The slowdown of consumer confidence
110 years ago, the mighty Titanic went down – the speed and ferocity of its demise must have been as breathtaking as the conditions of the night if we try to comprehend what happened on that fateful night. In the world of consumption, we call life, the speed of the sinking is slower, but the hull has been breached. Since the turn of the year we have seen considerable uncertainty across many markets and this is translating into a slow down in spending by the consumers. Having them part with their pounds and pennies is getting tougher by the day.
I wrote this 6 years ago - again looking at how these cycles have their habits of creeping up on us. Over the last 3 years though, and in particular we have seen siesmic shifts. Things we are not used to. Why in eCommerce is it getting so many column inches? For 2 years now, we have ridden the crest of the good ship COVIDtraffic and not experienced what "normal" ecommerce is. But all is not lost - read on. History has a habit of shaping how we can think and evaluate what is going on around us. Strategy is up in the air - our diganoses are in however our core stategy, for the masses now, is survival driven. Without hitting the panic button, here are some tools and examples of how we cans till look to the long term with optimism, knowing the path in front of us, has already been trodden.
When I joined eBay in 2007, we were on the cusp of a global meltdown (never seen before?) and didn't know where to turn. Aggregators/Marketplaces became safe havens for retailers. Back then complex tech made it a cumbersome, IT heavy and resource intense process. Now it is about brand alignment and process - oh, and profit. But here we are, again at this cusp.
Consider your options for the next 6 months - eeking out "audiences" versus tapping into pre-motivated, pre-disposed customers - I know where I would focus.
Partnership as protection
This year we have seen tonnes of partnerships - across all continents and in almost every single industry. The most meaningful are happening at a macro level - consider the relationship between Shopify and its Martech ecosystem. Last year Shopify made it easier for tech co's to make more commissions under its payment structure, solidifying itself as the coolaid heavy, cool partner to build your world around. There is a danger, yes, that they might eat your lunch but what is evident is that alot of Shopify's kudos, strength and go- to - first kudos comes from within that community.
Watch for these other macro partner evolutions that I think we will see come onto our radar over the next 12months:
Klarna and it's influencer network. I wonder will I, as a retailer, be able to buy the service and pay later - am I dreaming too much?
Shopify and Shop app users - local shopping, local audiences, global currencies - It makes absolute sense that at some point Shopify will open this network up for media buying, maybe not to all segments but to smaller, less cash rich businesses, this could make sense. Without them bastardising their social partnerships
Retailer/Brand relationships with customers - Moving to first party or zero party data will prove challenging as most retailers or brands will not know what to do with it. The privacy changes will invaraibly create negative sentiment to personalistion - where we need to move that conversation is into relevance - RFM will win strong is customers and your own product are understood.
Retail Media Dressed as partnership
The surprising speed at which this category has risen has taken me by surprise. Without oodles of data, campaigns and mistakes, these #RMN are rife for bad news stories in 12 months. Retailers have not been developing algorithms for years to refine this process. Dunhumby, the data science arm of Tesco have at least been the ones placing ads on behalf of brand partners for quite some time, but to be agnostic to retailer needs is something they now need to be.
These networks have some interesting assets though - traffic and lots of it. Remember why Amazon is a better place to place ads than Google? Buyers go to Amazon, browsers to Google. Retail sites by their nature should become better places to play but the timing and funnel stage need to be factored in. That said, in times of necessity, invention and survial are closely linked.
In times of uncertainty the partner model works well – leverage competencies of others. In online retail it is no different. The notion you can be all things to all people is a fallacy. It’s time to sharpen your pencil and be better at your core skills than muddy the waters and try to recreate the wheel. And believe it or not, for the most part the hard yards are done. All the data is there. You have created it. Now it’s about connecting with the right partners.
You should be in control or your product mix – Can you say that today?
How can you make your data work well for you.
How do you extend your products time in the market,
at maximised profit levels for the longest period you can.
Oh that’s before Amazon get their hands on it.
They already have in most cases or at some point will.
You just need to understand how to control this and decide
at what point will they be part of your sales mix.
Simple logic suggests that you use your products and make
it available to consumers wherever they want it,
whenever they want it – not where you think it should be.
By the way, they can be in any country in the world,
on any time zone. Cross border trade means, you can reach
these guys – but what about my supply chain?
Nature always finds a way – are we not part of nature?
The shifts in supply chain management will be significant in the next 2 years.
It is cheaper to retain and harvest clients rather than buy new ones
The internet of things or (IoT) - This can be very simple – those who will win at IoT or the connected home are those who partner with our ubiquitous friends. Look at Philips lighting and their impending friendship with Apple to become the defacto lighting app on your phone. He who sells the most light bulbs wins. We will witness the advent of the Samsung kitchen in the next year or two also – oh and that will most likely connect to your local Asda, Tesco or that little corner shop that opened up Amazon Pick up stores. We will see many products trying to get into this space and many will fail. The horse is bolting fast in this space already. Time to get your sugar cubes ready.
Some core concepts are relevant, now more than ever.
Create your content – content was king remember –
Connect to the right partners. Physically and systematically.
Next up, take your direction and accelerate.
Hesitation can be costly, lack of direction even more so –
but consider now that the barriers to entry are as flat as they have ever been.
Pick up the phone and ask...