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My attendance at last week’s ecommerce expo was an experiment of sorts. A 2-day blitz around Blighty was a milieu of meetings, presentations with a side of sweet potato wedges and kale chips (keeping my tech/hipster credentials in check here). I went to see what’s new and left feeling stoic. In the UK it feels like we are reaching a plateau of sorts. The consumer follows the hedonistic mantra of better, faster more and we think given this frenzy that we need to follow them down this path. It is time to slow down and ask yourself, is your strategy achievable? Or more simply put is it the right strategy given what we now know about the world of ecommerce?
All ecommerce growth coming from tablet and mobile with growth expected to drop to single digit across the industry at large in the coming months ahead.
Mobile sales growth static for 2 consistent quarters for the first time ever (42% of sales coming via mobiles. Driven by phone as opposed to tablet).
Shift in mobile conversions is based on larger screen sizes on phones. Smartphone conversion has risen to approx 2% versus tablet at around 4% and general e-retail at 5%.
Split of desktop versus mobile is more mobile focused now and moving to phone over tablet.
The market is maturing (Slowing growth). 37% of e-retail leaders believe this. Single digit market growth to follow in months ahead.
Consumer electronics experiencing no growth outside Black Friday and is creating a margin squeeze on the category.
Conversion rates on the rise slightly and mobile following suit - again larger screens helping. Pureplay retailers conversion is around 6% (based on unique, not total visits)
Delivery options are moving towards next day as a standard option. 52% of people abandon because of delivery cost/lack off options at check out.
eMail marketing is still the biggest direct marketing cost for companies - 14%. Social media less than 1%. Outside of adwords is still the single biggest revenue driver, based on spend.
Retention is still a challenge with a fragmented approach to how people invest in retention strategies. The average retention rates on customers is around 30% which is about a 5% increase since Q1 2012.
Black Friday 2014 Stats UK
Estimated £810m spent online on Black Firday, with 181m visits (combo IMRG & Experian Research).
17% of totalonline Christmas sales were during this week (estimated £3.7bn).
44% week on week increase in e-tail sales in w/c 23.11.
£720m spent online on Cyber Monday.
Net result on electrical sales was no growth this year, with the spike expected on Black Friday this year.
(Headline ecommerce Stats – September 2015-10-06 -- Source IMRG -- www.imrg.org )
It was hard to decipher what or who was useful to speak with last week for a multitude of factors.
My scepticism of such events, the inability for people to sell or showcase products effectively.
Were the audience the right people
Getting your name out there is great, but at what cost and time. If I were a vendor, I would be asking myself, what will this bring me next year. As a visitor it was worth it to get the IMRG stats alone. The numbers have a direct impact on my decision making, as it should yours. The ability to contextualise this within your business is key. We cannot beat the market, so figure out how best to ride the crest of that wave and to scale that.
eCommerce strategies will all be relatively the same, no matter which business you walk into. The plans to get there will have varied paths but for us in eCommerce, I think it is time to double down on the following:
Build logical processes in your business. If it doesn’t flow right offline, it won’t flow right online. The customer will be the person to feel the pinch when we get this wrong.
Do not over promise – just because Amazon prime has free next day delivery, don’t feel you have to. 43% of UK customers are happy with economy delivery – 29% want next day.
Understand your cost models and the marketing tactics you employ. The old reliable email continues to be the biggest spend but also the biggest direct revenue driver away from adwords. In 2014 email had a 14% contribution to revenue versus <1% from Social Media – so to that end we move on.
Be slow to recruit. Skilled workforce is still relatively small in numbers. Make sure you are hiring the right skill at the right time. Consider choosing strategic partners over internal building. Shared skills and learnings make for better vantage points to growth.
Cross border trade and marketplace selling continue to be great entry points to new markets and if used correctly are great ways to mine data. Use this to help shape your localisation decisions.
Measure twice cut once – applies to everything you do, always. Validate through numbers.
eCommerce is a strange old beast. It is a daily grind, where what works today does not work tomorrow and the clock always goes back to zero. Today, it is omni-present and the challenges we inherited will remain. The tricks of the trade have not evolved, because we have not. The move to invest in personalisation is an area to watch. But maybe not in the way we think it is in its present state.
Passive interaction through subscription models and connected homes will result in a need to think differently about ecommerce in a few years. Ponder this, CISCO systems CTO, Padmasree Warrior stated in the Dublin web summit 2014 that less than 5% of all devices we have are connected but within 10 years that number would jump to over 40%. Thinking about that is staggering and it also makes you wonder where that can push online retail. Partners will be key in getting there, have no doubt about it.
For today, get in and get the house in order, for soon it will be connected to everything.