It was an unexpected year for (insert any industry), but it seems safe to say that 2020 reshaped ecommerce and pushed it to a new level: consumers across the globe have shifted to online shopping and many ecommerce brands have seen a spike in the demand for many goods. Understanding some of the upcoming trends in marketing and ecommerce is the key to developing a successful strategy.
Click it, Buy it
Salesforce’s State of the Connected Customer research report found that consumers now spend 60% of their time interacting with companies online compared to 42% before the pandemic. This trend is expected to keep going strong during 2021 which offers brands a front-row seat to their audiences. In this scenario, every click counts and not just in terms of sales.
This shift towards social commerce brings back the importance of storytelling to build trust as brands will need to cultivate strong relationships with their communities and remove friction from the customer journey. It is also a unique opportunity to collect valuable data, provide more personalized customer service and show the brand’s personality to increase engagement.
Brands will also need to arm their consumers with new transaction tools. With the lines between engagement and transaction becoming more and more blurry in 2021, companies can connect with a growing number of customers via their Instagram and Facebook shops.
Accenture forecasts nearly 420 billion transactions worth US$7 trillion are expected to shift from cash to cards and digital payments by 2023 – and increase to US$48 trillion by 2030. Out of the different digital payment options, Buy Now Pay Later (BNPL) will remain the fastest-growing method. As more and more customers expect choice and flexibility in how they pay, it has become essential for online sellers to offer alternatives.
Live stream for customer engagement
Live streaming video is hardly a new trend but with the outset of the pandemic, studies show that people are much more likely to engage with companies via live video than any other medium.
Introducing live streaming, especially via influencers and professional storytellers, will continue to help brands in entertaining their customers virtually but also teaching their consumers about the products beyond simple online descriptions or pictures.
Allowing users to see the product they are interested in buying in real-time and generating scarcity with exclusive live discounts leaves aside the impersonality of traditional ecommerce and builds trust.
Diversify your ad spend and reach new audiences
While cutting back on your paid marketing budget can be tempting when your business goes through uncertain times, advertising campaigns are essential for visibility and engagement. Different studies have shown that even during economic recession companies should keep investing in advertising.
According to Gartner’s annual CMO Spend Survey Research, CMOs expect to spend 22% of their marketing budget on paid advertising, including display, video or ads on platforms like Amazon.
But which media platforms should brands choose in 2021? While Facebook remains the first choice (up to 93% of advertisers use Facebook Ads), brands should consider diversifying their reach via other platforms. There are also several reasons why marketers are choosing to reduce their Facebook ad spend: high costs compared to other channels like TikTok or Snapchat, the multiple occasions in which Facebook’s Ads Manager broke or didn’t work properly, and the Facebook blackout in the summer of 2020.
The fact that some CPG giants pulled their spending from Facebook translated into more opportunities for smaller brands to advertise on the platform and in some cases they have even benefited from lower cost-per-clicks (CPCs). That being said, the trend continues to point towards diversification to allow for better flexibility in the allocation of the ad spend budget.
Testing new channels is beneficial to enable brands to connect with would-be customers wherever they might be but it also raises one of the most burning questions any advertiser asks themselves: how to choose the right platform and how much to spend on it? Learning best practices and considering the associated costs of each channel is not a side-hustle. At the end of the day, ecommerce founders need to evaluate the real cost of paid marketing and understand that doing it wrong is doing a disservice to their brand.
The trends that we have shared above are not exhaustive and there certainly are more things in store for ecommerce in 2021. But we hope that getting to know these will help founders develop the right strategy to create long-term consumer value and generate more revenue in the upcoming year.