategy and improve conversions Responsive Design Retargeting Video Marketing ecommerce is effectively selling through a photo, and a photo can only tell you so much. Give your customers more confidence and greater detail with product videos! They don t have to be large productions, a simple 1-3 minute video even shot with an iphone can do the trick when starting out! The more avenues you give your customer to explore your product the better. 4 Omni-Channel 5 CRM Why? With more people shopping on their smartphones and tablets, responsive design is no longer a nice to have for your online store. Any serious contender in the world of ecommerce must recognize that in order to provide the best possible user experience, websites now must adapt to multiple devices for optimal viewing! Although Responsive Design was a hot topic in 2013, we feel that 2014 will be the year that retailers actually implement this strategy for their design and user experience practices. Customers now actually expect the same marketing, strategies, and branding, throughout their entire experience whether they are shopping in-store or online. Unfortunately this isn t usually the case for most merchants. However, Omni-Channel does just that, it helps to bridge any gaps between business channels and gives the customer that consistent, seamless experience they ve now come to expect while shopping. Expect to see Omni-Channel become a larger growing trend, this year and next. Finally, CRM ties nicely into Omni-Channel because it s all about how you are managing your relationships with your customers. Keep track of order histories, customer serivce calls, and more. Get an inside look into your customer, and provide them with the personalized experience they deserve! ecommerce Trends

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