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Trends and Insight

2020: The Year E-Commerce Took Centre Stage

Experts talk LBB’s Alex Reeves through the seismic movements around the online retail space, and how brands have interacted with these changes

2020: The Year E-Commerce Took Centre Stage

That the Covid-19 accelerated everything digital has become such a truism that we’re sick of writing it. But in case you’ve spent 2020 meditating alone in a Himalayan cave (probably a sensible choice during a global pandemic), I’ll say it again: life got a lot more digital this year.

And because we all need to round off the horrid year with some positive reflections, let’s take a moment to appreciate just how there for us the digital world was when real life became a bit scary. John Caruso, co-founder and CCO of MCD Partners, part of the M&C Saatchi Group, says it’s worth noting how well digital infrastructures have held up throughout this crisis. “It’s not just in e-commerce, but our Internet providers, cloud services, video chat platforms, streaming services, and despite the increased pressure placed on the systems it all just worked.”  

But if you’re looking for a brand story of the year with a happy ending, e-commerce is where you want to look. “It is remarkable to look at the pace of adoption of e-commerce and other digital services this year,” says John. McKinsey reported that we’ve seen five years of growth in first-time usage of services like online shopping, online banking and streaming entertainment in just the first eight weeks of the lockdown. “There’s no going back,” he says.

Some businesses have risen to the challenge and made the most of the opportunity that this rapid disruption has provided, but at a recent virtual conference, John noted that there was “clearly a divide between businesses who have gotten their e-commerce acts together and those who felt they were desperately trying to catch up.” It’s become crucial to the survival of many businesses. “If e-commerce is not a priority at the top of the organisation there’s really no chance.”

But daunting as the prospect may have been, small businesses facing the horrors of the pandemic were able to find digital life rafts if they looked for them. “The good news is that it’s actually never been easier to start selling online,” says John. “You need to pick your starting point and understand what level of resources you are willing to commit.” Whether setting up a small store with Shopify or Squarespace, selling on sites like Amazon and eBay, or even marketplaces like Etsy, existing platforms existed that were designed to be easy to use. “You don’t even need a big agency like us to get going. So get going,” he adds.

Michelle Whelan, CEO of Geometry UK [shortly to become VMLY&R Commerce], agrees, noting that many small businesses managed to seize the opportunity of these platforms and capitalise on that. “Platforms such as Shopify have proved huge enablers for small businesses,” she says, “with ecommerce revenues doubling year-on-year and the volume of merchandise handled has more than doubled.”

In fact, it’s definitely not only small businesses that made use of these tools. Geometry UK has worked with its client Evergreen (owners of Miracle Grow) over the last few years to help build out their retail and e-commerce business. In March, as garden centres closed, it was an interesting moment for the company. “We needed to find a new way of accessing millions of people in lockdown who started gardening for the first time,” says Michelle. They turned to Amazon and created two massive superstores for all of Evergreen’s core brands. “Each brand store helped gardening newbies navigate the right products for their needs using intuitive UX, strategically placed ePOS with a variety of lifestyle and product imagery to help educate people,” she says.

Evergreen was large enough to work with its agency to make changes across platforms and channels, but Michelle adds that small businesses have been able to innovate in ways that are more specific to their needs, even using tools not specifically meant for e-commerce. “Smaller businesses have speed and agility on their side.” she says. “Plus, they often know their customers personally. As a result, creativity around the use of technology, such as Zoom to recommend new books to loyal shoppers, has shone through.”

While the online retail landscape shifted and expanded in response to our increasingly screen-based lives, the real life retail experience also became more closely tied to e-commerce this year. “Companies which had already accelerated digital transformation have innovated brilliantly to provide unique experiences such as virtual showrooms where it’s possible to try on things virtually. Or, shopping assistance via web chats with real people who work in the store. The new Currys PC World ad brings this to life beautifully with web chats that create a complete set of exciting gifts,” says Michelle.  “Big retailers are also doing a good job at integrating physical stores into e-commerce with BOPIS (buy online or pick up instore) and pick up at kerb solutions.”

All of this feeds into a broader narrative of retail channels of all kinds gradually merging in the future to become more interconnected. “E-commerce will evolve beyond speed and convenience and must adopt all the best of physical retailing and social retailing,” says Michelle. “In the very near future, we need to stop thinking about channels individually and start thinking about the holistic commerce experience. For the most part, shoppers are already there. The only question that matters is: how do you help somebody buy from you (rather than your competitors) in their moment of desire or need?”

Social retail has had a whopper of a year, with so many of us finding solace and escapism in the endless scrolling our phones entice us with. As Sharon Jiggins, FCB Inferno CMO observes, a myriad of smaller, less well-known brands have come to the forefront over the last few months using a social-led media strategy. Their success, as she sees it, has been “thanks to people spending more time scrolling on their phones for brands that catch their eye rather than contact with brands in the ‘real world’. The successful brands are the ones who could clearly see that there was a huge opportunity for their direct to consumer offering and reacted quickly to increase their online spend on social channels to get their share of eyeballs.” 

This is an opportunity that John found encouraging too: “As larger companies shifted their focus to e-commerce this year they also moved more media budgets to digital. It’s really not hard to find your consumer during the pandemic, they are like you, right now, sitting down and looking at a screen! So a big focus has been competing to drive digital traffic into e-commerce environments.”

There’s no point peeling consumers' attention off from their social feeds if the destination is disorientating, though. John stresses that “connected with that [rise in digital media spend] has been the re-examination of digital customer journeys, not just optimising paths to purchase but taking a closer look at every part of the experience all the way through to payment methods, repeat purchases and looking for opportunities to innovate in the space.” 

The best brands in this regard have also ensured that sampling their products or services was a critical part of the customer offering, suggests Sharon, particularly where their brand awareness may be low. The key is “to encourage that all important trial,” she says. “I have discovered new organic dog food brands, a plethora of eco-friendly cleaning products and the personal touch of customer service where queries are answered promptly by a ‘real’ person. That, along with personalised follow up emails that actually made me feel like a valued customer, means that they will continue to have my custom in 2021.”

FCB Inferno applied much of this digital-forward thinking to its launch of Pura, a direct-to-consumer baby brand that defied expectations, during lockdown. There were a number of reasons why, says Sharon. “Firstly, the product proposition was spot on for the target market – plastic free baby wipes at an affordable price, so they are good for the planet, baby and pocket. The creative idea - ‘it’s time for a change’ - used expressive babies to deliver uncomfortable truths to parents which was eye-catching and memorable. It was a genuine 360 platform which meant that when the planned outdoor launch had to pivot to a social first launch, it was easy to do as the idea was media agnostic. Plus, working closely with the client decision makers meant that as lockdowns eased and tightened we were able to nimbly react to changing situations including Pura launching a line of hand sanitisers. And lastly, we engaged with influencers that passionately believed in Pura’s mission and their authenticity shone through. We were also fortunate in our choice of celebrity influencers and their increase in popularity during lockdown including I’m a Celebrity Queen of the Castle winner, Giovanna Fletcher.” 

At the beginning of this year, e-commerce was focused on reducing friction and aiming for a seamless experience. But the transformation 2020 has brought has laid the foundation for what Michelle is keen to push for as the next step: “We can now expect e-commerce to evolve to highly engaging, immersive and social virtual experiences,” she says. Social commerce will provide that personal touch people used to find in a store with the convenience of an online purchase. E-commerce is now social. Shopping via Facebook, Instagram and YouTube has injected a sense of fun and joy back into the shopping experience.”

Selling products and services online is only worthwhile if a company has the infrastructure to make sure it can deliver them, of course. And Michelle notes that the pandemic has put a spotlight on weaknesses in supply chains. “Shortages and waste seem to have been interchangeable,” she says. “Investment in the digitisation of the supply chain to predict demand (even in a pandemic) and calculate supply will result in a better experience and have a direct benefit to the environment.

“And with Brexit just around the corner, this could be more important than ever.”

Geometry’s own experience working with Evergreen demonstrates the opportunities that supply chain considerations can open up. Forecasting increased sales for their garden supplies client, the team at Geometry facilitated the adoption of a Vendor Flex Node which embedded Evergreen’s own fulfilment resources inside the Amazon supply chain, making the stores nearly direct to consumer and making sales faster. This led to a 40% increase in conversion on the platform and doubled sales versus 2019, she says.

The landscape for e-commerce looks unquestionably healthier for many businesses than it did a year ago, but brands will have significant challenges in the coming year too. “2020 has sped things up for sure, but larger economic forces will be what shape 2021,” says John, “If 2020 was about e-commerce being up to the test, 2021 will be about facing the needs of our new world. Brands must understand consumer needs in light of the toll the pandemic has taken on their lives.”

This consideration can be seen in MCD Partners’ approach to its work with US retail giant Rent-A-Center, in 2020 as it brings its proprietary lease-to-own (LTO) model into the wider e-commerce landscape through its new fintech subsidiary Preferred Dynamix.  “This platform brings a new level of flexibility to the over 60 million underbanked or underserved Americans who previously had limited options in the e-commerce space,” says John. It’s part of a broader shift that he and his colleagues are watching, as many major retailers in the US have been adopting some form of buy now, pay later program with some services reporting triple digital growth during the pandemic. “We feel payments will be a much bigger e-commerce story in 2021,” he says.
“Before Covid we were in a growing economy, and as marketers we fought for consumers’ attention and explored building brand experiences in physical locations. Now we are in an economic crisis, with most people stuck at home, and crippling unemployment.
“Furthermore the digital divide has grown this year making it even more of a disadvantage for people who don’t have access to technology.” 

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