AG Voice | The Ecommerce Evolution
The initial journey: The initial phase of ecommerce from 1995-2000 was about building a website and bagging orders. Ecommerce players vied with each other to build user interface and shopping carts that resembled the brick and mortar experience. Up selling and cross selling were the major themes with limited focus around enhancing user experience. Ecommerce websites were basic in graphics, design, coding and programming. The early phase was dominated by very few product categories such as travel, books, music, computers etc. Amazon and eBay dominated the market, however they had not turned profitable yet. Although the online retail sales kept increasing, there was fair degree of skepticism about the strength of the online model and the breadth of products that can be sold online; one of the leading furniture companies Furniture Brands International stated in 1999 that the home furnishing category did not fit the web, however the home furnishing category clocked online sales of nearly $4 bn in 2007. A number of players shut shop despite investing millions as there was no trace of profitability. Brick and mortar retailers resisted attempts by brands to sell online and Levis was arm-twisted by retailers to close its ecommerce site in 1999. Online shoppers were an impatient and suspicious lot in those times!
Emergence of Ecommerce platforms: With the onset of ecommerce, the companies relied heavily on internal IT departments to build custom applications from .Net, Java and ColdFusion based on Microsoft or Oracle databases. Overtime, such custom applications also started to incorporate open source components such as MySQL and PHP. As the ecommerce industry matured, there was a need to enhance user experience. With time, there was better understanding that the platforms are much more than just about facilitating online transactions, - sales & marketing functionality is integral to ecommerce platform. Online retailers increasingly realized the importance of platforms to help them meet marketing goals for increasing traffic, boosting conversion and improving the average order value. This resulted in emergence of commercial ecommerce platforms such ATG, WCS and Microsoft Commerce Server. These platforms needed less custom code development and hence speeded up time to market for brands. The initial challenges in terms of integration with overall business and lack of social media integration were overcome by seamlessly integrating with CRM and product information channels.
Genesis of Social commerce: Social media changed how consumers interact with brands and brought in its wake exciting opportunities for brands to market themselves more effectively. Social media was seen as a key to driving traffic to stores and brand building campaigns. Slowly, retailers realized the importance of user generated content and started incorporating ratings and reviews, videos, and co-browsing functionality in their websites. The most widely perceived advantage of user generated content among ecommerce players was improvement in site conversion rates, followed by customer retention and better SEO. The impact of social media in driving more engagement with consumers was never in doubt; however there was a question mark over the ability of social media to generate revenues for brands.
But there was a parallel school of thought that felt social media led by Facebook will be the next big thing in ecommerce and hence social commerce in its earliest avatar was incepted. It was anticipated that consumers will find buying on social channels attractive and convenient. Quite a few leading brands placed their bets on Facebook and made investments to sell through this channel. But this proved to be highly misplaced and Facebook commerce failed to live upto the hype it had generated initially. In 2010-11, a number of brands such as GAP, JC Penny and Nordstrom placed started Facebook storefront to drive online sales but within a short period of time all these brands closed these storefronts. The major reason for very slow adoption of Facebook store as a shopping destination was absence of differentiation from brands’ own online stores. Secondly, shoppers go to the sites where they can easily find what they are looking for thus Google is integral to the online shopping process and Facebook or social media as a whole can’t really be considered a search engine. The payment method was another major challenge in the way of social commerce adoption among retailers.
Content marketing: the next phase of ecommerce evolution: Driving the right kind of content is essential for the success of any brand online. Digital marketers also call out content marketing as their topmost priority. The content management platform and strategy should account for consumer desire for product information in a clear, consistent and intuitive manner. It is becoming increasingly important for brand marketers to tell product stories through a highly personalized and contextualized content supplemented by interactive digital experience. This is also leading to increased convergence between content, commerce and social platforms, especially in customer engagement functionalities such as page templates, navigation tools, site search, personalization, content targeting, and recommendations. It will be of immense value for brands to shed a siloed approach towards transactional and non transactional experiences for consumers and focus on a hybrid platform that incorporates product marketing content besides pricing, inventory and recommendations related data that will eventually drive more conversions.
Leveraging social commerce for pushing content strategy: Innovation in the social media space is impacting ecommerce and content strategy of retailers in a huge way. Brands now need to focus on highly personalized, intuitive browsing and buying experience for consumers through extensive visual communication. Impact of imagery in enhancing user experience and driving sales is being increasingly felt as demonstrated by the success of Pinterest, and ecommerce websites will do well to imbibe best web design practices. Brands need to tread cautiously in monetizing social space and not commit the mistake of treating social media platforms like a marketplace – a move that backfired for leading retailers. Social commerce needs to be seen more as an enabler of online sales and boosting brand message rather than a direct channel. Facebook’s omnipresence on the internet can continue to be leveraged to good effect by brands through prominent use of imagery for brand promotion, contests and coupons for better connections with consumers. Pinterest is being optimally used by some brands to cross sell and upsell by deepening the engagement levels. Pinterest has also introduced email alerts for price reductions on pinned items by the users – a feature highly valued by bargain hunters. Amazon has started a new feature called Amazon Collections that is modeled on Pinterest; it allows consumers to curate images of their favorite Amazon products and display them visually in different lists and follow other users sharing same interests. EBay is also letting consumers view and follow trending product groups created by other users on its home page itself. Instagram’s direct messaging feature helps companies to share product photos and 15 second videos with consumers.
This visual way of communicating is helping brands deepen their engagement with consumers by expressing details of products and services. Levi’s reached 7.4 million consumers over a 9 day campaign through Instagram that targeted users between the age group of 18 and 34. Twitter has also realized importance of imagery and introduced Twitter cards that allow brands to add images, videos and product descriptions to tweets. Studies have found that tweets with images received a 36% increase in clicks, a 41% increase in retweets and a 55% increase in leads. Retailers can utilize social media channels to good effect for driving better engagement and subsequently with them through innovative use of imagery, videos and user generated content
By, Madhusudan Narayana Murthy, Director, Technology, SapientNitro
About the Author:
As a Director and a part of SapientNitro’s digital commerce practice, Madhusudan Narayana Murthy is responsible for solution definition & delivery of eCommerce engagements for SapientNitro’s North America business, focusing on Mid-west and Canada. Additionally he is also a member of Bangalore Leadership team for Sapient’s Bangalore office.Madhu has over 16 years of combined Technology & Consulting experience spanning key functional areas of Online Commerce transformation engagements and Banking & Financial services industry.