Why it's Time to Drop the 'E' in E-commerce

September 6, 2019

By Bryan Forbes

Dmi T/Shutterstock.com

Continual retail evolution and seamless buying has become the way people expect to shop. Because disruption at retail is a constant, finding growth in this connected world is a challenge as the fundamentals themselves are changing.

 

Shoppers Are Humans and Humans Are Shoppers

At its core, shopper behavior hasn't changed much: people have a want, a need, and the desire to consume. Yet the classic fundamentals of the sales funnel no longer apply as people shop at their own convenience — anywhere, anytime, anyhow. With this, we see an explosion of purchase options that don't fit into a linear path, with winning retailers giving shoppers the proper tools to make informed purchases on their own time.

For example, younger consumers are no longer looking to buy clothing by type (sweaters, jeans, tops) and are now looking to create full outfits that reflect an image, role or outward persona they're seeking to emulate. So, the apparel industry is giving shoppers entirely different ways to buy as brands shift to personalization and curated selections that are delivered via occasion-based marketing (i.e. Target creating pop-up departments around high-volume time periods).

 

Behavior Shifts Cause Store Format Shifts

E-commerce grocery sales have risen (eight percent) and quick trips have grown to encompass 50 percent of all grocery trips. With this, retailers have been forced to re-evaluate store formats and SKU assortments around this new convenience-oriented shopper.

This new shopper mindset requires retail alignment based on three key step-changes that further "humanize" product offerings both in-store and on the virtual e-commerce shelf.

  1. "Value" transference: A fundamental shift from sole price association to more of a variable factor based on self-gratification and what the product "does" for the shopper
  2. Routine simplification: Online grocery pick-up, services like Instacart coupled with easy to use of digital tools are changing in-store formats
  3. Self-reflective shopping: Retailer apps now allow more reflective shopping based on the "how and what" people shop for

Although connected shopping reflects the best opportunity for retail growth, statistics confirm that physical stores still draw a majority of all trips. Therefore, a mix of bricks and clicks is required to capture this high-value omnichannel shopper, that represents only seven percent of all customers, but a four-times larger (27 percent) share of sales.

 

Key Pillars of a Connected Commerce Experience

In a complex shopping environment, the simple truth is that people don't shop in silos and manufacturers must respond holistically. It's now time to drop the 'e' from e-commerce and manage businesses seamlessly, as one commerce. This demand is no longer a nice to have; it's a must have as shoppers now expect a variety of solutions to meet their needs.

As seen initial 2019 retail indications, shoppers seek convenience, experience and seamless buying based on the following:

  • Personalization: by leveraging a blend of retailers and manufacturer data to inform and drive shopper offers and experiences
  • Fulfillment: by driving convenience for shoppers and closing that "last-mile barrier" through optimizing business operations
  • Retailer Media: engagement on on-platform retailer media networks (Walmart Media Group/Target Media Group) to supplement off-platform and brand media efforts with messages driving conversion and maximizing brand presence within the long-tail of the digital shelf
  • Multi-channel engagement: ensure you're keeping the total experience in mind, supporting behaviors across desktop, mobile, voice, and AR/VR to respond to the ever-changing shopper needs

 

Harnessing Data

Some major retailers are starting to bill themselves as technology companies to narrow the Amazon gap. In doing so, they're having to harness multiple data sources to go one level deeper, thinking about product assortment, fulfillment and logistics. Essentially, they're honing in on the promise of precision retail where data sits at the center. Embodying this data-first approach, the core tenets of connected precision retail then become:

  • Continually keeping items in stock
  • Predictive buying behaviors (potentially based on AI)
  • Consistent data driven digital content (fostering engagement)

As one major CPG marketing executive put it, "As traditional marketers, we're trained to manage brands at the macro-brand level. With online sales/e-commerce, you must manage at the SKU level. None of us were trained to work that way." With digital commerce driving 82 percent of total market growth, it's clear retailers need to act on changing shopper behaviors and look at the full connected commerce picture.

The future of retail requires a mix of bricks and clicks where data and the in-store experience are coupled with choice and consistency online. And, as with anything in today's hyper-convenient retail world, appeasing shoppers' needs for immediacy delivers on the promise of a truly connected retail experience where commerce no longer needs an 'e' in front of it.

 

Bryan Forbes is VP of strategy and planning at IN Connected Marketing.


The views and opinions expressed in Marketing Maestros are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.


You must be logged in to submit a comment.