E-commerce has evolved over the years to be an increasingly important part of retail. In fact, it is even more important than retail people seem to realise.
Consumers are becoming more and more connected and are always on the run in a society always short on time. In early 2000, nobody thought e-commerce would become what it is today. Few realised the transition in buying patterns would come so soon.
A number of things supported this evolution. The development of DSL and broadband connection together with more agile handhelds, tablets, and phones played an important role. In addition, a growing trust of the merchants offering the service of buying on the Internet helped push e-commerce along.
Today, more than 500 million consumers in Europe represent a gigantic potential for every merchant that wants to go online. The number of consumers that buy online varies from 45% to 80% of the population in countries throughout Europe. However only 24% buy from stores in another country.
The share of cross-border e-commerce certainly will increase in the coming years. The effect of this is that we are entering a super competitive environment where the consumer is king. The single market will, without doubt, offer the consumer high customer service and low prices.
Outside Europe things moves even faster. Asia is showing up in Europe with players like Alibaba, Dealextreme, and others. What they all have in common is merchandise sold without using a middleman to Europe at a very low cost. And shipped for free. Who can resist that?
On the other side of the pond, American merchants are lurking in the weeds. The big players are already here, and the smaller are eagerly waiting the free trade agreement between the EU and the USA.
So how do the merchants marketing themselves in this environment? Well, most of them have moved from print advertisements to the Internet, paying only for results. The era of buying hope is over, and now it is all about performance marketing.
Investing US$200,000 and knowing for sure you get a ROI of 56% is key, as one merchant told me. A hesitation towards linear TV is growing, and retailers often turn to new channels like YouTube, Instagram, and LinkedIn to explore the potential of these new environments.
Nobody knows if they will succeed in this strategy yet. But it is easy to realise the marketing challenge for the e-merchants is complex.
The consumers browsing pattern is becoming more and more fragmented. Who knows where the target group are? Merchants are asking themselves where their customers are and where to market their offer.
Because of this, marketers will more often seek new platforms for their advertisements — platforms like e-commerce Web sites in niches that fit well in with the required target group.
The importance for merchants to be represented in many channels — store front, catalogues, blogs, and e-commerce — is vital if they want to be seen by the consumers. The multi- and omni-channel strategy is evolving.
My analysis is also that the clear line in between content and advertisements is eroding. I believe we are entering into the infotainment world — a world where it is difficult for the consumer to distinguish between content, ads, and entertainment. It will all melt in together.
The traditional merchants with a brick-and-mortar store will face hardship when trying to keep up with the speed of change. Coming from a traditional retail environment, they will realise that skills, speed, and curiosity will be awarded. Indeed they will also have to invest regularly as technology changes rapidly.
Who will succeed?
Many research reports show that the consumers of today can be found everywhere. On all platforms and in all channels, they are doing their research for products and services.
If you are not there, you are not being considered. It is here and now that counts.
We are entering the “now economy.”