FACTORS THAT WILL SHAPE ONLINE BUSINESSES IN THE 2ND QUARTER OF 2020 AND HOW YOU CAN RESPOND TO THEM
For me there are basically two markets you can make money from as an individual or a business.
The fact that bill gates’ long time prediction that “In the nearest future, There will be two kinds of businesses, those going online and those going out of business”. Which simply means that if you own a business and you don’t have online presence, you will be going out of business sooner than you can imagine.
Now, there is hardly any successful business out there that does not have online presence. It is either you are full time online business or an offline business with online presence. Whatever you are doing, you have to be on the internet. Every business will benefit greatly from having a presence online.
The first quarter of 2020 as been full of events for ecommerce in particular and online businesses In general. Following the trends of business activities that took place from march till end of June, one can simply say the digital market has come to stay with potential to be the number one viable market for businesses based on it technical innovations.
Businesses like shopify launched a marketplace, Google relaunched organic product listing, and Facebook introduced “shop” and thousands of other changes. Hence, why your business should be online 2020
With so much that happened in the first quarter with the outbreak of a pandemic that paralyzed all physical activities, it is till recorded that tens of thousands of businesses were able to sell online for the first time.
Millions of business transactions that were meant to take place in physical stores took place online. Buying and selling went to top priority for everyone as high categories of retail recorded 100% online transactions.
It was also noticed that some areas of eCommerce were struggling- particularly areas of fashion, events and travels while many retailers such as DIY Store, home exercise businesses, saw the eCommerce channels allowing them to thrive with some recording up to 90% for eCommerce sales in May when compared to previous years.
So, Why your business should be online 2020?. In this second quarter, it’s likely that many will be shopping in stores again as many will go back to work but it’s unlikely that eCommerce will go back to the previous level prior to march 2020
Let’s examine areas where retailers and eCommerce companies can focus in so as to succeed in the second half of the year
Data and AI
Data is something that is very important to businesses. Generally, there is usually a lot more data in the digital market than the traditional market which in theory pose a competitive advantage. It is more important now because many regular business patterns have changed. Customers, suppliers and even competitors are behaving differently.
For instance, many businesses who have budgeted a particular PPC spend per month at the beginning of the year with assumption of how many new customers and revenue that would bring each month on the basis of last year’s number plus the uplift you’d expect your level of growth.
Now after panic buying and physical stores being closed for months, customers of different financial stability and competitors are either leaning into extra demand or pushing efficiency in where there’s lack of demand, it’s likely your PPC market has changed hugely. And that same factor applies across every marketing channel.
Amazon, Alibaba and others are built on principles of data driven merchandising, product recommendations, matching customers with the products they are most likely to buy because more customers than ever are buying online at the moment.
If your competitors are using data to quantify their behavior and react to it and you are not, that gives them a competitive advantage to acquire more new customers at this strange moment and service them long into the future
The AI which is the second part of this is one of those indefinite terms that was hypes for many years. A little like ‘the year of mobile’, which was hyped about a decade before it quickly engulfed everything after everyone has stopped talking about it. ‘The year of AI is one of those things that have been talked about as on the cusp for the last few years.
And just like the ‘year of mobile’, ‘the year of AI’ (or ‘year of machine learning’) basically came and engulfed us a few years ago without many really realizing.
Most of the ads you see around the web have been put in front of you in part because of machine learned algorithms.
Google’s ads engine has moved more and more toward AI tools.
Facebook, Instagram, Twitter and other major social media use machine learned systems to decide what you as a reader will or will not see. We question ‘free will’ generally but there’s no free will on social media. What we see is guided by Robots.
In most cases, machine learning is for carrying out relatively simple tasks like:
Like showing customers the products they are most likely to buy, rather than random items from your catalogue.
Estimating propensity to buy, to inform your CRM campaigns.
Ranking your category pages to maximize your most likely gross margin return
Categorizing customer support requests to speed up life for your CS team.
Digital skills have changed the world over the past 50 years. Four of the current world’s top 7 richest people made all their money through digital technology (Jeff Bezos of Amazon, Bill Gates of Microsoft, Larry Ellison-software, Mark Zuckerberg of Facebook Inc.), and the other three have a huge reliance on it- from Warren Buffet and hid investment to Bernard Arnault and his luxury empire.
Every day, there are fairly major stories of big business announcing facing online or employing more people to help with their ecommerce with the UK government also announcing their plans to upgrade the county’s ‘digital strategy’, this seems as if they basically want to grow people’s digital skills).
In the past, efforts made to grow ‘digital skills’ have often been pushed, trying to shove a shoulder up hill; in this case, the boulder is rolling the other way, and we are rushing to catch up with it. Across many sectors, digital skills will be in higher demand than there is supply.
The job market is a state of flux, with some great people, in unlucky segments, looking around for new roles. And remote working has been normalized. Combine the two of those and it means business can find talent to help them grow further, and if they are willing to continue in partial remote mode, that talent may be 100 to 10,000 miles from their Head Quarter rather than within an hour’s commute.
In some businesses, personalization does not really matter. For instance, if you are selling largely via Amazon, Google shopping ads, then you need not worry about personalization because their algorithms will do that for you.
But, if your stock is a few hundred products or anything above, matching your customer with the products they are most likely to buy is likely the simplest method to increase the chance that they will buy from you in any visit to your website.
Whereas at one stage, decent personalization tools were confirmed to larger retailers, but today they are abundant, simple to use and simple to launch. Simple enough that most eCommerce sites could have something better than their current system within a couple of months or even weeks.
Many more customers are buying online right now, and many of them have formed habits around amazon, jumia and big eCommerce around. Frankly speaking, the less ‘savvy’ a customer, the less they are likely to compare several sellers and the more they will likely go to Amazon by default.
You only have to look at how many of Amazon’s deliveries arrives in your area vs. every other company to get an idea how much covid-19 has impacted the largest online retailers in the country’s level of demand.
If Amazon is the default option for your merchandise categories and you don’t create compelling reasons for customers to buy from you, then it’s likely you will have a harder and harder time, either through losing customers to them or through paying them advertising fees to show your products to their customers.
“Now, there is hardly any successful business out there that does not have online presence. It is either you are full time online business or an offline business with online presence. Whatever you are doing, you have to be on the internet. Every business will benefit greatly from having a presence online”.
POTENTIAL OPTION FOR CREATING THAT COMPETITIVE ADVANTAGE INCLUDE:
Some customer may buy a product from a site because their algorithm pushes them to the hardest, but many customers will actively seek out a site because they know and trust the brand. You cannot become Amazon or Apple overnight and it has never been simpler or cheaper to communicate your brand and gain some competitive advantage.
Building a brand takes years but, pushing forward the best elements of your brand on your website and your products attributes on other’s website can take just a few hours.
If customers are aligned to the mission of your company, there’s a huge chance they will buy from you rather than just taking the default option of a popular brand
While sites like Amazon do invest in content, few customers visit the site with any intent other than a transactional purchase. Having an authoritative content source within your own category is a good way to bring in customers before they reach the final transaction stage. With Google pushing featured snippets more heavily, and many new eCommerce by default, customers willing to try new providers, H2 is a good time to spend some time on pushing forward ‘content’ if you are not able to.
I once spoke with someone fairly high up at Amazon and he asked me “do you know why people buy from Amazon”? – I can’t remember my answer, but his top three factors were: 1. Logistics, 2. Customer Support, 3. Price and selection.
While price and selection are different factors, the first two factors here are basically about guaranteeing smooth customer experience. If amazon believe customer experience is their #1 and #2 factors and you wish to compete with them, it should at least be on your radar as a factor.
Many customers buy from certain stores such as Amazon out of sheer habit. They have trained themselves to check there first for any given product. It is equally possible for businesses or other ecommerce companies to build in this habit elements. For instance, ASOS grew to prominence based on the power of ‘new style’. Customers would check back every day to check out new launches. Boohoo followed recently with same strategy and has a huge audience of habitually daily site checkers.
Apart from ‘newness’, there are various ways of encouraging the habit of visiting your site regularly or visiting it first when a particular product jumps into your potentials customer’s mind; putting some focus on this may likely take some time, but likely not heavy cost.
Even if you sell via Amazon or a popular brand, there’s no need to put all your catalogue on there. Even if you simply hold back new launches for few days from Amazon for instance and factor that into your new launch programs to try and draw customers directly.
You can have the advantage your big competitor does not have if you can build in convenience or a tie to a reachable physical location. At a time when many of us are spending online, and where Amazon for example is the dominant business in most categories, thinking through some of the above may only take few hours and may reap reward that compound over months or years.
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