Google keeps developing tools to help e-commerce companies increase sales. Problem is, it’s hard to keep up all of it. Well, here’s a guide that gathers together the latest and greatest from Google. Read More>
Calling its previous (and controversial) suspension of unprofitable vendors a “temporary pause,” Amazon reversed course last week and now has allowed them back on the platform. The suspension served as a wake-up call, however. Dependence on selling through Amazon is dangerous. Brands should be wary of getting locked into Fulfillment by Amazon. Read More>
Ecommerce platforms like Shopify have grown rapidly because of low cost of entry and ease of use. Overlooked in the stampede, though, are advantages that often accrue to customized solutions, such as the ability to integrate multiple vendors and drop-shipping. This infographic does a good job of comparing Software-as-a-Service platforms like Shopify with custom-built solutions. Read More>
Loop, a zero-waste platform supported by a coalition of major brands, will launch a pilot program in New York and Paris this year allowing consumers to purchase items in reusable stainless-steel containers. When finished, the containers will be picked up and sent to a sterilization facility and then returned to the manufacturer for re-use. Read More>
How to Improve Your Landing Page Conversions
They say don’t judge a book by its cover, but landing pages serve the same purpose as book covers — moving customers into the sales funnel. The conversion rate of an average landing page is 2.5%, but some reach as high as 11%. How? The Conversion Benchmark Report offers comprehensive data on landing-page conversion-rates per industry, along with data-backed recommendations on how to improve, such as using attention-grabbing headlines, strong calls to action, and appealing visuals. Read More>
Is In-House Fulfillment Holding You Back?
Many start-ups try to run their own fulfillment at the beginning, which makes sense when order volumes are small. As volume increases, however, in-house fulfillment can become an impediment to growth for three main reasons: 1) the desire for control creates bottlenecks, 2) short-term cost-cutting inhibits scalability, and 3) customer service tends to suffer. Read More>
The Challenges of Ecommerce Packaging
The rise in ecommerce has led to a corresponding rise in packaging. According to design engineer Emmy Corman, ecommerce packagers faces three challenges that need to be overcome: 1) reducing waste, 2) improving shelf presence, and 3) optimizing returns-costs in a small-package shipping environment. Read More>
Ecommerce Predictions for 2019
The Chief Product Officer of BigCommerce has looked into the future and seen four 2019 trends— 1) direct-to-consumer brands will continue to thrive, 2) headless commerce (the ability to pair any content management system with any backend payment platform) will grow, 3) Amazon will keep raising the bar, and 4) virtual-reality shopping will remain more a trendy promise than a reality. Read More>
Five Ways to Update Your E-Commerce Site
How about this for a New Year’s resolution? Update your e-commerce site. Here are five suggestions, beginning with 1) refreshing your product and landing pages, 2) streamlining your checkout process, and ending with 5) employing chat bots for customer service. Read More>
Social Media’s Evolving Role in E-Commerce
The average person spends an hour and 40 minutes browsing social media every day. Meanwhile, there are 217 million internet shoppers in the U.S. alone. The intersection of these two activities represents a treasure trove of sales opportunity. Facebook advertising leads the way with its extreme targeting capability. Meanwhile, messaging apps like WhatsApp and Snapchat are enjoying tremendous user growth, and you can buy products directly on Instagram, Pinterest and Twitter. Read More>
Retail Predictions for 2019
The site Retail Customer Experience recently reached out to leading retail experts to find out their 2019 predictions, and here’s what the experts said: Physical retail will continue to improve in the areas of transparency and sustainability, checkout-option technology (such as scan-bag-and-go) will become more prevalent, and retailers will use their space more creatively, such as converting some of it into fulfilment centers. Read More>
Shipping Companies Set a Record for E-Commerce Deliveries
The numbers are in for the holiday season, and USPS, FedEx and UPS delivered a combined total of 2.5 billion packages with an on-time delivery percentage of almost 99% (anything above 95% is considered good). The big delivery companies continue to step up their game under pressure from rising e-commerce volumes. Read More>
According to a recent survey, one-third of consumers plan to do almost half of their shopping with direct-to-consumer (D2C) brands, and 81% say they will make at least one purchase this year from a D2C. However, only 9% believe the customer service with these companies is superior to traditional brands.
Price, quality and convenience are the driving features in today’s retail environment, and this is where D2C companies prevail. A countervailing trend is that the most successful D2Cs, such as Warby Parker, Casper and Untuckit, are moving into brick-and-mortar, opening specialty stores in affluent areas.
Changes are taking place with traditional retailers, particularly with in-person customer service. That is, after all, their main advantage, which is face-to-face selling and giving customers the opportunity to touch the merchandise.
Subscription e-commerce companies such as Stitch Fix, Dollar Shave Club, and Blue Apron comprise a fast-growing sector of online selling. According to a McKinsey survey, 15% of online shoppers have signed up for one or more subscription services. Cancellation rates are high, however, with consumers quick to bail if the services don’t deliver a superior product or experience.
Subscription box website visits have jumped from 700,000 in 2013 to 21.4 million today, a 3,000% increase. This strong growth has attracted a lot of mainstream players like Procter & Gamble (Gillette on Demand) and Walmart (Beauty Box), as well as triggering many acquisitions. Unilever, for example, in 2016 purchased Dollar Shave Club for $1 billion.
Subscriptions aren’t new, of course. Magazines and newspapers have long used a subscription model, though the growth rates of modern startups are eye-catching. Birchbox, for example, launched in 2010 and grew to 800,000 members in less than three years. It took the Columbia Record Club 40 years to reach that level.
So why do consumers like subscriptions so much?
First, let’s look at the three types of subscriptions — replenishment, curation, and access.
Replenishment subscriptions allow consumers to automatically receive consumable items that they have to purchase anyway, a great convenience.
Curated subscriptions surprise customers by choosing the items based on algorithms derived from data supplied by customers. Stitch Fix is the best example of this model, which asks new customers 51 questions to determine the individual style and then selects clothing accordingly.
Access subscribers receive a discounted price by virtue of membership.
The typical subscription-box visitor is in their early forties, lives in an urban environment, and makes slightly less than $80,000 per year. Sixty percent of them are women.
All is not perfect in subscription-world, however. Customers are quick to cancel their subscriptions, with up to 40% having done so at least once in the past.
Subscription boxes are a great e-commerce sales model if consumers’ high standards are met.
1. 80% of Americans with internet access have made an online purchase in the last month.
2. Millennials and Gen Xers spend 6 hours per week shopping online; Baby Boomers spend 4, and Seniors 2.5 hours.
3. Parents spend more of their shopping budget online compared to non-parents (40% vs. 34%) and spend more time shopping online per week (7 hours vs. 4 hours).
4. Last year, men spent 28% more money online than women.
5. Americans in metropolitan areas spend more money online than suburbanites or rural customers.
6. Shoppers on third-party marketplaces spend more time searching and also spend more money per-purchase than those who visit branded stores.
7. The top three factors in determining where Americans shop are price (87%), shipping cost and speed (80%) and discount offers (71%).
8. 30% of online shoppers say they are likely to make a purchase via a social media network like Facebook or Pinterest.
9. 55% of e-commerce sales are done through branded stores vs. 45% through third-party marketplaces.
10. 43% of online shoppers have made a purchase while lying in bed.
In 2017 Amazon spent $21.7 billion on shipping costs, nearly double the amount from two years ago. That is $21.7 billion in losses, since Amazon doesn’t charge for most shipping. One hundred million items qualify for free two-day shipping now compared to only 20 million in 2014. The company’s bet, of course, is that by offering free shipping to customers they will become addicted to the convenience and spend more. But do the increased sales make up for the shipping losses?
Probably not, which is why Amazon recently announced the cost of a Prime membership would rise by 20% effective May 11. In addition to raising the cost of a Prime membership, Amazon is also raising seller fees in certain high-volume categories such as apparel and books.
There’s no such thing as a free lunch. Costs have to be absorbed somewhere, either through lower margins or by investor subsidies, which has been Amazon’s strategy for most of its existence.
In business, there are fixed costs, defined as costs that remain basically the same no matter how much a company sells, and then there are variable costs, which rise and fall with sales. Shipping is a variable cost and therefore a price factor in every purchase. Some analysts expect shipping costs to increase by 7% per year going forward, a variable cost that will have to be absorbed either by e-commerce sellers or their customers.
The secret sauce to e-commerce may ultimately turn out to be convenience over price as the competitive landscape finds its natural level. Brick-and-mortar rents are falling, for example, while e-commerce shipping rates are rising, which may start returning some leverage back to the brick-and-mortar business model.
Some analysts say that the supply-chain cost to retailers for direct-to-home sales is three times that of an in-store purchase, yet customers don’t pay three times as much to have items delivered to them. In fact, they often they pay less, with the difference in cost being absorbed by the retailer. How long will that continue?
Amazon Prime membership fees only recover about 55% of the money that Amazon spends on shipping, which is why Amazon recently raised the minimum purchase for free shipping to $49 from $35.
How can smaller e-tailers compete with Amazon as the promise of free shipping bites deeper into margins? One way is to ship through fulfillment 3PLs that receive shipping discounts from the major carriers, reducing shipping costs. Another way is to improve packaging. Shipping costs are determined by weight and dimensions. The weight of the product usually can’t be controlled, but often substantial savings can be found in packaging variables.
Another strategy is to create a sales niche or buyer-community that is loyal to your product. Then the e-tailer can charge more and cover the costs of increased shipping.
Whichever route one chooses, shipping costs will play an increasingly important role in retail decisions going forward.
Walmart is a sleeping giant in the world of e-commerce. Despite double-digit growth in recent years, its e-commerce business is still less than one-quarter of Amazon’s. The giant is waking up, however, now offering two-day free shipping without a membership fee (there will be no Walmart Prime) and introducing a cleaner and more modern e-commerce website.
In addition to better photography, newer fonts, and more color, the revised site will include specialty shopping experiences, such as fashion, beauty, and groceries and feature a more personalized and local angle, like alerting customers to fast-selling items in their area.
Consumer spending habits are changing in ways that might help Walmart. Rather than buying in bulk once-per-month (the Costco model), people are starting to purchase more frequently and in smaller quantities, using physical stores to browse before going home and buying online. This is bad news for Costco but good for Walmart, which doesn’t care if you purchase from one of its stores or its website.
Amazon understands this spending-habit change and is building its own brick-and-mortar footprint (Whole Foods, Amazon Go, Amazon Books), but that will be a laborious and expensive process if it wants to match Walmart, which already has 11,000-plus physical stores.
In a sense, Amazon and Walmart each have what the other one needs, and so, barring a highly unlikely merger, it will be a race to see which one can put together the most effective omnichannel strategy consisting of in-store sales, online sales, pickup and delivery.
Is Snail Mail about to turn into Cool Mail? The USPS’s new service, Informed Delivery, will email you images of every piece of mail you’re scheduled to receive that day. Wondering whether or not to wander down to your apartment building’s mail box? Check Informed Delivery first and see if anything interesting is scheduled to arrive. Expecting a check or maybe hoping to avoid a summons? Informed Delivery will let you know.
This could be a boon to marketers when the USPS takes the next step and includes clickable links with the images. Imagine launching a direct mail campaign with the ability to track the clicks, just like with digital. Imagine being a customer, seeing an image in the morning with a clickable link leading straight to purchase, and then receiving the physical mail later that day. Then there’s the added benefit for marketers of knowing that the consumer actually received the physical mail and probably looked at it, unlike email marketing where many — if not most — messages languish in spam folders.
It’s an opt-in service and entirely free. Currently Informed Delivery only shows images of envelopes but not packages or magazines. However, the service does give a status update of packages and allows for special delivery instructions. The USPS plans to include packages and magazines in the next phase of Informed Delivery.
Click here for more information about Informed Delivery.
Walmart, the Amazon of its day, is putting everything it has into competing with the e-commerce giant, including letting third-party sellers appear on its website. Walmart.com doesn't accept everybody, however. There are standards to be met before a third-party seller can post products on the site, including:
- strong customer service
- unique product assortment
- competitive pricing
- fast and reliable fulfillment.
To apply, sellers log onto https://marketplace.walmart.com/apply and fill out detailed company information along with product details and warehouse/fulfillment capabilities. If accepted, Walmart sends an email allowing sellers to begin the setup process.
Here are some advantages to selling on Walmart.com versus Amazon:
- No setup or monthly fees
- Less competition
- A voice-based partnership with Google.
Here are some disadvantages:
- The approval process can take weeks.
- Walmart tends to favor known brands over small sellers.
- Buyers of premium products often view Walmart as down-market and might not think to go on its e-commerce site to buy a higher-end product.
These are salad days for corrugated-box manufacturers, especially with e-commerce requiring outer shipping boxes for almost every shipment. Meanwhile, acres of discarded boxes are recycled or thrown away each day.
Because of this, the packaging industry is ripe for disruption. Currently, products are packaged to enhance their shelf-appeal in stores rather than for shipping, yet brick-and-mortar continues to lose market share to e-commerce.
So where is the disruption opportunity? In the packaging production lines, which need to be retooled so that products can be packaged in ready-to-go shipping boxes, thus avoiding the need to repackage them in larger boxes at time of shipment.
M-commerce (M stands for mobile) is trending. Its biggest hurdle to date has been an uneven integration with online shopping carts, primarily because of three factors:
1. Small mobile-phone screen size
3. Payment security
Smartphone manufacturers have addressed the first issue by creating larger screens. Meanwhile, cellular connections continue to improve, with upcoming 5G wireless technology promising to speed things up even more. Social media sites have helped out by offering Buy buttons, which transport customers seamlessly from browsing-to-purchase and reduce the fear of sharing credit-card information via phone.
The results are startling. Money spent per mobile visit to online retailers has increased by 27% since 2015, almost as big of a jump as tablet and desktop sales combined, while the length of time spent during the purchasing process has declined by 10%, meaning that the mobile shopping experience is becoming more streamlined.
Meanwhile, overall mobile visits have skyrocketed. Since 2015 there has been a 90% increase in smartphone visits to websites, while traffic from tablets and desktops has actually declined.
The growth in sales is phenomenal — m-commerce revenues are expected to increase from $30 billion in 2014 to $284 billion by 2020.
Physical distances are shrinking also. You can log into e-commerce websites from almost anywhere, purchase from a seller who is located almost anywhere, and expect to have your purchase delivered in a matter of days.
Now that's service.
Here is a handy checklist of critical elements for e-commerce success:
1) Get Good at Social Media
The social-media universe is virtually infinite, and so it’s a challenge to find the best way to use it. Dabbling in all available social-media platforms is fine, but we recommend picking one and mastering it, with this objective -- creating an environment where customers can exchange information, and where you can post announcements.
2) Minimize Shopping Cart Abandonment
Approximately 60-70% of online customers abandon their shopping carts before making a purchase. The main cause is often additional fees that get tacked on at the end of the sale, such as shipping charges. Try to announce ancillary fees at the beginning of the process so customers aren’t surprised at the end. Another important strategy is to send a follow-up email to customers if they abandon their shopping cart. There are many automated email programs that can do this for you.
3) Up-Sell and Cross-Sell
Let’s say a customer is ready to buy one of your products. This is the perfect time to sell them something else, either additional items that enhance the usefulness of your product (such as shaving cream specifically formulated to work best with a particular razor), or combining items to allow the customer to achieve a volume discount. Another strategy is to offer an inexpensive entry-level sale. A good example of this was employed by Sam Walton, founder of Wal-Mart, who sold ice-cream at cost in front of his first brick-and-mortar store, attracting customers with the low price and then ushering them in to make more purchases.
4) Leverage a 3PL
If you start small, you might want to try fulfilling and shipping your product yourself, but third-party logistics companies (3PLs) can usually handle this function better and cheaper than you, once volume and order-complexity levels have been reached.
5) Offer Free Shipping
Everybody likes free shipping, and you need to offer it, though you probably aren’t in a position to emulate Amazon and lose $20 billion dollars a year on it. Instead do the next best thing and offer free shipping at a minimum purchase-price point, encouraging customers to buy more.
6) Get Your Mobile Capabilities Up to Speed
Sixty-two percent of smartphone owners made a purchase via mobile in the past six months. Mobile usage is growing faster than any other communications segment. Your mobile site should be user-friendly, with an easy-to-navigate shopping-cart function.
7) Outsource, Outsource, Outsource
Good leaders keep their eyes on the big picture, which means staying out of the weeds. Entrepreneurs and small-business owners often feel the need to do everything themselves, and while it’s good to understand the details of your operation, trying to do everything is ultimately a loser. Pick an area where you feel most skilled (sales and marketing are good) and outsource as much of the rest as possible.
8) Create Original Content
Recipes, blogs, newsletters - there are many ways to keep a flow of information going to your customers and prospects. Tilt your content toward information more than sales. People like content that teaches them something.
9) Get Customer Feedback
Your customers are your best critics, and their feedback is a gold mine of information. Many e-commerce platforms have plugins that allow you to collect and display customer reviews. If that isn’t available, there are other apps that allow you to integrate customer testimonials into your product page.
10) Connect With Affiliates
Affiliates are associates (such as bloggers) who refer customers to your website and then collect a commission on the sales. This serves as free marketing for you. There are reputable networks that make it easy for affiliates to integrate with you. Be generous with your commissions because this is one of the more efficient marketing tools available.
This holiday season Amazon and Google pushed hard to market their respective virtual voice assistants -- Amazon Echo and Google Home -- which soon may come to dominate household activity.
Voice technology has an advantage over other tech innovations because it's easy to use. Simply speak into a device and voice-translation technology seamlessly obeys your command. Customers don't need to master new interfaces. They simply do what they've done their entire lives -- talk.
Voice assistants are embedded into almost every new household appliance these days as tech companies race to gain a monopoly on the internet-of-things. In the near future, consumers may be motivated to buy compatible household appliances that are supported by one technology company so that everything operates on the same system.
Amazon is even thinking about putting ads into their devices, which means a voice assistant, in addition to taking orders, might also make recommendations, sort of like the guy on the loudspeaker at the grocery store who continuously announces the daily specials.
A potentially creepy factor might also come into play. Digital assistants (Amazon Echo, Siri, the lady in your GPS) already speak to you in soothing tones. What happens when she (and it's always a she) adds Artificial Intelligence (another day-to-day technology looming on the horizon) to her arsenal? Will she become an ideal companion who changes and adapts to your personality, offering lifestyle advice along with recommending new things to buy? Will she then become your new best friend?
The immediate-gratification society is about to get even more immediate when robotic, self-driving vehicles begin traveling the streets 24/7 delivering the stuff we've ordered. The latest entry is Nuro, a startup that has secured $92 million in financing to build small, driver-less delivery trucks.
Nuro is looking to help solve the Last Mile problem by delivering cargo and packages into small areas such as city streets. It is relatively easy to transport cargo over long distances but far more difficult (and expensive) to cover the final leg, the Last Mile.
Nuro believes that self-driving delivery vehicles will be easier to manage than passenger cars. For one, they are only half the size of a sedan and are built specifically for local roads, unlike regular cars that also have to travel on highways. Speed is not a priority with a local-delivery vehicle.
Because it's cheaper to operate, Nuro vehicles might also be able to provide services to local merchants, who normally can't offer local delivery.
Nuro is following on the heels of Aurora Innovations, which has recently partnered with Volkwagen and Hyundia to commercialize self-driving technology. Dozens of other tech companies are jumping into the market that some people believe will mark as radical a shift in transportation as when the internal combustion engine replaced horses.
Other car companies are getting into the act. Ford is testing a pilot program with Domino's to deliver pizzas in Michigan, and Toyota recently unveiled a concept vehicle called e-Palette that will supply self-driving vehicles to Uber, Amazon and other companies.
Many experts believe that these self-driving delivery vehicles will achieve success far sooner than self-driving passengers vehicles.