While most countries are beginning to restart economic activity, for many businesses the last few months have been tough, as lockdown measures cut into supply chains, retail channels and working practices. In response, brands of all size and digital maturity have rushed to find new ways to access customers online.
Finding the right e-commerce strategy isn’t always simple, as experts from Wix, Jellyfish and Ruby Love shared with The Drum during The Drum’s Can-Do Festival.
Giving context to the scale of growth that e-commerce has seen this year, Wix head of e-commerce marketing Liat Gurwicz, says its merchants were seeing anything between 100-500% growth in leading categories.
“In terms of agencies and professionals who create websites for clients on Wix, they've created two and a half more e-commerce websites in comparison to the same period last year. Times are definitely different and for agencies and businesses alike, it's also an opportunity to evolve and grow their business,” she says.
The case for marketplaces
For many brands this year, the main factor dictating e-commerce decisions was speed to market and the lure of a healthy marketplace. Platforms like Amazon and eBay, or even Facebook and Google offer a ready-made audience.
Gurwicz says the starting point should always be deciding what you want as an outcome, and then working towards that. If your desired outcome is to attract new customers, then a marketplace could be the right choice, she says.
“Online marketplaces are great ways to reach customers who are ‘actively searching shoppers’, they can easily browse through many products from many different categories. Amazon and eBay are among the most popular marketplaces that provide a brand access to many shoppers. However, they can also be really, really competitive. As such, I sometimes find that smaller, more niche marketplaces might actually end up offering a brand more visibility and generate more sales, even though they’re not necessarily as big as the larger marketplaces,” she adds.
Rob Pierre, founder and chief executive office of digital agency Jellyfish says a key problem with the marketplaces is that they act as walled gardens, so brands have less access to data. However, he argues that for consumers they also fulfil a role consolidating the number of relationships we have to have with brands.
“You have a certain limit to the number of relationships you can have. A marketplace is a consolidation, it’s a group of people that you can get access to. However, if every single brand was trying to build a relationship with you, you can imagine the impact that’s going to have. We have only got so much capacity. There will be some who you are going to be best friends with; customers that you are going to build great relationships with, that you can talk to directly and get feedback. They are probably going to be your biggest advocates and help you even sell your product in the future, but you also have to consider the marketplaces. That balance of making sure that you’ve got a presence everywhere is really important,” he says.
The case for D2C
Ruby Love is a D2C period underwear and swimwear brand, based out of New York. Founder Crystal Etienne has thus far built her loyal customer base off the direct website, as well as marketing across social and digital channels. She too has seen her business grow during the pandemic, as people seek new brands to help them be healthier and happier.
Etienne says that while she’ll consider marketplaces in the future at some stage, she’s focused on building her brand directly because it’s the best way to get to know your customers.
“For the last couple of years that I've been running the company, I found that direct was the best to get close to our customers. We know who our customer is. I can tell you what my customers are doing right now before they even say anything, when they’re mad, or when they're happy. We know exactly who our customer is. I think by not going on the marketplaces, it allowed us to do that, to really get in-depth with our customers and know who we’re selling to. You really don’t have a business unless you really understand who you're selling to,” she says.
Gurwicz adds to this point, arguing that the reason D2C brands are such a disruptive force is that they have mastered the art of understanding the customer.
“At its core D2C allows a business to disrupt established industries by cutting out the retailer in order to own that end-to-end relationship with the customer. Typically, DTC brands can be born on the web, targeting directly digital-first audiences or online customers and they’re very focused on driving a more intimate relationship with their customer,” she adds.
The case for both
Ultimately, every brand’s e-commerce needs are different. There was a consensus that different needs require different approaches at different times.
For Gurwicz, brands need to consider a test-and-learn approach because each channel has costs and resource attached to it.
“Every e-commerce channel has a cost. It has a monetary cost of using it for your business and marketing costs and it has time cost for you, for your team, for your efforts. It’s something that a brand should be willing to test and try different channels in different marketplaces and see where they're able to have an impact and not be afraid to try new things. Brands should also not be afraid to switch it up when something isn't being as effective as it potentially was before, or if your customers are behaving differently, or there's a new trend or a new opportunity somewhere else. Use whatever channel works for your brand and for your customers at the right time for your business,“ she says.
As shoppers return to physical stores, the question on a lot of retailer’s minds is whether they need to continue to invest as heavily in e-commerce.
Pierre says that people are unlikely to go back to being entirely reliant on physical commerce now that they have changed their behaviours. For brands, this means that fusing the best of the online and offline experience will be more important than ever.
“The world has changed during this period. Three years of change have happened in three months. All brands need to consider now is how you can engage and how you can exploit all the benefits that digital brings to our environments,” says Pierre.