The key eCommerce and digital trends you should know about
The world is a turbulent place at the moment, and this is having a knock-on effect on digital marketing and eCommerce. To help you navigate the emerging landscape, the digital marketing team at Think have drawn on several industry trend reports and pulled together the most important ones that you need to be aware of right now.
Of course, eCommerce has been growing for several years as we all switch to online-first shopping. But the pandemic saw that growth accelerate as lockdowns led many to prioritise taking their business online. And this trend is set to continue, with Shopify predicting retail eCommerce sales worldwide will rise to 6,388 billion USD by 2024, compared to 4,280 billion USD in 2020 (that’s a predicted 49% revenue growth).
But with growth comes increased competition; it’s getting harder and harder for online retailers to be found by new customers, which makes the cost of new customer acquisition rise. This is very bad news for online-only brands who haven’t invested the time (or money) into building brand recognition and loyalty, with lowering prices becoming their only tool to attract customers. These retailers will find themselves competing in a race to the bottom on price, whilst at the same time paying more to outbid competitors on limited PPC (pay per click) digital advertising spots.
Even for DTC (direct to consumer) companies who succeed in this type of highly tactical advertising – managing to appear at just the right time, with just the right price for people wanting to buy their particular product, the win is short-lived. A sale won on convenience and price point alone inspires little brand loyalty, so it will likely cost even more to win back the same customer next time.
The war in Ukraine, cost of living crisis and after effects of covid amongst other issues are also piling on the pressure for online businesses, as business journalist Alex Kantrowitz puts it:
“A gloomy confluence of rising Facebook ad prices, worsening ad measurement, soaring shipping costs, newly sober public markets and smaller than anticipated customer bases” are all proving significant challenges for eCommerce companies.
Digital advertising is rising in cost
Something many of us digital marketers have intuited in recent months, which Similarweb’s recent research confirms. Research found that CPC for paid search ads rose by 15% in H2 2021, and that 15%-20% of those surveyed reported a drop in Instagram ad reach.
We know that there are simply more online retailers around, all vying for the same amount of ad slots across digital but there’s more at work here. Privacy laws, GDPR and international equivalents are making it increasingly difficult for marketers and ads platforms to access the data they need to reach people.
Apple’s ios14 iPhone is a particular driver of cost increases as the model (and likely near future models too) features tracking transparency. As reported in Forbes, this means that apps must first obtain permission to track data outside of the app. This change represents a huge shift in data collection and generates much less data for digital advertisers to use, driving up prices.
The decline in personalisation
A few years ago, digital marketing was all about micro segmentation and hyper-targeting. Reams of creative were produced, specifically designed to try to fulfil the specific need of each niche audience identified through personal data collection.
This trend is firmly over. First of all, the data to do it is vanishing, with Google phasing out third party cookie collection, and decreased tracking across Apple devices too as we’ve already covered. The data we do have for targeting is proving to be unreliable too, something many of us have suspected for some time. A study recently tested the accuracy of digital profiles that were being sold, and the results were terrible: age was only correct 23% of the time, and gender less than 50%.
So used are we to dealing in personal data, and complex, tactical targeting in digital marketing, that these findings can easily cause dismay. But it shouldn’t when we consider the cultural trend underpinning it – people don’t want hyper personalised ads. At best they’re a little disconcerting, at worst they’re either inaccurate, or rest on harmful stereotypes about what the advertiser assumes our interests are based on age, gender, ethnicity or relationship status.
The solution to all of this? Brand
Brand can often be sorely underappreciated within the digital marketing mix. According to Similarweb, 70% of marketers cutting budgets in 2022 will sacrifice brand marketing budget, but only 13% performance marketing spend.
It’s true that brand marketing doesn’t produce immediately measurable ROI like end-of-funnel ads, but it’s still hugely important, with Google reminding us that 80% of customers conduct their research online before making a purchasing decision, with strong branding key to their decision-making process. Strong brands also do well in recessions, historically, with consumers looking for values and quality when choosing to purchase.
We need to focus less on the hyper-tactical, and more on what makes your brand unique – your values and purpose. In the noise of hyper-tactical digital marketing, we’ve forgotten the power of insight – those universally true, relatable touchpoints that effortlessly connect with people and create iconic and memorable brand advertising. We have lost the art of brand-led, insightful, creative advertising in digital, and given the current trends, we need to re-learn these skills.
If you’d like some help putting creativity and brand back into your digital advertising, get in touch.