3 E-Commerce Priorities for Global Leaders in 2021
The current rollout of vaccines gives hope that the light at the end of the COVID-19 tunnel is possibly near; however, this won’t slow the explosive growth in e-commerce that 2020’s lockdowns dramatically accelerated.
eMarketer projects that U.S. e-commerce sales will reach $843.15 billion — 15 percent of total retail sales in 2021 — up from $794.5 billion and 14.4 percent of total retail sales in 2020. Not only are shoppers continuing to migrate online, but retailers and brands are modifying their behavior accordingly, readjusting their strategies and investment priorities to meet the demands of the “new normal.”
Which issues will be top of mind as retailers navigate the year ahead? A recent survey of e-commerce executives at leading global brands conducted by Namogoo and Astound Commerce offers some illuminating insights.
1. Securing Customer Lifetime Value
Although conversion rate optimization has long topped e-commerce managers’ key performance indicators, the pandemic brought a reshuffling of priorities that will continue with the evolving normal. Boosting conversions now ranks as managers’ second-highest priority, with customer lifetime value reigning supreme, as 58 percent say it is the key to building and sustaining a successful e-commerce brand. Meanwhile, customer acquisition costs and new traffic acquisition rank third and fourth, respectively.
What explains this shift? Customers with higher lifetime value bring in more revenue. As companies have been forced to prioritize measures with proven return on investment to survive a tough economic climate, ensuring these customers return to their sites again and again has been critical for retailers to stay in the game. To that end, brands are increasingly turning their focus toward optimizing the online customer experience to build long-term loyalty and brand relationships.
2. Capturing First-Time Shoppers
While most companies expect first-time shoppers to account for at least a quarter of their visitors in 2021, a staggering 97 percent identify these shoppers as a challenge. The majority (51 percent) according to those surveyed are mobile shoppers, and many of these mobile shoppers (nearly 40 percent) are less brand loyal.
To convert these customers and keep existing ones coming back, retailers must incorporate solutions designed to provide seamless online journeys, including easy account creation and relevant personalization. Additionally, companies should eliminate distractions that damage revenue and irk shoppers, like third-party ad injections that divert consumers to competitors’ sites. This is especially crucial for first-time shoppers, as 51 percent of senior e-commerce managers say that these customers are more easily distracted.
3. Achieving Faster ROI for New Technologies
With more consumers shopping online than ever before, retailers are rethinking their innovation strategies, de-emphasizing flashy but unproven features, and placing a premium on technologies with a demonstrated benefit for the bottom line. Indeed, nearly three-quarters of e-commerce managers (74 percent) say they’re seeking tech with a “fast ROI.” Accordingly, 49 percent are recalibrating their tech investments in the new year.
Which solutions offer the biggest bang for retailers’ bucks? While competing brands differentiate themselves with different approaches, technologies that allow retailers to monitor and analyze customer behavior will be especially valuable, fostering customer loyalty and the ability to engage shoppers with timely, relevant offers.
What do these priorities mean for 2021? Regardless of the challenges this year brings, companies that invest strategically in creating customer relationships that yield high lifetime value, eliminate pain points along the customer journey, and implement solutions with clear value propositions will find themselves in prime position to succeed.
Chemi Katz is the CEO and co-founder of Namogoo, a customer journey hijacking prevention platform that wins back stolen online revenue by blocking unauthorized ads that are diverting your customers.
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Chemi Katz is co-founder and CEO of Namogoo, a SaaS company that helps businesses prevent online journey hijacking.
With over 17 years of experience in the security, commerce and advertising spaces, Chemi is a serial entrepreneur with a track record of leading some of the tech industry’s most innovative companies. Prior to co-founding Namogoo, Chemi was General Manager of DoubleVerify Israel and co-founded Seapai and Reissod. Earlier in his career, Chemi led Production Operations at LivePerson (NASDAQ: LPSN), was Global Business Technology Manager for Aladdin and managed IT Outsourcing for Bynet.