The eCommerce Catch-22: How to solve the Paradox of Growth and Profitability.
Hello, hope you are all well. Really nice piece by?McKinsey & Compan y explaining the paradox of modern ecommerce:
“Getting to breakeven in e-commerce has proved elusive for most companies because of its tremendous complexity: retailers must connect the dots between growth and cost levers and align incentives across the organization.”
Retailers that overemphasize e-commerce revenues could actually be damaging their prospects. Indeed, digital growth is not enough; only profitable digital growth will create value. Since e-commerce is a significant contributor to growth for most retailers, they must not only have a strategy for how to generate more growth from this channel but also ensure that the strategy creates value for the organization.
Also a nice artice on the Future of eCommerce: https://www.the-future-of-commerce.com/2023/02/02/how-to-improve-e-commerce-profits-2023/
Looking back to the early days of e-commerce, today’s challenges should be no surprise – brands need to focus on what it really takes to improve e-commerce profits in 2023.
How to improve e-commerce profits? Thanks to Sustainable & profitable e-commerce.
Let’s imagine how this new approach could revolutionize my shoe shopping experience, boosting my loyalty and customer lifetime value to the brand, while increasing the profitability of each transaction.
2. Innovate beyond the UI to build new business models
3. Entice me to behave in a more sustainable and cost-efficient fashion
Below you can find more MarTech news:
Redpoint Global announced new research that reveals how consumers really feel about brands using Artificial Intelligence (AI) and Machine Learning (ML) to influence their experiences. While many consumers (45 percent) expressed a lack of understanding of how these technologies are being implemented, the majority of consumers (73 percent) believe there is potential for impact on customer experience (CX), particularly in digital settings. Nearly half (48 percent) of all consumers say they would interact with AI more frequently if it would make their customer experience with a brand more seamless, consistent and convenient. The survey found 77 percent of consumers believe positive customer experiences still need an element of human touch, and 58 percent of consumers say they want companies to be clear about when AI is being used. The interaction between humans and AI must be flawless as well. If consumers sense disjointed communication with AI across channels, 76 percent say that they are less likely to trust and continue engaging with a brand.Consumers rank chatbots as the most ideal use of AI to improve the customer experience, but 70 percent prefer human interaction over chatbots.? In addition, 57 percent of all consumers think the pandemic has greatly increased acceptance of AI across many industries. There are several positive impacts consumers highlight as important in the use of AI, for example, 54 percent of consumers think AI can help brands keep personal information safer and more secure.
These are some of the results from research by the European Commission. The study included 399 online stores in 23 countries in the European Union (EU). Nearly 40 percent of online shops in Europe uses so-called ‘dark patterns’. These are ways of encouraging customers into making a purchase under false pretenses, such as hiding costs and false countdowns. 148 partake in at least one misleading technique. The European Commission also looked at the apps of online shops. Out of 102 apps, 27 employ at least one dark pattern. Hiding important information happens most frequently: 70 shops use this tactic. This can be hiding delivery costs, the composition of a product or cheaper alternatives. For 23 online retailers, information was kept from customers to lure them into a subscription. In addition to withholding information, 54 websites used visual tricks or misleading language to refer to more expensive subscriptions, products and delivery options. As much as 42 online shops use countdown timers with false deadlines for buying a product.
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A global survey of 5,000 consumers reveals critical changes to consumer spending amid inflation and economic uncertainty. Consumers are thinking more critically about where they will spend their money in 2023, with 81% saying they will reassess their budget over the next 12 months. An economy plagued by inflation and staffing shortages has not lowered consumers’ expectations for top-notch service. Fifty-two percent, in fact, expect a better experience from their favorite brands as a result of the current economic climate. Consumers also expect brands to use their data to offer more relevant customer services, with over 60% reporting they expect companies to react instantly with the most up-to-date information when transferring across departments. Bolstering trust can also be an opportunity for loyalty; 76% of consumers say that companies that provide data security will encourage their loyalty.? According to 52% of consumers, poor quality service is the primary reason that prevents them from making a repeat purchase. Real-time data offers a path for companies that want to compete in this new economy and deliver the personalized experiences consumers expect.
Three quarters (73%) of UK marketers say they are not well prepared for the deprecation of third-party cookies, despite 92% believing that Google will stick to its 2024 deadline, finds new study by data enablement platform, LiveRamp, in collaboration with research company, Censuswide. Despite Google’s withdrawal of cookies being announced nearly three years ago, 60% of marketers are still developing their first-party strategies and 8% have no first-party data strategy. This is despite 45% of marketers looking to first-party authenticated data to combat the loss of third-party cookies. Marketers also flagged other concerns on their minds: 60% are troubled about reaching audiences at scale; 56% about frequency capping; and 50% about measurement. Delivering targeted advertising to individuals at scale on the open web, without the need for legacy identifiers, is the ambition of all marketers right now.? Furthermore, open web marketing continues to increase in importance, as a sizable majority of surveyed marketers (72.4%) stated that they anticipate spending more there moving forward.
Yext has unveiled the results of a new survey that reveals the extent to which consumers are struggling to find accurate information from brands online. The research surveyed 3000 consumers across Europe, including 1,000+ consumers in the UK, and found that on average, respondents say it takes nearly 9 hours for a typical customer service issue to be resolved. This is much higher than the expected time it would take to resolve an issue, which respondents put at 14.5 minutes. 82% of respondents reported that they would be likely to shop elsewhere if they experienced poor customer service. However, it is clear that many customer websites aren’t up to scratch with over half (54%) of respondents reporting that they have become frustrated searching on a company’s help site in the past month. Nearly half (47%) of consumers say they have been prevented from making an online purchase due to the help section of the website not providing them with the information they need. 24% report frequently purchasing products/services from rival companies because of unhelpful search functions. 67% believe that customer service matters just as much as product quality. Consumers are facing common issues when searching a company’s help site for support-related information: 42% say that help sites infrequently provide the answers they are looking for with their first search.
The number of U.S. adults buying on mobile is increasing, according to Forrester’s 2023 Retail Mobile Websites report. That data shows that 37% of U.S. adults use mobile sites to transact over the past three months, an increase from 29% in 2021.? The channel is not without its challenges, though. Citing data it collected in 2022, Forrester noted that a third of American shoppers who don’t make smartphone purchases said it’s because it’s easier to transact via computers. About a quarter (23%) said it’s because their screens are too small for shopping. The 2022 holiday season illustrated how vital mobile commerce is for winning over shoppers. Mobile shopping comprised over half (55%) of overall online retail sales on Thanksgiving, up 8.3% year-over-year, according to Adobe. Shoppers went on to spend 61% of online sales through their smartphones on Christmas.
Gross sales in Spanish ecommerce are expected to increase 20 percent by the end of 2023. The country is expected to generate 65.3 billion euros in sales, of which 17 percent will be generated by online sales. Especially the travel and electronics categories will increase. Likewise, it's estimated a 10 percent increase in online orders, between 5 and 10 percent in online spending and that mobile purchases will go from 60 percent in 2022 to an estimated 65 percent for this year. Spanish National Commission for Markets and Competition (CNMC) has reported that ecommerce in the country generated 15.6 billion euros during the first quarter of 2022. This is a growth of 25.3 percent when compared to 2021. According to the data, the fashion industry increased the most with 7.3 percent of the total sales. Travel agencies (increase of 7 percent) and financial intermediation services (increase of 6.1 percent) also increased their turnover. This growth resulted in a total of over 312 million transactions during the first quarter of 2022.
The survey, conducted by Pantheon and Hanover Research, asked more than 1,000 U.S. and U.K. consumers to share what they expect from their digital experiences. Consumers said a brand’s website is its most important digital touchpoint, with user-friendliness (87%) and speed (81%) as top expectations. Ability to contact a brand through preferred methods (66%) and a modern website and/or mobile app interface (64%) also are important to consumers. The study also uncovered the lengths to which savvy consumers will go to avoid sharing personal information with brands that haven’t earned their trust. Nearly half (48%) say they use guest checkout in online transactions to avoid providing data, and 42% won’t create a user profile. Personalization also proves polarizing for consumers; 48% of those who prefer generic communication say it’s because they don’t want to be tracked. For marketers targeting Gen Z, the dynamics are even more difficult. Only 35% of these consumers are willing to share their data with brands. Consumer reluctance to share personal information is not the only barrier marketers face. Negative digital interactions, experienced by 90% of respondents, also erode trust. In fact, more than half of respondents (51%) stopped engaging with a brand altogether following a negative interaction.
Digital Commerce 360 and Bizrate Insights surveyed 1,060 online shoppers in January 2023. They asked what website features or attributes should be in place to drive conversion. Topping the list were free shipping (69%) and the right price (66%). 13% cited the ability to finance orders, paying in installments.? Trust in the brand is central to conversion and, while a given, its high 46% penetration coupled with a prior purchase or subscription by 43% also are central to buying. When shoppers become members of loyalty programs, this also speaks to a greater likelihood to convert for 28%. The overall user experience is core to conversion, as 40% noted. Shoppers embrace speed. A fast checkout was a must for 32% and a fast-loading site for 21%. Finding what you need is critical to a successful shopping experience as 24% cited site search that returns relevant results. Shoppers often need more information, and that’s when easy access to on-site customer service can be invaluable, suggested by 21%. Online shoppers (19%) now want the ability to contact customer service in multiple ways, including text and social. Online shoppers expect fast shipping (61%) and desire guaranteed delivery times (39%), and both impact conversion. Personalizing the site experience should be a priority given its potential to drive conversion. Locations where personalization converts best include personalized search results (32%), the homepage presentation (28%) and the welcome message (16%). The product page is an important decision-making location, and recommendations based on prior buying (24%) and browsing behavior (22%) can be productive as well. Cart abandonment emails should be activated given their ability to remind shoppers of past browsing. They resonate with 20% of respondents, while post-order emails based on prior behavior see traction among 11% of those surveyed. It is important to note that some online shoppers have no interest (22%) or don’t like personalization (12%), which retailers should consider.
Online revenue in the Netherlands has decreased 7.6 percent in 2022 when compared to a year earlier. The major differences can be explained, among other things, by the corona-related lockdowns in 2021. At that time, many physical stores were closed and consumers had to find their products online. Inflation has reached a record high in 2022, which makes consumers more reluctant to make online purchases. In December, the Dutch total retail turnover was 11 percent higher than a year earlier. On the other hand, turnover from online stores declined by 11.1 percent. Pure online stores raked in 7.7 percent less that month. And omnichannel sellers had a revenue decrease of no less than 15.2 percent. Online stores in the non-food and electronics categories in particular had a hard time. Electronics retailers saw their turnover decrease by 17 percent. Non-food online stores generated a turnover of 18 percent lower.
Greg
Loyalty Growth para #retail #eCommerce y agencias | Commercial Manager & Strategic Partnerships | Marketing Automation | Generador de oportunidades | Consulting | Ventas | Networking | CRM | CDP | Mentoring
1 年More sustainable than profitable? Or should some of them sacrifice a bit of one for a piece of the other? How difficult is to find the balance sometimes Thanks for sharing Greg !
Digital Marketing OPS
1 年"I more than resent it, sir. I'm absolutely incensed." - such great idea for the post title!??