This blog is part of a series about how and why retail brands must “earn the customer” – their trust and loyalty – to remain competitive in a digital world.
Do you own your customer relationships? Or are you the “Hanes” of your vertical, allowing major retailers and/or online marketplaces to call the shots when it comes to connecting with consumers? While a multi-channel retail strategy, including online marketplaces, is key for many brands to effectively reach their audiences, having a branded eCommerce site is critical for capturing and retaining customers as a competitive advantage, particularly as more shopping moves online, in part as a result of the global pandemic.
- Beyond price and convenience
- Online marketplaces
- Own your content and experience
- Don’t forget about that data
Beyond price and convenience
Your eCommerce site can no longer just be about price and convenience. Building a strong eCommerce site for your brand involves infusing it with lifestyle and educational content that helps to forge emotional connections with customers, foster customer relationships, build brand loyalty and increase customer lifetime value (CLTV).
We’re not just saying this because we’re an eCommerce agency! As more brick-and-mortar stores close, more consumers shop online, and more digital native vertical brands (DNVBs) pop up (think Dollar Shave Club or Allbirds), retail giants like Levi’s and Nike are shifting from wholesale to selling more goods direct-to-consumer – and an integrated, omni-channel approach. They’re investing in their eCommerce websites, as well as other online channels including branded storefronts on Amazon and Jet. Why? Gotta go after that growth. U.S. eCommerce sales continue to grow year over year, increasing 13.6% from 2017 to 2018, and nearly 15% from 2018 to 2019.
How fierce is the competition from digital natives? The 31 DNVBs that made the 2019 Top 500 retailers grew 29.5% in 2018, compared to 2017. Further, Internet Retailer and U.S. Department of Commerce data shows that web-only brands grew nearly three times faster than the overall U.S. eCommerce market.
Amazon accounts for more than a third of all eCommerce sales and it’s estimated that 82% of U.S. households have a Prime account, so Amazon can’t be ignored. However, an interesting survey found that 2018 was the first year that non-Amazon sellers grew faster than Amazon sellers on average. Perhaps this has something to do with the growing number of DNVB start-ups over the last decade? Or the increasing popularity of Walmart? Walmart reported its U.S. eCommerce business grew 74% in Q1 of 2020 due to the pandemic. Walmart also is partnering with Shopify to enable Shopify small business sites to sell to Walmart Marketplace customers. Approved sellers will be able to add product images and inventory to Walmart Marketplace through the Shopify platform.
Nevertheless, while marketplaces like Amazon and Walmart may be important channels for many brands (in a “frienemy” kind of way), the focus there is clearly on price – making investment in branding and customer experience on owned channels even more critical for brands to protect against price wars.
Even consumers who ultimately purchase on online marketplaces do research on other sites, making your eCommerce store an important component of the buyer journey. For example, a Bazaarvoice survey found that of the 76% of Prime Day shoppers who visited other major online stores for research and reviews before making a purchase on Amazon, 39% visited brand websites.
Own your content and experience
One key reason why digital natives are seeing success (beyond operational efficiencies and unique products or services, of course) is that they put a lot of effort into connecting emotionally with their customers. They typically have a compelling reason for being (e.g., save the environment) and a strong brand story that resonates with their target audiences (e.g., be a cool world traveller).
Nurturing this connection requires having control over the entire customer experience, in particular, the lifestyle content that tells the brand story, such as videos, blogs, social media posts, emails and more. Personalization and content curation are also big factors in maintaining good customer relationships. For example, 82% of Gen Z consumers said they would be more likely to purchase from a brand that provided them with relevant content. Also, 44% of them said they would cease visiting a website if it wasn’t personalized to their wants and needs. While third-party retailers, marketplaces or (gasp!) salespeople may be able to regurgitate content, like product descriptions and benefits, there is no way to manage a consistent or compelling customer experience if you entirely farm it out.
Don’t forget about that data
Data is the lifeblood of marketing – and for higher conversion rates. Delivering personalized content and recommendations to target audiences requires data, and you won’t get the rich data you need by selling only through third parties or having transactional-only interactions with customers on your eCommerce site. Also, as new data privacy laws come into play (e.g., GDPR and California’s CCPA), companies will have to be more careful about how they obtain and use third-party data. A branded eCommerce website allows you to track behavioral data first hand, as well as interact directly with consumers via chat, surveys, social and more.
A multi-channel approach can be important for many brands, but not at the cost of neglecting your owned properties, most significantly, your eCommerce site – which ideally should function as the linchpin of a more integrated omni-channel customer experience.