The growth of e-commerce was accelerated across the globe due to the pandemic and the measures that were implemented to curb the spread. Advertising investment has shifted into shoppable and e-commerce formats, and many companies have had to develop their e-commerce strategies on the fly. This is driving growth of the big platforms. But many brands are also going direct-to-consumer, gaining access to all-important first-party data, and the chance to drive repeat purchase.
Effective marketing in the age of e-commerce may mean new thinking in terms of some of the ‘basics’ – like packaging and pricing. It may mean new media choices and new internal organizations. Global marketing intelligence service WARC has released a new report that was created to help advertisers, agencies, and media owners navigate the challenges when building an effective e-commerce marketing strategy. Here are the key takeaways –
The acceleration of e-commerce
- Edge by Ascential, WARC’s sister company, has revised the e-commerce growth outlook for 2020 from +22.2% to +30.4%
- Brands in sectors such as FMCG are seeing rapid increases in online orders. They have a growing range of options to sell through.
- Marketplaces such as Amazon and Alibaba have seen exceptional growth, omnichannel retailers like Walmart and Target are expanding their online offering, and platforms like Shopify and Instacart have risen in prominence.
- Brands that currently don’t sell direct-to-consumer can partner with a combination of traditional omnichannel retailers, major online marketplaces, and pure-play operators to drive e-commerce growth.
Marketing goes back to basics
- Effectiveness in the e-commerce age requires a rethink of all the marketing fundamentals: product, place, and price as well as promotion.
- Brands are offering bigger packs and multi-buy options, at different price points, as they look to boost profitability out of online retail. Delivery is a new ‘moment of truth’ for online brands, with packaging a key touchpoint. Unboxing is a key brand opportunity to stand out.
- Meanwhile, direct-to-consumer brands with significant first-party data are rethinking their approach to driving repeat purchases. For these brands, the concept of customer lifetime value will become more important.
The shift to shoppable media
- E-commerce platforms like Alibaba in China and omnichannel retailers like Walmart and Target in the US are becoming advertising and media destinations in their own right. Amazon has seen record growth in the face of the COVID-19 outbreak with ad revenues rising 43.8% ($1.2bn) to $3.9bn in Q1 2020, as brands look for ad formats linked to e-commerce.
- Shoppable ads are now a key trend in digital advertising, with social platforms looking to extend their reach into e-commerce via shoppable formats and storefronts within their platforms. Many brands are rethinking the way their budgets are siloed to enable better investment.
The dangers of short-termism
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The rise of shoppable formats and e-commerce media is likely to accelerate the shift toward short-termism identified by researchers such as Les Binet and Peter Field. And that will only be compounded by recession.
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But there is also evidence that a strong brand is key to driving traffic, boosting the performance of direct-response ads and maintaining price premiums online. Balance is key – it’s not a question of investment in either brand or activation, but a smart blend of both.
The rise of live streaming
- Covid-19 has accelerated the growth of live streaming e-commerce in China: a powerful combination of influencers, video, social and online selling.
- According to Yimian, WARC’s sister company, the number of livestreaming users reached 560 million in China as of March 2020 – 62% of the country’s total number of internet users.
- Discount-driven and convenience-led, livestreaming is particularly suited to products that have a short decision cycle, such as food, fashion and beauty. Automotive and luxury brands are experimenting with livestreams, which is driving awareness and consumer engagement.
Wondering when livestreaming on e-commerce will hit the MENA region? Read our interview with Sachinn J Laala and Richard Nicoll from Liquid Retail to find out
