By Andrew Machin | Creative Director | May 2015
The digital marketing landscape is constantly evolving, not just in terms of technology and platforms, but also how digital plays its part in the consumer journey.
Google’s research into the Zero Moment of Truth (ZMOT) identified that multiple points of online research have become pivotal in the decision-making process for many customers. For instance, who these days would even consider booking a holiday without first consulting Tripadvisor?
Yet, nearly four years since it was published, many retailers still overlook engaging with these findings in favour of focusing on websites and formats of digital retail that focus purely on acquisition. Instead, they’re continuing to look purely to optimising traffic and conversion to move their business forward. The web is awash with highly-optimised ecommerce and retail sites that are great, as long as you know what you’re looking for.
Unfortunately though, with the evolution of the web and consumer and purchasing behaviour, it is possible to foresee some tough challenges ahead for anyone in online retail. Marketers should ensure they adapt to this changing environment; below are the three core challenges any online retailer needs to be ready for…
Being relevant to the consumer
To understand this challenge, we have to look back to the origins of ecommerce. Before the start of this new world, our engagement and decision-making was made offline. For instance, when purchasing white goods, we may have arrived at our decision in-store where we could engage with the staff.
As such, we created digital marketing strategies and websites built around a conversion model. The retailer pushes an offer, the consumer (hopefully) responds and then we optimise to convert them into a sale. This means that ecommerce and retail sites focused their design and function around the sale, with few offering anything other than the ability to purchase a product; not interacting anywhere else in the customer journey.
Over time, with the growth of audiences buying online and an increase in competition, retailers began to compete more and more to drive traffic through to their stores. This meant promotional channels became highly competitive and, as a result, increasingly expensive, but all too frequently, less and less effective as people began mirroring their high street behaviours, shopping around for the best deals.
However, not only did the number of consumers buying online grow, but they began to become more digitally ‘mature’. They started to use the web for more than just procurement and began to do more and more of their research for purchases online too. All this meant conversion rates steadily dropped and, over time, this has created an environment saturated by ‘offers’ optimised to convert but with an audience of which few were actually at the point of being ready to purchase.
Nowhere is this more prevalent than digital display ads. Around 5.3 trillion display ads were served in the US in 2013, up nearly 25% from 2009. The average click through rate on those ads stood at just 0.1%.
Why was there such a low click through rate? The simple answer is that 99.9% of those ads served just weren’t relevant to that person at that point; they are not ready to respond to an offer.
The challenge for retailers is, if following ‘traditional’ digital marketing, how you create a marketing strategy that appeals to an audience of which few are actually ready to buy.
The rise of retail behemoth Amazon has always been on the radar of anyone involved in online retail. However, looking at recent trends in consumer behaviour, we are starting to see a shift in how customers discover products, i.e. where do customers begin the research for their online purchases?
In the words of Eric Schmidt, Google’s chairman: “If you are looking to buy something, perhaps a tent for camping, you might go to Google or Bing or Yahoo… But more likely you’ll go directly to Zalando or Amazon, where you can research models and prices, get reviews, and pay for your purchase all at once.”
“Where did you begin the research for your most recent on-line purchase?”
In an online survey conducted by North American firm Technographics, they discovered that between 2009 and 2011, the number of customers beginning their research for an online purchase on Google dropped from 24% to 13%, whereas Amazon saw staggering growth from 17% to 30%.
Recent research by the Forrester group found that last year almost a third of people looking to buy something started on Amazon – more than twice the number who went straight to Google. This year those figures have grown even more; with 39% of consumers starting on Amazon’s site, compared to only 11% on Google.
“If you are looking to buy something, perhaps a tent for camping, you might go to Google or Bing or Yahoo… But more likely you’ll go directly to Zalando or Amazon, where you can research models and prices, get reviews, and pay for your purchase all at once.”
Eric Shmidt, Chairman of Google
Not only has Amazon’s Influence over consumers now surpassed Google’s when purchasing online, but it has also seen growth in its search volume of 75%, a stunning figure to say the least.
If you think you’re safe because Amazon don’t really compete if, for instance, you’re in the service industry, then think again. In the sites Amazon has already launched, their first productised service offering came in the form of ‘Amazon home services’, where you can find anything from someone to cut your lawn to someone to come and fix your car.
So, if up until now, you have thought Amazon isn’t really a competitor in the online space, ask yourself this question; is it likely that Amazon could encroach on your offering if they wanted to? If the answer is yes, then you should strongly consider working under the premise that they eventually will.
This presents a huge challenge for chief marketing officers and marketing directors involved in ecommerce/online retail and soon, even the service-based sectors. How do you compete when the consumer is now starting to go directly to Amazon on their purchasing journey?
Millennials, or ‘Generation Y’, refers to the demographic generation of consumers aged between 16 and 34, using birth years ranging from the early 1980s to the early 2000s. What makes this generation of consumers notable is that not only are they digitally native, comfortable with digital commerce as a matter of course, but they already have a purchasing power totalling $170billion per year in the US, surpassing their Generation X predecessors at $125 billion. This means they are fast becoming the most influential group of consumers.
U.S. Purchasing power by generation in billions
For retailers, this seems like great news with opportunity for growth. However, in a 2015 survey by Moosylvania that investigated the relationship between Millennials and brands, they discovered two very pertinent factors that affect the digital retail landscape.
Firstly, the survey found that this generation rejects the traditional model of advertising we have previously discussed. Instead, they prefer to engage and build relationships with brands. With buying power in the billions and rapidly growing, Millennials are clearly the kind of friends you want to make.
Secondly, in surveying the millennials’ favourite brands in 2015, Amazon now sits at 11th place, having overtaken Google in 12th. This further reinforces how likely customers are to turn to the retail giant in starting their purchasing journey rather than openly searching on Google.
Therefore, the challenge is that the emerging generation with such a strong growth in spending power is already moving away from discovering products on Google. How do you, as a retailer, lure this generation away from the already mighty Amazon?
How marketers should respond to this changing digital environment
As you can see, these three challenges are clearly linked in terms of how ecommerce and retail has struggled to move on over the years in line with online consumer behaviour, as outlined in the Zero Moment of Truth findings and how Amazon have capitalised on these behaviours, quickly becoming the ‘search engine’ for products. So, what should you as a retailer do to stay or become more relevant to a new generation of consumers and compete with the likes of Amazon?
Google knows this is happening and in an effort to hurt Amazon’s dominance are exploring the introduction of a ‘buy’ button that would appear directly in the search results. Whilst Google has had the functionality to redirect customers to the retailers websites for a while, the new button would try to imitate Amazon’s ‘buy now’ button.
However we can’t sit back and hope that Google alone can address all these challenges for us. So how do we be more relevant in our marketing and build relationships with a new generation of consumers to allow you to compete with Amazon?
In a nutshell; by engaging with the consumer throughout their customer journey rather than just at the point of purchase you can not only begin to add value beyond the Amazon experience but also begin to form meaningful and effective relationships with a new generation of consumers.
Engaging with your audience throughout the customer journey
As previously discussed; the most important aspect to consider is that not all consumers are ready to purchase. If we want our marketing to be relevant then we need to understand where our target consumers are in the overall customer journey. Let’s look at an example of how a customer decision journey might look and how you become more relevant through engaging at each stage:
Sometimes referred to as the ‘trigger’ in reference to the customer journey, the ‘awareness’ stage is where the customer becomes ‘aware’ of a need or desire and stimulated to start a journey to purchase.
These triggers can be stimulated by many different things, such as: your car has been written off, so you need to buy a new one. Or perhaps you have just remembered your wife’s birthday, so you need to buy her a gift, or perhaps you feel that a break from work is in order, and decide you want a holiday.
At this point in the customer journey, your multichannel strategy should be focused around reach, with the aim of getting your brand and proposition to be front of mind whenever awareness arrives.
Often the best tactic from to cement that awareness is through creative digital PR, social media and creative campaigns aimed at engaging your target audience. By creating memorable content, tools, games, stunts, events etc. will get your brand and its message in front of your potential customers and make you more relevant.
The customer has now been stimulated into action and they are starting down their path to purchase. Of course then the first action is to research products/services to help make their decision.
In Google’s ZMOT research it was identified that consumers will on average look at around 11 different points of reference for research for a given purchase – even higher for some products (often those with a higher ticket price).
And it is here that we can start to add value beyond that which Amazon offers. Brands have the opportunity to capitalise on the searches being conducted by providing consumers with the answers to their questions, even before they decided that they may have needed that tent, or whether they’ll go for the caravan instead.
Without question, this is where your digital marketing should encompass a carefully planned content strategy. By creating informational (or even inspirational, depending on your product or service) content you are showing Google that you are the best result served for that customer’s question at that time in their customer journey.
From your research into listening to your customers, you should have started to understand what questions your audience has around your product/service, so tailor your content strategy to focus on providing those answers.
The content itself may take the form of a series of articles, or just better information that features on the product or services page, or even a useful tool that helps the user to determine the best option for them.
Whatever form this content takes, ensure that it is designed to inform and/or inspire the customer, as this experience will start to ensure that they start to trust your brand and are much more likely to convert.
Furthermore, by adopting a good content marketing strategy that captures consumers this early in the path to purchase, you are able to start building the all-important relationship with the consumer by providing engaging and relevant content.
Once the customer has performed their research and has arrived at a purchasing decision you need to convert them to purchase.
This is where most online marketing focuses their attention – trying to get people onto the site and convert as quickly as possible. What brands need to understand, is that being useful at the research stage can help persuade the customer to buy from you. Why wouldn’t they? You’ve already been helpful, you’ve shown authority in your subject/industry, and there is a familiarisation with your brand.
By helping the customer during their research phase, you will have built a tremendous amount of relevance and trust – both of which are highly influential persuasion triggers.
Once the customer arrives at your site, you should then be providing a highly optimised experience that not only adheres to best practice. Make sure your website design is as good as it can be, as customers simply do not trust a poorly designed or cheap looking site and are likely to go looking elsewhere.
Again, platform is incredibly important. Learn about your customers and how they like to purchase – laptop/desktop, mobile sites or even a smartphone app, and optimise your conversion experience around their needs. Getting a fully responsive site not only helps with the user experience but also Google has explicitly expressed a preference to rank mobile optimised sites higher.
The experience of the product is a much overlooked opportunity in the customer journey to employ a marketing strategy. Frequently the relationship with the consumer ends with the conversion, yet there is then a perfect opportunity to then start to develop a relationship. A customer has now bought into your brand, and this presents unique opportunities for your strategy to:
Engage with the customer to create unique content you can use to feed the research phase
Encourage social content and interaction with social campaigns to help raise awareness
Find innovative ways of adding value to your product or service that will help you stand out from Amazon, which marry the online and offline experience; such as in-store mobile apps or other engagement campaigns
Build the customer profile, learning about how they used the product, which helps better personalisation campaigns and builds a relationship with the consumer
Through engaging with your customers from the very beginning of their journey, you should now be armed with the information and insight you need to understand what keeps them coming back for more.
From this insight you can start to develop personalisation profiles that would take all previous interactions with your brand into account, to provide optimised marketing and achieve maximum retention.
For instance, if you know that a customer bought a phone from you, should the next thing they see when they revisit your website be another phone? It’s highly unlikely the customer is now in the market to buy another phone, but they are very likely to buy accessories for instance.
By using personalisation, you can create digital experiences that are not only unique to that customer’s purchases and preferences, but also where they are in the customer journey and help to build relationships with the consumer.
Customer engagement should be at the heart of all your digital marketing activity
By really getting to know your customer, their decisions and motivations, you can start to develop a digital marketing strategy that can engage and influence throughout the customer journey, not just at the point of conversion.
This engagement allows you to not only establish yourself as relevant early in the customer journey, but also to build relationships with a growing and powerful audience of online shoppers as well as giving you opportunity to provide value to the customer beyond the Amazon experience.
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