Updates

What’s Going on In Ecomm?

Posted on 29-10-20 by Jack Woolsey

At the stroke of midnight on 31st December last year, we no doubt all toasted in the New Year with all the hopes and plans we had for it. This was going to be the most amazing year yet, 2020 it even had a good ring to it! Fast forward 10 months and I don’t think anyone could have predicted just how much of a year of change it would turn out to be, not least for the millions of businesses around the globe providing goods to consumers, who overnight had to fast-track their digital road maps, sometimes by 3-5 years, just to remain in business.

The change in consumer behaviour, which was driven by the pandemic and the resulting lockdown, saw online grocery sales increase 89.5% in August from the same time last year and increases of 58.2% for non-food online sales, according to the ONS Retail Sales report. Categories that experienced high-growth Ecommerce sales included Homewares and Garden, Sports & Activewear, Toys & Games and DIY. With beauty salons and hairdressers also closed, the Beauty sector saw 100% growth in online sales for the 12 weeks preceding 31^st May according to Kantar data.  As staying home became the new normal, sectors such as Travel, Hospitality and Leisure saw a huge downturn in revenues. With many consumers finding themselves with disposable income but without the usual outlets in which to spend it, some turned to luxury items as a way to treat themselves, with Watches of Switzerland who also run Goldsmiths & Mappin & Webb, reporting an almost 50% rise in Q3 online sales and luxury watches as a category continuing to outperform.

Despite more non-essential stores now reopening and shopping restrictions on the high street being eased, 38% of respondents to a recent piece of consumer research conducted by Deloitte, said that they would continue to shop more online, both in the grocery and non-grocery categories.

With such a strong swing towards online shopping and this change at least in some form, looking set to stay, it is no wonder that many consumer businesses are fighting for a slice of the pie and increasing capability within the Ecommerce channel. Whether that be via 3^rd party sites such as Amazon or other sector specific resellers, partnership deals or via their own D2C site, the reality is that if a business’ product isn’t sold online, then competing in the current climate and satisfying consumer needs, is going to be very difficult.

Whilst the recruitment sector has struggled in recent months, the opportunity within the Ecommerce & Digital Marketing space has grown substantially, as businesses battle to sell their products through the only channel in growth and compete to secure the best possible talent to do this for them.

Businesses of all shapes and sizes have come to me for help with hiring this talent during the pandemic, but a noticeable increase has come from requests to partner with SME’s whose Ecommerce capability up until now, has been limited or non-existent. Like the toy distributor who overnight found their sales rapidly decline, with the only sales channel remaining being the online stores of the toyshops through which they traditionally sold. Having already planned to launch their own D2C site, they decided to pull these plans forward somewhat and quickly needed an experienced Ecommerce & Digital Marketing Manager to lead on the project and create as much revenue as possible in a short amount of time.

Businesses and brands that already had a D2C site, have been predominantly investing in ensuring that they have the most effective customer Acquisition and Retention strategies in place and hiring Ecommerce Managers with a focus on trading and optimisation, to ensure the best possible customer experience, which is inevitably is often the difference between retaining a customer or not. We have seen a huge rise in Beauty brands requiring this type of talent, which is no surprise given those previous stats of a 100% increase in online sales within the sector.

Having a D2C offering is sometimes not the most effective way of selling online though, especially not for quick revenue generation and ROI. It is much more of a brand building exercise that takes time. Another hugely popular and quicker route to market has been Amazon, who reported double digital revenue growth YoY for Q2, with over $5bn in profit. Several of the very well-established brands that I work with, as well as some of those newer to market, chose to invest in Amazon Managers during the pandemic, to help them to navigate the tricky minefield that it can be and really capitalise on the increase in shoppers using the platform.

Likewise, with such a hike in online grocery sales, Food and Drink brands have been rapidly increasing their ability to sell via partner sites and the .com platform of the grocery accounts with which they work, with an increase in demand for NAM’s to work in the Online channel.

An example of one such business is KP Snacks, Andy Riddle Sales Director commented “To capitalise on this shift it’s key that suppliers engage with this different way of shopping, understanding the path to purchase and how best to support their customers to satisfy that shop, delivered via an integrated channel strategy and plan. At KP Snacks we had an active online agenda pre lockdown and since March have accelerated our intentionality and focus, including hiring in further expertise, resulting in our online sales doubling year on year, to support the snacks category growth of 88%, and with more to do.”

Regardless of how a business chooses to sell online, the one major advantage to this channel and the biggest lever that can be utilised to create quick wins is data. Having competent Data Analysts who can interrogate online data and get underneath the skin of the customer is often the difference between being highly successful withing the Ecommerce channel or not. With a lot of teams previously outsourcing this role or using a generalist Insights team to support the function, many of my clients are realising the benefits of investing in a specialist Ecommerce Data Analyst with experience of tools such as Google Analytics and Hotjar.

Fran Wilkes, Senior Ecommerce Analyst at Superdry sums it perfectly. “The main benefit of eCommerce data over offline data is that it’s real-time and therefore can allow you to be much more responsive to what your customers do and don’t want. With the vast amount of data available, from Google, OMS, affiliates, partner sites, in-site search, etc. it’s crucial to develop data & analytics teams who can manage all the different sources and transform it into actionable insights that help to drive your eCommerce growth.” 

The change in consumer behaviour so far this year and the resulting change in talent needs for Consumer businesses has been very interesting to be so close to. The pace at which organisations have responded to this change has often been the difference between their commercial performance vs their competitors.

The rise in Ecommerce is here to stay, the pandemic has only fast forwarded how consumer purchasing would likely have progressed in the next 5 years. The fact that it is here and now just means that the thinking and mindset of business leaders must also fast forward.

If you are in a Consumer Products business that has not invested in Ecommerce in the last few months, then ask yourself why not? The stats speak for themselves and with almost 40% of consumers likely to retain their online shopping habits, that’s a big piece of the pie to be missing out on.

If you are a Marketing or Commercial professional without Ecommerce experience, then upskilling yourself is probably worth looking in to. There are hundreds of reputable courses on digital marketing, selling on Amazon and data and analytics that you can do for free, but now really is the time to be adding those skills to your CV. Speak to your current employer about what opportunities are available within your business to get involved in these areas too.

The Ecommerce landscape has completely transformed this year, and I for one am super excited to see what the next 12 months bring.