Can ecommerce help my business? Why should we make this investment? Why now?
These are just a few of the questions that are asked when we speak to clients about ecommerce. Our answers vary, but there is always one constant. The best reason to invest in an ecommerce presence is the simple fact thatecommerce is growing faster than offline sales. If your company is looking to increase sales, it is essential to sell online.
How do we know this?
According to the National Retail Federation’s (NRF) “First Look”, recapping 2013 and predicting trends for 2014, the average growth in online retail sales year-over year is 29%. Compare this to ShopperTrak’s report that physical retail stores only saw a 2.7% increase in sales, with a 14.6% decrease in foot traffic. The NRF anticipated even greater growth in 2014, with eCommerce sales reaching $300 billion.
In addition to the growth in actual online sales, online-influenced sales—sales where people researched online before ultimately heading into the store to make the purchase—was estimated at $1 trillion in 2013, and is expected to grow in 2014.
This type of data is invaluable in helping to determine the best “first step” for a potential ecommerce initiative. When you can anticipate how your audience prefers to purchase, you can better determine the need for and type of ecommerce platform, as well as the features and functionality to suit the needs of your customers.
The Mobile Impact
As smartphone and tablets continue to grow year over year, consumers continue to teach retailers that they will indeed buy with these devices. IBM’s Online Retail Holiday Shopping Recap for 2013 shows that smartphones accounted for 26.6% of all online traffic this past holiday season, and tablets accounted for 15.3%. The evolution of technology has provided the means for the majority of shoppers to find alternative ways to purchase without relying on the need for a physical location. The game is constantly changing and the maturation of consumerism is impacting how it gets played.
However, with 16.5% of all actual sales coming from tablets, and only 9% coming from smartphones, it seems that mobile is for researching, and tablets are for buying. Perhaps the reason is, as suggested by the NRF’s report, that the mobile shopping experience is “overwhelmingly disappointing” for customers. While the report notes that customers seem willing to suffer through poor experiences to make a purchase, it also predicts—perhaps optimistically—that retailers will invest in their mobile eCommerce experiences in 2014 to reduce the inconsistency between mobile, eCommerce, and retail channels.
With the maturity of responsive website development taking precedence on how best to accomplish building a website that provides a seamless experience regardless of device, it is arguably no longer a barrier or a crutch for these etailers to rely on.
Increasingly, we see a stratification amongst etailers from those that plan a digital marketing strategy and execute at a high level to those that still lack a cohesive strategy and/or execute poorly. There is room for improvement across the full spectrum of digital channels, and the impact these channels have is growing year over year.
Social media played a major role throughout the 2013 holiday shopping season, according to the IBM report, with Facebook and Pinterest referrals commanding over $100 per order on average, with Facebook’s conversion rates exceeding those from Pinterest by nearly 300%.
Also, while IBM didn’t share numbers of how effective push notifications directly to consumer phones were at driving sales, average daily installs of retail notification apps grew by 23%—which suggests that consumers were at least willing to see what retailers had to offer.
Getting ahead of the needs for crafting a digital strategy to support marketing efforts is paramount to achieving growth on the channel. The best laid plans for supporting holiday sales are made in the first quarter so that personnel, partnerships, and content are in place well before they are needed. A reactive approach can easily result in negative results and subpar performance on the channel. Proper planning is essential to smooth execution.