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Digital content and e-commerce are in a key transition period. It’s time to start thinking about how your brand’s commerce experience will evolve into the next decade.
Have you felt an overwhelming desire to upgrade your smartphone in the past six months? Maybe not this year. It’s likely your current device is doing everything you already need it to do, and digital adoption has reached a saturation point. But this digital ubiquity is now allowing for different innovations to make our digital experiences more useful since the major Internet and (admittedly more flashy) digital changes have started to slow. Beyond the big tech companies, platforms and publishers are also finding new ways to engage their users, particularly through e-commerce, and brands are reassessing their digital ecosystem of owned channels, giving a new importance to e-commerce as a part of that mix. E-commerce is often thought of as rather straightforward for marketers, but I’d like to challenge that notion.
Before we can even talk about new opportunities, it’s important we acknowledge the way people shop is rapidly changing. Due to advancements in commerce technology, as well as nontraditional financial services such as Venmo and CashApp, consumers are now more comfortable sharing financial information on mobile devices through apps and even voice assistants than in years past. Forrester estimates that by 2021, consumers will spend $152 billion through mobile phones, which would equate to nearly 24 percent of total online sales. Consumers’ willingness to spend in channels in which norms and expectations have not been firmly cemented opens up fascinating new opportunities for brands to experiment, as these dynamic touchpoints will reward creatively engaging experiences surrounding the digital point of sale.
As Tom Goodwin points out in Digital Darwinism: Survival of the Fittest in the Age of Business Disruption, a majority of today’s brands are still providing an online shopping experience comparable with viewing a print catalog from the early 1900s. Why? Because we innovate within experiences that feel familiar to us. Very rarely does a new technology get applied in the most useful way the first time around. Goodwin illustrates this concept with electricity, noting that we first created on and off light switches that were attached to the lamp itself. It took years to establish a useful on/off system that you could operate on the wall as you enter the room. Today we’ve reached a similar turning point with commerce.
The world is ready for the next development in e-commerce, and we’re already beginning to see successes from apps, publishers, and brands who are approaching their point of sale differently. The point of sale has drastically transformed and multiplied in a way that’s making it accessible almost everywhere. This change will have implications on a brand’s commerce channels as well as how that brand approaches their messaging distribution to complement their e-commerce strategies.
It could be argued that China has already figured out the future of e-commerce with their widely popular app, WeChat. In 2017 WeChat launched what’s called a mini-program that many describe as “an app within an app.” These mini-programs allow users to interact with advanced features such as e-commerce, task management, and coupons while staying in WeChat. Today, 18 percent of WeChat mini-programs are focused on e-commerce. While the United States is switching from app to app for many of the digital needs we have, China has already found a way to streamline this process and it’s working.
One brand leveraging this well is Sephora. The beauty brand has taken note and uses WeChat mini-programs to market within the app, embracing the social culture of their China consumers. Their mini-program is designed to help users discover the newest beauty regimen based on Sephora’s recommendations and then make their purchase. The mini-program in WeChat also shows consumers the nearest location and helps them book services for the next time they’re in-store. The easier and simpler for consumers, the more they’ll enjoy the brand experience and want to come back next time. WeChat makes this even easier for Sephora to accomplish.
As a direct lift of this concept, over the past couple of years Facebook and Instagram have been developing and rolling out features of their own to encourage in-app shopping. While Facebook and Instagram have seen great success with e-commerce internationally, it’s only recently that we’ve started seeing the U.S. take note. As a natural extension to their online catalog, brands are able to set up collection ads and dynamically rotate in products that drive user interest. These ad units are meant to include 50+ products to keep optimizing the digital storefront as products go out of stock and new ones need to be rotated in. IKEA and Adidas have seen impressive results from these new features.
Instagram is also creating new ways for influencers to add products to their content that are pulled in from brand catalogs. Now consumers aren’t distracted by external links and a variety of items; rather, they’re clearly directed to the product of interest. Brands like Outdoor Voices jumped right into these platform opportunities as they launched earlier this year. Personally, I love how users can actually see the apparel on the influencer while they’re out and about. It might still be a posed shot, but it feels a lot more personal than the catalog images we typically shop from.
In good company, the other big tech leaders of today, Google, Apple, and Amazon, are all focused on making their user experiences seamlessly shoppable as well. Apple and Android are competing head-to-head to develop their own payment structures, making our mobile devices powerful tools for quick transactions. As we continue toward this era of digital transformation, nearly all experiences on mobile have the potential to be shoppable regardless of the brand, product, or digital ecosystem you’re engaging with.
Today we tend to think about shopping happening on our mobile devices, but this radical transformation in e-commerce is not just being able to shop on a mobile device. Instead, it’s about our on-the-go shopping behaviors that can be paired with a different e-commerce infrastructure with your mobile device as a layer of that experience. Imagine if you could take a photo of a sweatshirt someone is wearing, and your phone’s iOS system provides options to text it, email it, share it to social platforms, and actually shop it. It’s not far-fetched to think the capabilities Google Lens is testing will be widely available in the next decade with advancements in image recognition and commerce capabilities.
In the past, publishers left commerce to the ad space dedicated among their pages, but today the publisher landscape is looking much different. Gaining online subscribers was never the main priority for a cultural documenter like Hypebeast, a premier destination for fashion and culture on the Web. Each month, over 9 million visitors log on to view the latest in fashion, art, design, and music. Their editorial work not only documents culture, but they contribute to culture in different ways, going far beyond traditional media and advertising tactics to make money. The Hong Kong-based publisher covers fashion, music, and drops in their editorial content, but has diversified revenue streams that contribute to culture. These manifest themselves in events like Battle at the Berrics and Hypefest. These events bring in revenue and grow a loyal fan base that strongly identifies with Hypebeast as a brand.
Think about Hypebeast as the new MTV, and instead of Spring Break, they’ve created even more cultural moments to be a part of. Beyond events, their social channels aren’t used to repurpose article content, but rather tell stories through Snapchat TV and feature collaborations that are happening all over the U.S. And to top it off, they have a clothing line, HBX, that bridges the gap from editorial content to e-commerce. This area of the company is growing as they’re opening their first HBX brick-and-mortar store this year, putting them in an entirely new category when we talk about publishers today.
Another publisher redefining the media space today is Complex. As a lifestyle brand and media company, they generate over 1.2 billion video views a month across their owned digital channels, and they’re a top 10 publisher in the U.S. for social engagement on channels like Facebook and YouTube. With so much engagement, you’d probably be surprised to hear that their food vertical, First We Feast, doesn’t get much of their revenue from ads. In fact, 85 percent of First We Feast’s revenue comes from e-commerce sales of hot sauce, stemming from their popular YouTube series, Hot Ones.
If you’re not familiar with Hot Ones, I encourage you to check out their episodes and pick out a show with one of your favorite celebrities. Many different people of influence are interviewed as they go through an increasingly challenging hot sauce taste test. The conversation in each episode isn’t focused on the sauce the entire time, but it might as well be. They compare the releases of their hot sauce to a sneaker drop. And for anyone who knows sneaker culture, you wouldn’t be surprised to hear their hot sauce sold 1,000 bottles in one short hour.
Looking beyond streetwear culture, The Strategist, a New York magazine-owned website, exemplifies thriving with a nontraditional publishing model. Even though it launched less than four years ago, The Strategist already makes up 60 percent of New York Media’s online traffic. As the team at The Strategist told Digiday, “The brand has delivered double- or triple-digit growth in revenue every quarter since its launch, and its yearly revenues are projected to more than double in 2019.” But surprisingly, given The Strategist’s sizable audience, very little of their revenue comes from selling advertising targeting their readers. Their content focuses on fashion and the latest trends, allowing you to shop their product recommendations while the publisher is compensated through affiliate agreements.
So is e-commerce the secret to publisher success? It’s tough to say. Because apps and publishers are finding new revenue streams through e-commerce, advertising isn’t as important to their business model as it once was. If publishers have direct influence over sales, whether it be hot sauce or fashion, that changes the value they offer to brands and marketers like us. These publishers are no longer selling just impressions, attention, or even awareness, but instead they are able to sell brand revenue. This brings me to my final question, where does that leave brands?
Many brands winning today have scrappier business models. They’re going direct-to-consumer because they don’t need to rely solely on traditional distribution with major retailers now that their products can reach consumers and be purchased in alternative ways thanks to the Internet. The script has flipped, and for scrappier brands like Halo Top and Glossier, it’s not about filling the upper funnel first, but rather starting with the experience closest to the brand’s product, commerce. This doesn’t mean the direct-to-consumer approach supersedes distribution, but it should have a stronger role for your brand in 2020.
Think about this as a shelf-out approach. If you start with your product and wrap a creative storytelling experience around the point of sale, you’ll be reaching your consumers with your best brand experience in the place where they have the strongest interaction with your brand. This shift in brand ecosystems is creating a blur between distribution and promotion, therefore the advertising and messaging we have historically prioritized has to adjust accordingly. What if a brand’s larger awareness messaging was a part of the creative storytelling at the shelf? Given this new approach, marketers have the opportunity to build on creative messaging through e-commerce, and it gives brands unlimited ways to impress their customers through storytelling and experience.
Take Dirty Lemon, for example. This company offers a playful, bright beverage that is only available direct-to-consumer through their e-commerce platform that takes place over text. First-time users must start their order online, but then they’re quickly directed to text.
A different approach than most, but Dirty Lemon created a conversational and fun way to order from the brand via consumers’ phones. Their business model is becoming more and more popular for the start-up brands who are focusing on providing the best possible experience for their customers, skipping the big retailer middleman. In addition to their SMS program, Dirty Lemon also has a cashier-less retail store in New York City where users come in and purchase based on the same SMS concept for payment. This personal approach Dirty Lemon took is an advantage over larger retailers. This is why some retailers are finding other ways to be more personal through their commerce experience.
One e-commerce brand we’re all very familiar with, Amazon, is working on influencer storefronts to create more personalized shopping experiences on their platform. Amazon is working on these storefronts to enable influencers with tools to drive sales and attribute their work with a stronger return on investment. Colette Prime has a page today, and it’s said that Amazon is working on making these storefronts even more engaging as they continue to roll out updates that help them foster relationships between their customer and those they see as influential.
Other brands continue to invest and are fighting to keep up with Amazon. Walmart, for example, is pushing their partnership with Google Assistant and their grocery pickup and delivery process. Users are asked to say, “Ok, Google, ask Walmart to add eggs to my cart,” and the Google Assistant will recommend and add your preferred type of eggs into your cart. The program also makes personalized item recommendations based on your Walmart shopping history and preferences. When items are added to your cart, they can be looked over on the Walmart app or their browser. This voice skill is practical, yet it also is a creative opportunity for Walmart to show their expertise and persona to their customer.
While e-commerce isn’t new, the user experience around voice skills is still in its infancy. In a literal sense, voice is truly being an assistant to the shopping process, and we’re still going to our devices to check and confirm our orders are correct before purchasing. It’ll be some time before we fully trust voice skills to understand what we’re saying and know the different SKUs of products we’re looking for. Even still, starting with voice today will help your brand develop a useful tool rooted in the brand’s personality that can continue to evolve as consumer trust grows.
Recognize that e-commerce is changing. As technology has developed, e-commerce will transform in the next decade, and consumers are ready to explore their shopping experience in different ways.
Experiment with a range of new point of sale opportunities. Think about how your product or service is used and where your consumer is when they’re thinking about you. Should you build out an influencer strategy with e-commerce? Maybe your brand is more likely to be thought of while someone is driving in their car, so voice would be a great area to start experimenting. Do you interact with younger consumers more often? If so, an SMS program might be more approachable and friendly for them.
Rebuild the narratives around these new e-commerce models. E-commerce is ripe for creativity to come in and provide a new experience for consumers. If the content we value in our news feeds and from publishers isn’t catching the attention of today’s consumers, e-commerce presents itself as a possible solution for that problem where consumers will continue to interact with brands at that level.
As we look to 2020, e-commerce should play a bigger role in your customer experience. Transactional content is the future of advertising. Create ads to complement the bigger story you’re telling, but don’t forget to tell your story where customers are paying attention on the digital shelf.
Categories: 2020 Digital Trends