Expert View: 5 Big eCommerce Trends With Aaron Conant of BWG Strategy
The eCommerce landscape is changing faster than you can say "abandoned cart." Last year, eCommerce grew faster than at any time in the last 15 years. But rapid growth doesn't mean "easy." eCommerce trends are making it more competitive, margin constrictive, and fast-paced than ever.
With everything happening in the space, we took time to sit down with Aaron Conant, the Co-Founder and Chief Digital Strategist at BWGConnect, a networking and knowledge-sharing group of thousands of brands.
Aaron advises more than 500 eCommerce brands and leads more than 250 thought leadership events every year. Aaron sits at the cutting edge of trends and knowledge about Amazon, Performance Marketing, D2C, SEO, SEM, Supply Chain, Walmart, International Expansion, and more.
Here are the five main takeaways from our conversation on the world of eCommerce and eCommerce trends.
1. Leading Brands Are Looking for Ways to Shift Investment Away From Amazon
Amazon used to get high scores from brands all over the world for its ability to market, sell, and ship products better and faster than the majority of other marketplaces.
In 2017, Amazon's market share was growing rapidly, making up 37% of the entire eCommerce retail market's GMV (gross merchandise volume).
Experts were expecting the market share to reach 50% in 2021, but then came the pandemic.
In 2020, Amazon's share of U.S. online retail revenue started to dip. Why did it happen?
In March, Amazon suddenly decided to make a delineation between essential and non-essential items. They simply stopped shipping and ordering non-essential items for six weeks, trying to adjust to the COVID-19 environment.
Brands on both the 1P and 3P side of Amazon had large chunks of inventory locked up within the fulfillment centers of the eRetail giant on what seemed to be a very arbitrary basis. This caused executives across the board to re-align Amazon as part of their digital strategy, not the entirety of it.
Well before the start of the 2020 holiday season, Amazon was already operating its fulfillment centers at near full capacity. This posed a new dilemma for Amazon: for the first time, it was unable to provide enough warehouse space to meet customer demands for orders.
How do you best ration selection and inventory quantities to ensure the fewest people are disappointed?
It so happens that Amazon chose to make more inventory space available for those items that are considered giftable. For those brands that were not, they saw significantly reduced POs on the 1P side and reduced allocation on the 3P side.
With Amazon unable to efficiently ship their items and brick-and-mortar stores no longer a reliably safe option, eCommerce brands found themselves turning to DTC (direct-to-consumer) strategies.
Amazon has always made decisions that are most focused on their long-term strategy, not on how it will affect branded partnerships. Brands need to treat Amazon with a similar mindset. On a routine basis, consider how Amazon fits into your plans for growth and what other levers you are able to pull, including other marketplaces/DTC.
Note: While current eCommerce trends are shifting away from Amazon, it doesn't mean that this marketplace should be ignored. But instead of being the main digital strategy for eCommerce brands, it should turn into "one of the many."
2. Creating Top-Notch Digital Content
The phrase “Content Is King” has never been more relevant than in the world of eCommerce today. Over the past few years, many traditional brands have paid but a passing glance to their online content and the impact it has on marketing performance, conversions, organic search rank, and in the end, growth. Now, with the pandemic shifting consumers to the virtual realm at a record pace, the quality of content has become integral to survival.
From high-quality product images and SEO-optimized descriptions to educational content and 3D shopping experiences, the standards for user experience have risen rapidly. Failing to catch or maintain a customer’s attention will put you behind the competition; the search algorithms are built to send traffic to pages that actually convert browsers into buyers. Whether it is for an Amazon Brand Store, a Detail Page, or your own D2C site, creating the right content that inspires a purchase is table stakes.
And here’s the double whammy... If you’re spending a large budget on paid search, but your content isn’t on point, you are driving traffic to a page that will not convert. This will hurt your organic search ranking. That, in turn, will require you to spend more to get the same amount of traffic as before. The cycle only keeps repeating itself.
When it comes to eCommerce trends and sales, content is king. To hone your DTC strategy, it’s crucial to make sure that the consumer is getting a top-notch customer experience on your website and marketplaces. This involves creating stellar, engaging content.
No matter where you are selling products online, it’s worth setting aside the budget to ensure you have the highest quality, highly converting content. Thy payoff will come in the form of:
- A higher return on ad spend (ROAS) for your digital marketing campaigns
- Higher organic search ranking
- Overall increased conversions
3. Providing Various Payment Options
The 21st-century consumer is spoiled by eCommerce players vying for their attention. They want a seamless customer experience at each stage of the sales cycle, and a huge part of this experience is a variety of payment options.
Let's face it — it's easier for a consumer to click the "x" button and move on to another eCommerce brand than to look for their wallet. In fact, more than 75% of 18-29-year-olds don't even have credit cards, and this has driven a whole new genre of payment options. Most predominantly, this includes Buy-Now-Pay-Later (BNPL) options like Pay in Four.
With these options, the consumer is afforded a level of spend that is commiserate with their repayment accountability and increases over time. The payment provider pays the full purchase price to the branded site, less a service fee. Then the consumer pays back the full purchase price to the solution provider without interest.
It’s a fantastic offering that is being adopted at a skyrocketing rate. That's why to maintain a competitive edge, eCommerce business owners are implementing as many payment options as possible.
New companies are emerging to cater to the Millennials and Gen Z'ers. They include:
- And the list goes on...
Exploring these options today is essential to stay competitive in the eCommerce landscape tomorrow.
Times are changing. Because of these eCommerce trends, payment options are changing, as well. To maintain a competitive edge, you need to start implementing new options as they emerge. And again, it all goes back to conversion rates. To secure a sale, companies should provide as many payment options as possible.
4. Exploring Solid Fulfillment Services
Amazon's move last spring to shut off shipments of non-essential items had digital leaders sit up and evaluate alternative shipping options. They wanted to decrease their over-indexed reliance on the eRetail giant. In their search for a solution, what they found was one of the most important levers they need to pull to maximize their growth potential in the coming years: a Digital Age 3PL.
This rapid switch to dropshipping that occurred last year put a strain on traditional 3PLs. They were not equipped to handle small parcel pick-pack-ship projects at scale. As they struggled to do so, they charged through the nose for the service. As we went through 2020, more dropshipping was required, and adopting the right approach to 3PL (third-party logistics) solution providers was essential.
Consider the possibilities for growth, brand and price control, product offerings, kits/bundles, reduced shipping costs, marketplace expansion, etc., when you have a 3PL that was built for:
- Pick/pack/shipping at scale
- Kitting/bundling without updating your packaging lines
- 1-2 day delivery times
- Ability to list your entire catalog (including exclusive products/combos) on any retailer's website, marketplace, or your own D2C site
- Inserting marketing material
- Backing up your 1P inventory on Amazon
While some will attempt to build this out internally, for most brands right now, it’s best to find a partner.
To make sure your digital channels generate as much net revenue as your brick-and-mortar store used to, it’s pivotal to explore digital age 3PL options as an immediate solution while you evaluate building out the capabilities internally.
5. Adapting to the Online Realm
eCommerce brands that used to be guests in virtual territories are currently becoming permanent residents. Adapting to working solely online while battling the competition requires a serious overhaul of many of your traditional strategies, from marketing to fulfillment to content. It will also require a rethinking of your "build it vs. buy it" strategy.
Here are just a few of the things key eCommerce industry leaders are evaluating:
- Upping their SEO and SEM game
- Implementing fraud prevention tools
- Considering extended warranties to improve customer satisfaction
- Onboarding a shipping/logistics partner
- Implementing additional payment options
- Hiring agencies to help with digital marketing
- Exploring new markets, including international options (e.g., the Alibaba marketplace)
- Experimenting with new things like an R&D-type budget without an attached ROI
- Re-evaluating their dependence on Amazon and turning to DTC
- Hiring the new type of digital professionals required to continuously adapt to new eCommerce trends
- Plus a whole lot more.
Feeling at home online requires a serious adjustment of tactics and a significant budget. By exploring available options and reaching out to other markets, it's possible to maintain a competitive edge.
Keeping Up With the Latest eCommerce Trends
According to Aaron Conant, the key trend here is brands are aggressively looking to lower their dependence on Amazon when it comes to eCommerce sales. But the path to do this is not quick, nor is it easy. There are multiple scenarios to choose from, and there is not a one-size-fits-all playbook. This means your brand’s digital playbook is being written right now, in real time. You can write it or let Amazon do it for you.
At Threekit, we help provide top-notch product visualization software that improves customer experience and allows businesses to sell more. To learn how augmented reality and 3D configurators can improve your bottom line, schedule a demo today.