Winning with e-commerce in 2015
We often forget that we are only about 15 years into the life of e-commerce.
Given the youth of this industry, it shouldn’t surprise us that the pace of change is still incredibly rapid. Despite the challenges of keeping pace with innovation, the e-commerce evolution continues to “level the playing field,” helping smaller businesses compete ever more vigorously with larger retailers. In fact, the rapid pace of change can favor smaller businesses that are more nimble and less constrained by the legacy e-commerce platforms of larger retailers. As such, some smaller and medium-sized businesses have been more ahead-of-the-game in implementing new commerce experiences than expected.
But small businesses must remain nimble, not only by testing new digital channel tools, but also by moving towards an “omnichannel” approach. We see every day that the lines between online and offline retailing are blurring more than ever before. Consumers want the convenience of shopping anytime, anywhere, and want the ability to move seamlessly from browsing product offerings on their mobile devices, to starting shopping carts at their desktops, to picking up those items at brick-and-mortar stores.
While this sounds like a lot to keep up with, the savviest small businesses are already leveraging new e-commerce and omnichannel tools to help boost brand awareness, customer engagement and sales revenues. Staying ahead in the digital world in 2015 means focusing on the following key areas:
Design “Mobile-First” Commerce Experiences
The year 2014 delivered many new eCommerce experiences that were “built for mobile” from the outset, and then adjusted for desktop as a second step. This is the opposite order of previous e-commerce design practices, where desktop was the first priority. This reversal is paying off as mobile-optimized experiences gained traction last year, with U.S. retail mobile sales reaching $8 billion in the second quarter alone, growing three times faster than that of desktop-based e-commerce. But what exactly are cutting-edge retailers doing to create compelling mobile-centric shopping experiences? In short, they are taking advantage of consumers’ tireless engagement with their mobile phones by engaging via mobile both in-store and out-of-store. Here’s how:
Mobile-enabled in-store: To boost in-store conversion, retailers are offering mobile-enabled experiences (such as “order-ahead”) that address real consumer pain points like waiting in line.
Mobile e-commerce: Outside of physical stores, retailers are driving increased e-commerce purchase conversions by distributing offers through their own apps or through third party digital wallets. Smaller retailers would be wise to start by developing mobile-optimized, browser-based shopping experiences. Somewhat larger retailers and brands should consider building native mobile apps. There are several developers and platforms that can help you design simpler mobile-optimized, browser-based experiences or your own native app.
Simplified experiences: Whether browser-based or native-app-based, businesses must use mobile to simplify the shopping experience. The less information your customers need to input before checking out, the better the chance for conversions.
Leverage Technology-Enabled Credit
Uniquely valuable credit for e-commerce businesses and consumers has become available over the last several years. There are two primary areas of interest:
Consumer credit: Many online retailers are already increasing conversion rates and ticket sizes by enabling “in-checkout” credit products, like PayPal Credit. Products like this allow consumers to immediately access a line of credit, subject to credit approval, at online retailers that accept PayPal, without the seller having to take any risk. Businesses themselves can also leverage technology-enabled credit to invest in other areas to drive growth.
Business credit: Businesses that are unable to get loans from traditional lenders may find success with loans like PayPal Working Capital, which uses PayPal sales volume to underwrite the loans. Businesses are using these funds to increase inventory, hire seasonal workers or launch marketing campaigns.
Adopt Tools to Minimize Abandoned Carts
While abandoned carts are a constant reminder of lost value for online retailers, there is hope: studies estimate that about 63% of the $4 trillion in abandoned cart merchandise can be recovered. But how can retailers capture this potential?
Re-marketing: There are several “re-marketing” strategies to drive incremental conversion. Many retailers are using email to re-target these consumers with reminders or even special offers to complete the purchase, but only if the merchant has successfully collected a consumer’s email address. More advanced retailers are using “display retargeting,” which doesn’t require an email address, but instead uses tracked IP addresses to present display ads to consumers.
Simple checkout: One of the most effective strategies to minimize cart abandonment is a simplified shopping and checkout experience. (note the recurring theme of “simplify, simplify, simplify.”) Creating fewer checkout steps and enabling customers to store payment and shipping information are proven ways to address cart abandonment and improve conversions.
Omnichannel: Finally, an integrated omnichannel experience can reduce cart abandonment. Conversion will increase if consumers can continue shopping in a different channel than where they started, resuming an in-progress cart, and completing purchase without entering information a second time.
Engage in Cross-Border e-commerce
Global eCommerce will more than likely triple in the U.S., U.K., Germany, Brazil, China and Australia by 2018, reaching up to $307 billion with 130 million cross-border online shoppers. Retailers of virtually any size can cost-effectively participate in this global value exchange via e-commerce, but they must do their homework before going global. In fact, many retailers that “go global” are realizing it can be easiest to get there with the help of a partner, given the complexity of international sales and logistics. Here’s what the best cross-border sellers and their partners are focused on:
Product fit: In order to get the most out of cross-border trade, sellers must first understand which of their products are in demand in particular markets. Collaborate with businesses like PayPal with experience in cross-border trade.
Discoverability: Second, sellers must make sure they are in fact discoverable in different markets by ensuring access to their websites, and possibly by providing foreign-language eCommerce sites. There are several site-translation tools that can be used as a starting point, but retailers must move beyond direct translation of US eCommerce experiences in order to be most effective. This means creating tailored marketing pages for overseas consumers, testing different product positions and marketing messages for consumers in different geographies.
Logistics: Finally, retailers or their global commerce partners must solve the challenges of fulfillment and logistics, accounting for differing regula