ECOM: DISRUPTION DELIVERED NEXT-DAY...ELECTRONICS-5% +6% STATED TRUTH CONFIDENCE IS IMPACTING...
Transcript of ECOM: DISRUPTION DELIVERED NEXT-DAY...ELECTRONICS-5% +6% STATED TRUTH CONFIDENCE IS IMPACTING...
ECOM: DISRUPTION DELIVERED NEXT-DAY
FAST FORWARD
THE TAILWIND OF COVID-19 HAS DRAMATICALLY ALTERED THE LANDSCAPE OF ECOMMERCE
PLACING ECOMMERCE SQUARELY AT THE CENTRE OF SALES STRATEGIES
WHICH HAS SIMULTANEOUSLY SHORTENED AND WIDENED THE FUNNEL ALL AT ONCE
AND DIGITAL-NATIVES WERE PERFECTLY POISED TO BENEFIT FROM THE SURGE IN DEMAND
+9% TRAFFIC GROWTH+30% CONVERTED VISITS+7% CONVERSION RATE+11% PURCHASE FREQUENCY
NECESSITY > RISK: RISING NUMBER OF 3P SELLERS
0%
10%
20%
30%
40%
50%
60%
70%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
6.9% CAGR
EXPECT COVID-19 TO
INCREASE THIS NUMBER
COVID-19 HAS BROUGHT DIGITAL TRANSFORMATION TO THE FRONT OF THE QUEUE
ON THE SUBJECT OF QUEUES...
JANUARY FEBRUARY MARCH APRIL
2019 2020
+900%
…
IT’S THE AGILITY OF NEW ENTRANTS TO FILL THE GAPS LEFT BY INCUMBANTS
+62% +45%
+94% +26%
SOURCE: SHOPIFY EARNINGS CALL, Q1 2020
THERE ARE ABSOLUTELY NO BARRIERS TO ENTRY; THOSE WHO HAVE MANAGED THE TRANSFORMATION ARE REAPING THE REWARDS
CTO
BUT COMMERCE TRANSFORMATION
REQUIRES A LEVEL OF READINESS
CUSTOMER
EXPERIENCE
CONNECTION
COMMERCE
‘ALGORITHMIC
RETAIL’ HAS
DEMOCRATISED
WHO WINS.
ECOMMERCE IS A
MERITOCRACY. (SALES VELOCITY)
FULFILMENT(METHOD)
DIRECT
FACTORS
I
$
INDIRECT
FACTORS
INTENT-RELEVANCY(TITLES, FEATURES, PDP’S)
AVAILABILITY(IN-STOCK RATE)
PRICE(MARGIN/BENEFIT)
SALES VELOCITY
RATINGS(VOLUME & SCORE)
ASSETS EBC
MEDIA
PROMOTIONS
AND ECOMMERCE IS NOT TO BE IGNORED:WHEN OLD HABITS BREAK, LONG-HELD BEHAVIOURS BREAK WITH THEM
52
77
55
48
54 55 5652 51
Australia China France Germany India Italy Spain UK US
Source: How are habits formed: Modelling habit formation in the real world, Lally. P
NEW HABITS FORMED:
66 DAYS
A SURGE IN SALES SPURRED GLOBAL OPTIMISM
UPON REOPENING OF MALLS IN CHINA, SHOPPING STARVED CONSUMERS INITIALLY OVERCOMPENSATED BY SPENDING MORE THAN NORMAL
WHILE IN-STORE PURCHASES SLOWLY RECOVER, LABOR DAY WAS SEEN AS THE FIRST REAL ACID TEST OF RETAIL RECOVERY & ECOMMERCE DIDN’T DISAPPOINT
+28%SALES YoY +50%
CATEGORIES
SOURCE: AZOYAGROUP
WHEN THE DUST SETTLES
STATED TRUTH +REVEALED TRUTH = ACTUAL TRUTH
Q: ‘I’M WORRIED ABOUT MY FINANCES AT THE MOMENT’
A: 27TH APRIL 2020
US: +48%
UK: +39%
IN: +70%
CN: +47%
ES: +62%
IT: +58%FR:+46%
DE: +34%
SOURCE: MINDSHARE COVID-19 TRACKER, WAVE 3
THERE HAVE BEEN WINNERS AND LOSERS ACROSS THE CATEGORIES; APRIL IS SHOWING SIGNS OF MARKET GROWTH.
+21%
FOOD & DRINK
APPAREL BEAUTY PETSMARKETPLACES
-7% -5% +10% +10%
SOURCE: SIMILARWEB, CATEGORY ANALYSIS
JAN-APR YoY
APRIL YoY +46% +1%-7% +17% +8%
CONSUMERELECTRONICS
-5%
+6%
STATED TRUTH CONFIDENCE IS IMPACTING ATTITUDES TO SPENDING ON NON-ESSENTIALS
REVEALED TRUTH
ACTUAL TRUTH
SALES OF ESSENTIAL PRODUCTS HAVE DOMNITED, BUT OTHERS ARE REBOUNDING
SOME CATEGORIES ARE NOT JUST REBOUNDING BUT DELIVERING YoY GROWTH
In times of uncertainty, there are some things we know we know
Known Known #1: There are only so many hair clippers you need
Source: Change in UK Search Volume, Google,2020.
eCommerce maturity accelerates
China
$1.9bn
US
$586m
UK$142m
Japan$115m
South Korea$69m
Germany$82m
France$70m
Canada$50m
Russia$27m
Source: eMarketer, 2020.
Shoppers will form new channel preferences
Known Known #2: We’re entering a huge recession
And in recessions, consumers become more value conscious
Pricing strategy will become mission critical
Pricing strategy will become mission critical
Known Known #3: Private Label shopping is rife during recessions
Source: Kantar, April 2020.
At the same time, shoppers are more loyal in eCom
Buy the same brand when both
purchases happen online
NEW PRIORITIES
RE-EMBRACING THE LOCAL
AND SHIFT TO SELL IN NEW WAYS ONLINE
BECOMING THE HEROS OF THEIR LOCAL COMMUNITIES
BY BUILDING MORE PERSONAL CONNECTIONS
BIG BRANDS ARE BUILDING DIGITAL COMMUNITIES AT A MACRO LEVEL
BIG BRANDS ARE BUILDING DIGITAL COMMUNITIES AT A MACRO LEVEL
AND FOCUS ON CONTENT TO ADD VALUE
AND FOCUS ON CONTENT TO ADD VALUE
BUSINESSES KNOW: ADDING VALUE NOW WILL SERVE THEM WELL POST-CRISIS
CRUCIALLY: MEANINGFUL, RELEVANT CONTENT DRIVES SALES
CRUCIALLY: MEANINGFUL, RELEVANT CONTENT DRIVES SALES
TRAFFIC
SALES
+33% YoY
+48% YoY
TRAFFIC
SALES
-15% YoY
-5% YoY
Source: Similarweb, UK, March 2019 vs. 2020, Visits & Converted Visits
CONNECTING
CONTENT +
COMMERCE
CONNECTING CONTENT + COMMERCE
HYGIENE WILL SHAPE FUTURE SHOPPER CHOICES
are more aware of
their hygiene habits
& behavioursSource: Covid-19 Tracker, Mindshare, 2020.
IN ECOM, WE WILL SEE BRANDS EMBRACE NEW TECH AS A RESULT
AND BUSINESSES
RE-ASSESS SALES
STRATEGIES
NOT THE ONLY CRISIS WE FACE
SUSTAINABLE COMMERCE
TAKEAWAYS
1 2 3
eCommerce shows tremendous opportunity. Transformation needs to happen quickly and focus on Customer Experience +
Connection.
Brace for a world of savvier, price conscious shoppers. Setting brand preferences now will bring long-term
advantage.
Covid-19 is reshaping shopper priorities.
Anticipate what will matter to consumers to become
future fit.