5 Things eCommerce Managers Should Be Doing Differently The 2020 Black Friday & Cyber Monday guide - 5 things eCommerce managers should be doing differently
With a global pandemic still raging, the context for ecommerce has changed, possibly for good. Measures put in place during lockdown, and restrictions that are still in force mean that this will be a Black Friday like no other. To avoid losing revenue, ecommerce retailers will have to change their strategy to take account of new customer behavior and expectations.
What can online retailers expect? In this book, we’ll guide you through the new context for ecommerce. We’ll identify areas where online retailers are losing money, and highlight the strategies they need to put into practice before Black Friday to maximize revenue and increase customer loyalty.
The new context for ecommerce
In the past, Black Friday has been a period of mayhem in physical stores as people jostle and press to get the latest deals. At the same time, the online component of Black Friday has continued to increase, with one analyst estimating that as much as 40% of Black Friday sales happen online. In 2019, Cyber Week represented one third of annual revenue. That’s likely to change this year.
1. Black Friday will be bigger than ever
This year, you can expect that percentage to increase. As you’ll see, in a global pandemic, consumers will be more cautious about crowded shopping spaces, putting in-store sales in jeopardy. Many analysts predict that Black Friday and Cyber Monday will be bigger than ever, but that most of that growth will take place online.
2. COVID-19 has accelerated the pace of BFCM online shopping growth
Even before the pandemic, customer behavior had already started to change, along with their expectations. According to Google, 93% of shoppers use online resources when contemplating a purchase.
Additionally, 68% of shoppers purchase items both online and in-store. Mobile devices are now integrated into the shopping process, with 42% of customers using them to complete purchases, according to the Quiq Retail Mobile Messaging Trends Report.
Now, with no sign of a COVID-19 vaccine ready for mass use in November, many people are choosing to stay at home and continue to shop from there.
3. Older consumers are shopping online
Traditionally, older consumers were more likely to shop in-store. For many, it was a social experience. But now, even people in the over 65 age group are now also buying online. When it comes to holiday shopping, that age group spends the most on gifts, so that means you’ll get even more traffic to your ecommerce website as the holidays approach.
4. Ecommerce competition is increasing
One result of this new context is that more retailers are looking to move online, creating an increasingly competitive environment. And, of course, Amazon continues to grow. The ecommerce giant already accounts for half of all online sales, and 44% of product searches start on Amazon’s site. If consumers find what they need on Amazon, they have no reason to shop elsewhere.
In addition, because of COVID-19, Amazon’s major shopping event, Prime Day, has been moved to October 2020. With some deals regularly outdoing those available on Black Friday, this could take a chunk out of expected Black Friday revenue for many retailers.
5. Q4 Promotions will be longer and shallower
Speaking of Prime Day, the changed date has extended a trend that has already started to happen. Black Friday started as a single day, but over the years the promotional period has stretched from early Thanksgiving and Black Friday sales all the way through Cyber Week to Christmas.
With Prime Day 2020 in October, that stretches the promotional period even further. That means ecommerce retailers need to start thinking about Black Friday even earlier. And with good reason. According to a Deloitte study, early shoppers spend 28% more than those who wait later.
6. Consumers are more concerned about price
There is another factor for ecommerce retailers to be concerned about: consumer price sensitivity. The pandemic has increased unemployment for people around the world, and many who are still working through this period have been forced to accept reduced salaries.
For online retailers, adapting to increased price sensitivity will be especially critical heading into Black Friday and Cyber Monday. Customers are looking for deals and they expect online retailers to provide them. Price sensitivity may also be evidenced in risk avoidance, with customers sticking to what they know rather than trying something new.
The new context: the bottom line
While there’s an opportunity for ecommerce retailers in the shape of increased traffic to their sites, there are several potential threats to revenue. As Deloitte points out, online competition will be fierce and customer retention is going to be even more crucial.
In this new high-traffic, but price sensitive market, it is more important than ever for companies to adopt new strategies to maximize their traffic and avoid losing potential customers and revenue.
It also means that retailers have to be more vigilant than ever about the ways their websites are already leaking revenue. We’ll look at those in the next section.
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3 Ways eCommerce Retailers Lose Out
In the current era, it’s almost impossible for retailers to use their off-line space to improve earnings, which has always been a great strategy in the past. It doesn’t matter what you do to improve your store, if people aren’t visiting it. Instead, you need to focus on maximizing earnings and minimizing losses online. Here are three areas where ecommerce retailers are losing money.
1. Customer Journey Hijacking
Imagine that a potential customer lands on your site. The customer is all set to buy, then spots an ad for a similar product at a lower price. Instead of shopping on your site, that potential customer clicks on the ad, and away from your site, and may never come back. That’s called Customer Journey Hijacking. It’s where traffic hijackers use code to inject unauthorized ads for competing products that appear on your web pages.
If you’re a large online retailer, Customer Journey Hijacking could cost you millions of dollars. Namogoo’s data shows that between 15% and 25% of website visitors are subjected to unauthorized ad injections throughout the year. A majority of these ads feature similar products and competitor offers that appear across different sections of the website.
These compelling shopping alternatives are effective: data across online industries shows that ad injections reduce revenue by 1.5% to 5%. So, if you’re expecting to sell $10 million in merchandise this Black Friday, you could lose up to $500K due to these consumer-side disruptions.
Why is this an even worse problem to have this year? Because price-sensitive consumers are more likely to click away, and, as we’ve seen, post-pandemic customers are VERY price sensitive. Namogoo’s research shows that 53% of consumers will click on injected ads offering lower prices. That means reduced on-site engagement, making it less likely that visitors will add multiple items to their carts. And with fewer people completing purchases, that means reduced conversions and increased checkout abandonment.
Injected ads insert friction into your customer journey by taking some of your customers out of the loop. But it’s not just revenue that is at stake. It’s also your brand’s reputation. Namogoo’s consumer survey research shows that 78% of customers who see injected ads on your website will view your brand negatively. That means they may click away and never come back. You lose out on the potential to create and retain loyal customers who shop with you time after time. In effect, when injected ads interrupt the customer journey, that reduces customer lifetime value and hurts the long-term stability of your business.
2. Ignoring the mobile and omnichannel experience
It’s no longer a surprise – or at least it shouldn’t be – that mobile devices are a crucial part of the customer journey. With so many people staying at home, it seems likely that it will become even more important.
Poor mobile optimization costs ecommerce businesses engagement, conversions and sales. Research from Google shows that when mobile page load time goes from 1 to 5 seconds, the probability of visitors bouncing increases to 90%.
And if your mobile visitors encounter any issues – like additional costs or glitches at the checkout – they’ll definitely leave. Barilliance shows that the mobile cart abandonment rate is more than 80%.
But it’s not just the mobile experience that can cost retailers money. Failure to have a robust omnichannel experience is also a problem. ReadyCloud shows that 2 billion people made purchases from their phones in 2019. Of those, 95% did research on their phones before buying.
The numbers of mobile purchases on Black Friday and Cyber Monday have increased steadily over the last five years. With online shopping at an all-time high for the coming holiday shopping period, those numbers are likely to get even higher.
Once again, Amazon and other large retailers have set the bar. Customers expect to be able to switch between a mobile app, the mobile web, their tablet and their laptop and have a seamless experience. If your mobile experience makes them have to re-enter information, they won’t be impressed.
3. Not using social selling
With billions of social media users online, no business can avoid social media as a sales tool. Social selling is connecting with potential customers and nurturing them via social media. It’s about being where your customers are. Global Web Index reveals that 54% of social browsers use social media for product research.
One of the areas they look at is product and business reviews. Shoppers expect to see detailed reviews that show them they’re making the right choice. If they like what they find, you could win the sale, if you make it easy. Since you can now set up a shop on Facebook or Instagram in a couple of clicks, failure to do so means you’re missing out on potential sales on Black Friday and during the holiday season. And once you’re set up, getting those positive reviews will boost your sales.
5 Key Strategies for BFCM in a Post-Covid-19 Landscape
So, how can you avoid losing out? In this section of this guide we’ll look at the strategies you need to implement to remove friction from the buying process and ensure you don’t lose money this coming Black Friday.
1. Avoid Customer Journey Hijacking
Before doing anything else, ensure that 20% of your web traffic isn’t already compromised by invasive ads leading them to competitors. With so much of the year’s revenue at stake, the Black Friday period (and the last quarter as a whole) is a particularly active period for traffic hijackers, who use ad injections to monetize this increased traffic by selling impressions and clicks to ad networks.
Preventing these tactics to skim online customers translates directly into increased conversion rates. Our data shows that hijacked visitors recovered by Namogoo convert 2.5x higher on desktop, and nearly 3x higher on mobile, boosting your revenue. In less than 30 minutes, you can eliminate injected competitor ads running on your customers’ browsers, improve the customer journey, and boost conversions and revenue.
2. Improve the Online Shopping Experience
Now’s the time to up your game with the online shopping experience.
More than ever customers will expect the online experience to be fast, efficient, and personalized. Online Retailers are increasingly investing in artificial intelligence (AI) and machine learning. This is not an overnight solution – Retail World Magazine points out that online retailers must have the right customer data AND the ability to use it effectively.
As is often the case, Amazon leads the way. According to BigCommerce, the ecommerce giant uses machine learning to inform product recommendations based on its in-depth knowledge of what customers buy. It uses NLP for Alexa, now integrated into more and more devices, and letting customers shop by voice. And it uses AI to improve delivery times and other logistical areas to keep customers happy.
The future is here. Online retailers need to start planning for it now.
Prioritize the Mobile and Omnichannel Experience
Here’s an important statistic: 69% of customers expect the cross-platform experiences to be seamless. Delivering a connected experience across multiple channels is the only way to ensure that you maximize revenues this coming Black Friday.
While it’s not news that the mobile experience will be a game changer, With many large companies letting people work from home into 2021 and others likely to follow suit, it’s fair to expect that the at-home shopper is going to be an even bigger segment of the market. According to a survey conducted by mobile carrier Twigby, 23% of people have been using their phones more for shopping since being at home.
Even when physical retail spaces start to open back up, customers will likely prioritize their health and convenience. So if you continue to take the actions that retained your customers during the lockdown, you’ll be well poised for the new normal.
3. Implement Subscription and Delivery Services
One of the ways ecommerce retailers will win is by having the right kind of delivery options for customers who are concerned about their health. Contactless payment options are on the rise and are fast becoming table stakes for customers.
Subscription services, where you get a set number of items each month, have proved successful in the past. Well-known examples include Butcher Box, Dollar Shave Club and HelloFresh. According to McKinsey, 15% of online shoppers have one or more subscription services.
Another option for large retailers is a delivery subscription service, similar to the ones offered by food stores and Amazon. For example, ASOS gives customers free delivery for a year in exchange for a one-off initial payment. Price-sensitive customers like this because it means they know that after that first payment, they don’t pay any more for delivery. And it’s good for retailers, because it keeps income coming in consistently.
4. Introduce D2C Options
Some brands that used to sell mostly through online retailers are accelerating their direct-to-consumer (D2C) options. It’s one of the strategies suggested by Global Trade Mag to ensure you remain connected with your customers:
The online magazine says retailers must “employ risk-mitigating strategies, which will allow them to continue reaching customers. These include diversifying supply chains, implementing DTC models, relying on automation, as well as re-thinking the entire business process.”
Even CPG and food processing companies are joining this trend. Customers can now order their beans direct from Heinz, instead of going through a supermarket or other online retailer. They can even buy a nearly new Ford this way.
Even legacy brands have started to get the message, and are pivoting to include a DTC option, or make this the core of their business. This is proving a lifeline for legacy retailers, helping them to connect more with customers, build better long-term relationships, and earn higher margins.
5. Offer Curbside Pickup
If you implemented curbside pickup during the pandemic, prepare for that to be a big point in your favor during Cyber Week. The stats show that curbside pickup has increased more than 200% during the pandemic and that 59% of customers would like to see it continue.
Offering curbside pickup will help you stand out against the competition. It will show your customers that you care about their health, and it will help you to make sales.
Don’t worry if an item is out of stock. Just be sure to communicate. A recent article on Moz suggests that fashion retailers could use the opportunity to encourage customers to create a dream wardrobe, then email them when items are back in stock. This kind of innovative thinking will help you make sales during the holiday season.
How Much Could You Save?
If you prepare your business for Black Friday using the tips in this guide, the potential increase in revenue is huge. For example, don’t forget that by preventing Customer Journey Hijacking, you can enhance conversion for approximately 20% of your traffic during this critical shopping period. Here are some examples:
Deckers Brands discovered that Customer Journey Hijacking was impacting 16.53% and 18.72% of visitors to their UGG.com and Teva.com websites respectively. By ridding their brand sites of ad injections, their overall conversion rate increased by 2.43% on UGG.com, and by 1.78% on Teva.com.
Lamps Plus found that 11.3% of its customer journeys were being interrupted. Namogoo helped the retailer recover that traffic and boost conversions by 3-5%.
D2C brand Dollar Shave Club were shocked to learn that 25% of their visitors were being exposed to unauthorized competitor ads. Eliminating these disruptions with Namogoo has increased their overall conversion rate by 5.5%.
With an 11.7% hijacking rate, ASICS was leaking significant revenue. Namogoo helped the retailer recover that traffic, resulting in 3.2% increase in conversions and a 4.8% decrease in checkout abandonment.
Here’s a quick recap of the key issues facing ecommerce retailers during the holiday shopping season as a result of COVID-19:
- The Black Friday and Cyber Week period will be bigger than ever, as more people shop from home across all age groupsBecause everyone now has to
- gain online attention to maintain a healthy business, there’s more competition than ever in EVERY sector
- With Prime Day now in October, Q4 will be a longer period of shallower promotions, as the buying season stretches out.
- Widespread unemployment and underemployment means consumers are more price-sensitive than ever
- Ecommerce retailers are losing 20% of their traffic to Customer Journey Hijacking at a time when every visitor counts
- Customers expect a seamless mobile and omnichannel experience as more people shop from home
And here’s what retailers need to do to maximize traffic and conversions, and grow their customer base in a way that produces higher lifetime value:
- Stop losing traffic and revenue by implementing Namogoo’s technology to stop Customer Journey Hijacking
- Use AI, machine learning and NLP to make the online shopping experience more targeted and personalized
- Streamline the cross-channel shopping experience, and ensure it works on mobile
- Use subscription services to woo price-sensitive customers AND gain reliable revenue
- Strengthen your DTC strategy to mitigate risk and create a stronger relationship with your customers.
- Offer curbside pickup as this is what more customers expect.
To learn more about protecting 20% of your Black Friday and Cyber Monday traffic and boosting revenues, contact Namogoo.