Three E-Commerce Retail Trends We Are Seeing In 2019

Three E-Commerce Retail Trends We Are Seeing In 2019

Three E-Commerce Retail Trends We Are Seeing In 2019

Amazon wants to be the marketplace, for everyone and everything. And it seems to be working. So should you even build an e-commerce store of your own, when Amazon already provides one for you? For some smart brands, the answer is clearly a resounding “yes.”

Amazon is Big, with Even Bigger Headaches  

Amazon is the new Sears, but with a big twist: there’s less regulation than you think. Because of its amazing growth, it has become the wild west of the global marketplace, with bad actors using ruthless tactics, and small businesses left with few options for recourse. According to an article on Verge about the dangers of the Amazon marketplace,

“For sellers, Amazon is a quasi-state. They rely on its infrastructure — its warehouses, shipping network, financial systems, and portal to millions of customers — and pay taxes in the form of fees. They also live in terror of its rules, which often change and are harshly enforced.”  

So, while most brands who sell products (and soon, services) probably need Amazon to be part of their distribution channel mix, the reality is that they need experts in guiding them to get to the top of the search results, and to stay there. These experts, lawyers, and Amazon enforcement issues cost a lot of money—dollars that could be spent on other distribution channels instead.

A Both/And E-Commerce Strategy

 So, while many retailers are already on Amazon, the smart ones are hedging their bets by investing deeply in their own customer-centric websites and user journeys. Casper, Huel, and a host of other well-known brands are playing in both areas: their Amazon pages are mimicking the information of their websites and using it for the conversion part of the sales cycle, while their websites provide a more tailored approach to the user, both in terms of information, as well as social proof (e.g. user reviews).

Why? They don’t want to be limited by Amazon’s highly controlled pricing and inventory structure, a review system that can be easily gamed (see above article), or being exposed to the dark underbelly of that marketplace. How do they get it done? They invest heavily in their brand message, creative, compelling content, and nailing down a customer-centric journey from ad content to purchase.

As seen below, Casper’s strategy was to launch with their website-only sales funnel first, and then branch out to Amazon as a secondary source. The Casper website has 10x the amount of user reviews, as well as richer informational content than could ever be on Amazon. To make things easier on the conversion facet of their website, they match their mattress prices to Amazon, as well as the free shipping and return policy. Organically, people know that it is no different buying from their site as opposed to purchasing it on Amazon. Knowing Amazon’s fee per sale, we can deduce that they are making much lower margins selling on Amazon, but because they are on there, we also know that it is still an important distribution channel for them.

Focus on the Lifetime Value of a Customer, Rather than First Purchase

Huel has a different approach. Huel sells their meal replacement products on Amazon, but they only sell their starter kit there. There is no option for Amazon’s “Subscribe and Save,” as they want the monthly customer to buy their additional products directly from the Huel website. To entice the user even further, Huel’s pricing strategy rewards customers for buying from the site to begin with. As seen below, their website pricing is significantly lower than it is on Amazon, and, like Casper, they match the free shipping option of Amazon Prime.

In this example, Huel is using Amazon in what we refer to as a defensive flanking strategy. How do we know that? Just look at the search results for “Huel” on Amazon:

If it weren’t for their sponsored ad (and extra ad dollars to have the coveted “Amazon’s Choice” ribbon), they wouldn’t show up at all on the first row. Their organic search result on the second row would be surrounded on all sides by the Soylent products. We can safely assume that the margins for Huel on their site are the same (or even better) than their margins on Amazon, even with the sizable delta in product price, considering the ad investment. Their “website-subscription-only” sales strategy is guided by their focus on the lifetime value of the customer (LTV), rather than the initial sale.

Bonus: Customer Data Is (Almost) As Valuable As Product Sales

Here’s the other part of both Huel’s and Casper’s (and everyone else’s) focus on directing some or all of their customers to their website: the brand owns the data. Like Amazon, intelligent retailers use customer behavior and analytics from their site to create better user experiences and offers. And you can only obtain that type of deep data if the consumer is on your site. Conversely, you can tell just as much why people aren’t buying your products by looking at site data, event tracking, and other attribution metrics. You can’t do that on your Amazon product page.  

 

Even more importantly, traditional customer demographics like age, gender, interests, and HHI (household income) tell about the “who” of the customer, and are commonly used to build brand personas. With site behavior and tracking of user experience from ad/organic all the way to purchase (and re-purchase), you are able to tell the “what” of the customer, what they are doing, where they are clicking, and what they end up buying. In many cases, the brand’s assumptions of “who” don’t match up with the “what.” With event tracking, heatmaps, and other behavioral data sources, you can target your messaging and better your customer’s experience, resulting in higher retention (aka increased lifetime value) of a customer.

Takeaway:

Retail brands are wise to position their own e-commerce sites as the go-to education source for their product. Amazon will likely be a sizable source of top-line revenue for brands, but the savvy brand managers use Amazon as a defensive strategy, at best getting the first purchase there, but at worst, making sure competitors don’t steal potential customers. Lastly, smart product and brand managers look at the LTV of the customer, rather than getting that one-time sale as a part of their overall customer acquisition cost (CAC). The lifetime value will go up tremendously if you aren’t paying the Amazon commission fee, but rather using those resources to interpret customer data from your website and create a better online experience for those returning customers.

Get In Touch With Us

Don’t be shy, say hello! We’ll utilize every tool in our digital arsenal to empower you to listen to your customers, reach out to potential clients, engage with relevant audiences, and increase revenue opportunities. All you have to do is drop us a line.

Why Brands Need to Take a Netflix Approach to Content

Why Brands Need to Take a Netflix Approach to Content

Why Brands Need to Take a Netflix Approach to Content

To stand out and grow in today’s world, brands need to approach their audience more like Netflix, and less like broadcast TV.

Once upon a time, people used to watch this thing called broadcast TV. It was a crazy concept: everyone would watch the same thing at the same time. Everything was mainstream, designed to generally appeal to everyone, but not ideally suited to any specific person’s tastes.

We’ve moved beyond that now. If you want to watch Friends today, you don’t have to wait until Thursday evening at 8 p.m. (7 central). You can watch any episode you want, at any time. And if you don’t want to watch Friends, you have other options: namely, everything ever put on any form of video, ever. People today are used to choosing the content they want, and have no real reason to put up with a mass-market approach that isn’t tailored to them.

The Landscape Has Changed

 This new Netflix model of creating and consuming content also applies to brands. The old one-size-fits-all approach does not fit all. More importantly, it doesn’t really fit anyone perfectly. And in a world of endless choices, you’re not going to get very far by just kind of appealing to people a little bit.

Different Values

For example, different audiences value different aspects of your product or service. To a 22-year-old, a new iPhone may represent innovation and prestige. It’s a chance to own the latest and greatest shiny new object. For a 55-year-old, that same iPhone might mean convenience and accessibility. It’s not about being cool, but about being able to FaceTime with their young granddaughter. A message designed for one audience wouldn’t appeal to the other, and a generic message aimed at both would get ignored or skipped over by both.

Different Consumption Values

The way that people consume content has changed, as illustrated by the trend away from network TV (including cable channels) and towards on-demand services like Netflix. Networks still offer a chronological lineup of shows, broadcast nationally and blandly blanketed across all demographics. Even with niche channels, you still have to buy the larger package in order to see the specialized channel you want, and you’re still limited by their schedule.  

Netflix puts the consumer in charge. Their shows are not time-bound or channel-bound, so the customer can pick and choose as they please. And from a business perspective, because the platform is dynamic and discoverable, Netflix can present new shows and depth of interests without spending (and charging) additional dollars for content expansion.

Different Expectations

We all now expect things to be delivered instantly (Postmates), on-time (FedEx), and in a frictionless, uninterrupted manner (Amazon). With a network TV approach, you have to wait for your show to run in its time slot; you can’t binge or go through a series quickly, much less skip episodes; and you have to suffer through commercials disruptive to the experience. None of that exists in Netflix. It’s on your own time, at your own pace, and there are few interruptions.

Current Marketing Methods Are Out-Of-Date

Consumers are still consuming, but they now go about it in a different way. If your advertising and brand messaging are being planned and distributed like network TV, you’re not keeping up with your consumers. In fact, you may be turning them off to your brand.

Current Methods Are No Longer Working

The “fill-my-feed” strategy of distributing content only on your organic Facebook feed and blog is both wasteful (in time and resources spent creating the content) and ineffective (less than 1% of your followers will ever see that post, much less people who don’t “like” your page at all).

Additionally, the aggregate result of your Facebook, Instagram, or other social feed is like network TV: blanketed across all of your target demographics, and unpersonalized to your customer’s unique user experience.

Current Metrics Are No Longer Relevant

In network TV advertising, the key measurement was always the number of impressions. But if a message is seen by a million people, and due to its generic, non-targeted nature doesn’t really connect with any of them, how much are all those eyeballs worth? Similarly, online metrics such as the number of followers or likes don’t necessarily mean anything if those people aren’t actually seeing your content, or are seeing it but never taking action.

 Current Spend Is Not As Effective As It Once Was

Of course, ad money spent chasing after the wrong people, with the wrong message, in order to reach the wrong goals, is not going to be money well-spent. And that low ROI puts your company at a competitive disadvantage.

Applying the Netflix Approach

To solve these issues, brands need to start approaching customers the way that Netflix approaches its viewers.

Personalization

Comedy? Horror? Girl power movies? Reality TV shows about food?

Nobody is going to like all the content on Netflix. In fact, you may not be interested in 99% of the shows and movies they offer. But you’re going to love that other 1%. And with the way Netflix works, you never have to watch something that you’re not interested in.

Your brand should likewise strive to provide potential customers with only the content that they would be interested in, with messaging that speaks to their pain points and personality. Unlike Netflix, your company probably can’t be all things to all people, but you can target your different audiences with the content that matters most to them.

Dynamic vs. Linear Distribution

With Netflix, the viewer is not forced to watch whatever episode comes out this week. If they are new to a show, they can go back and start at the beginning, with the pilot episode; if they are familiar with it, they can skip to a later season or re-watch their favorites. Either way, they get exactly what they want, or need, to move forward in their relationship with the show.

Marketers need to do something similar with their content. You should match your content to where each user is in the customer lifecycle. For example, you don’t ask for the sale before they even know who you are. You need a series of content pieces that drive people through the stages of awareness, consideration, conversion, loyalty, and advocacy. Through remarketing ads or email drip campaigns, you can track which users have viewed or engaged with a particular piece of content, and present them with material that drives them to the next stage.

Dashboard vs. Depth

Don’t overwhelm people with all of the content at first. Let them drive their own experience. Study them, curate what they really want to know about you, give them recommendations, and present opportunities to explore more, if that’s what they choose to do. If you can provide value for them even before they buy from you, that serves as a pretty strong signal that your product or service will also be helpful in their lives.

Measure the Right Metrics

The value of impression-based metrics is nearing zero. Engagement metrics are the floor now, while consideration and conversion metrics are the most valuable (and trackable). Test different ad variations and optimize your campaigns base on the metrics that create value.

Pay to Play

Let’s be realistic. The Facebook of today isn’t a source of free exposure for brands; it’s an ad platform with social weaved in. Google exists to provide ad revenue, not free search results. Amazon is the third-largest online ad platform, and is growing at over 100% per year.

This is an opportunity, not a threat, because it gives you the capability to target the specific people with specific messaging at specific times. And because it is all fully trackable, you can use it to test hypotheses in small batches before rolling out a campaign to a larger audience.

By taking advantage of the tools and capabilities of the digital landscape, we can do a better job of marketing to people while at the same time helping our customers more than ever before. So stop spamming people, or throwing stuff on the wall and seeing if it sticks. With a personalized, customer-focused Netflix approach, you’ll not only get more customers, but have happier customers that keep coming back.

Get In Touch With Us

Don’t be shy, say hello! We’ll utilize every tool in our digital arsenal to empower you to listen to your customers, reach out to potential clients, engage with relevant audiences, and increase revenue opportunities. All you have to do is drop us a line.

Unacquired: That Time We Sold Our Digital Agency & Then Bought It Back

Unacquired: That Time We Sold Our Digital Agency & Then Bought It Back

At the end of 2016, we sold BuzzShift. This acquisition seemed like the culmination of all our work building the company over the previous seven years; a way for our digital startup to really grow as part of a much larger agency. 10 months later, we bought it back. 

Needless to say, it was a learning experience for everyone involved. We don’t regret going through the process, and we’re now wiser and stronger because of it.

Now that we’re back with what we’re calling BuzzShift 2.0, here are a few insights for other business owners who may be facing similar decisions.

 

A little Q&A with Our Co-Founders

 

Cameron Gawley and Eddy Badrina - BuzzShift

BuzzShift Co-founders, Cameron Gawley & Eddy Badrina at WeWork Uptown

Why did you sell BuzzShift?

We saw the potential in joining a larger, traditional firm like Ivie, getting to work with larger clients, and hopefully helping the team there transition some of their traditional clients over to digital.

The fastest-growing brands in the world are digitally-led brands, but they’re not limited to only using digital channels. Being a part of a more holistic marketing play with brands, which included everything from print ads to in-store signage, was something very important to us. Ivie allowed us that opportunity.  

 

Why did you buy it back?

Like many relationships, you go into it with the best of intentions and on the same page. In the end, though, it simply didn’t work out the way either party thought it would, so we decided to amicably part ways.

 

What lessons did you learn?

There were several big takeaways:

  1. Companies start and end with culture. BuzzShift has a unique culture. We’re very flexible in how we work with clients; when we work; where we work (in terms of being remote or in the office); and even in the types of jobs that each person can fulfill (such as moving from project management to operations, or shifting from graphic design to creative strategy). It’s difficult to assimilate into another organization without losing some of that company culture.
  2. Our team is everything. Very early on at BuzzShift, we focused on ways to create, maintain, and grow a great team. Hiring slowly. Firing quickly, when firing was needed. Instilling high autonomy and even higher responsibility. Creating an environment that promotes authenticity and honesty. We didn’t try to create a family; we took a professional sports approach and tried to create the best team to put out on the field. Team members change, grow, and move on, but we always tried to grow the quality of the organization, so we could better attract high-performing team players.
  3. Looking back, we realize how fortunate we are. Consider the odds:

In short, we hit every milestone we could have in seven years. That’s mainly due to the team we have had the good fortune of hiring. And that goes back to culture. See lessons #1 and #2.

 

BuzzShift Workspace in Lights at WeWork Uptown Dallas

How did this experience change your view on owning a business?

It made us all the more thankful that we could run our own firm. And being a part of a larger company made us appreciate how much tougher it is to scale a small business up and manage it through all the growth transitions. Being a leader in a huge organization is tough sledding, with difficult decisions that are far reaching. It’s no joke.

 

What is BuzzShift 2.0? How is it different from the old BuzzShift?

In some ways, BuzzShift 2.0 is the same as it ever was: fantastic people, great culture, great clients, and a dynamic quality of work. But in other facets, BuzzShift 2.0 is totally different: we’re leaner, more nimble, and even more focused on the future of digital marketing. Our mission of helping businesses grow hasn’t changed, but our digital strategies and tools continue to evolve as the market does.

 

 

Why move to a coworking space (WeWork)?        

For us, it was about flexibility and agility. We needed to figure out how BuzzShift 2.0 would function and operate as a business model, so we had to have an office arrangement that was highly flexible. WeWork didn’t lock us into a 3-5 year contract usually associated with commercial leases, so that allows us to stay nimble and grow as needed. They take care of all the operational logistics that added hours back to our day (utilities, internet, snacks, etc), so it gives us more headspace to work on the business, not in it.

Being heavily connected into the community of other entrepreneurs, tech startups, agencies, and like-minded people is another major benefit of officing in WeWork.

BuzzShift Dallas Digital Marketing Agency Acquisition

Common Space at WeWork Uptown Dallas – BuzzShift

What advice would you give someone who was considering selling their business or getting acquired?

Talk to a good cross-section of business owners in your space. We had great wisdom and input from other techrelated founders and advisers whom we trust, and have known personally for years. We didn’t have to go into details with them, but just the fact that they knew our industry/space, and our business model, helped us a great deal.

Also, a good accountant and a business attorney are both worth every penny. Don’t skimp on those in the beginning of your venture, and don’t try and minimize their value at the end.

 

Would you do it again (get acquired)? If so, what would you do differently this time?

Under the right circumstances, we would be open to it, but we probably need a little break before the next one! The difference would be that we have an acquisition under our belt, so we have a better sense of what to look for now in terms of due diligence, and we will have our expectations dialed in more accurately.

BuzzShift Team

That’s it for now, but stay tuned for more thoughts and insights about where digital marketing is headed. Feel free to connect with us on social, or drop us a question in the comments below!

Photo Credit: Our amazing Madison Mentesana