The key source of income of all leading internet companies is advertising revenue. Can you imagine – we have now reached a stage where internet companies are having their cake and eating it too. See how brands are charged exorbitantly for advertising, and now customers are being coaxed to pay subscription fees to avoid seeing the very same ads.
Perhaps the most sought-after professionals in today’s job market are those who are able to figure out how algorithms are used by the internet majors and find innovative ways to make their clients’ brands stand out in the massive clutter. Not too long ago we used to complain about the clutter in print media, and now print media is struggling for ad revenues.
In the late nineties, if one can recollect correctly, banner advertisements slowly started showing up online. Marketing Gurus and ad honchos would flaunt the fact that the click-through rate was anywhere above 40 percent. Now, based on current statistics and data availability, in a little over two decades, the click-through rate has come down to a paltry “less than one percent”.
Let’s face reality – there has been a truly dramatic reduction in the ability of digital advertising to influence human behavior. Interestingly, even after a consumer has clicked on a product tile, what’s placed in an online shopping cart may not get bought. Studies have shown that the average cart abandonment rate for even essential items like groceries is over 50%.
Out of every 300-400 people who enter an online digital store, all the marketing experts manage to influence the behavior of one to two people. That is a massively low and very expensive hit rate.
It is important to realize that e-commerce is an ‘in-between’ activity in contrast with brick-and-mortar shopping. During those short in-between moments of browsing on a device, the shopper is not in a mood to absorb too much information. Therefore, communication needs to be more visually impactful and extremely precise in nature. Perhaps the most notable recent trend in the world of e-commerce is the unprecedented use of mobile devices. The smartphone is always with every individual, they interact with it very frequently, but these interactions are of very short duration, simply because they tend to browse in all spare moments. Therefore, to improve the conversion rate of e-commerce through handsets, savvy marketers need to develop a much deeper understanding of an individual’s relationship with this gadget.
The real e-commerce challenge is no more about initiating browsing behavior, nor is it about managing search behavior. This phase of online is now a given, and spending too much of marketing dollars in this area will not yield better results.
With the steady rise of ecommerce, the most critical component of the customer’s journey is the checkout process. Understanding the psychology behind it could help businesses improve their conversion rates and reduce cart abandonment. Going by the high rates of cart abandonment, one realizes that on-line’s actual challenge begins where the shopper adds a product to her or his cart.
While millions of dollars are spent on the brand’s website, frequent and periodic changes being made to the website, and a lot of thinking going into developing TV commercials, print ads and other promotions for the brand, very little importance is given to the design of the product title and product display pages. Even the elementary lessons of proper communication seem to be forgotten while designing them.
The truth is that no one has really figured out the last-mile appeal of the e-commerce business. In today’s world, customers are extremely fickle and have limited bandwidth of attention. Businesses should design processes that are simple, stream-lined and intuitive.
Shoppers only buy from brands they trust and feel secure buying from. Customers must be reassured that their information is secure. Features such as security badges and transparent privacy policies can help build trust. Customer reviews and testimonials can also help build trust by demonstrating social recognition. The world is quite aware of fake reviews and testimonials which need to be avoided.
A better understanding of user behavior patterns can help businesses design an intuitive, efficient checkout process that supports customer needs.
Guest checkout has become an extremely popular feature for the past few years. Allowing customers to checkout as a guest without creating an account reduces friction, speeds up the process and may actually facilitate their becoming future registered customers.
In today’s environment, businesses have more opportunities than ever to trade outside of their domestic country or state — something they are increasingly taking advantage of with cross-border ecommerce. This is a topic which will be discussed in the next issue.
To add to this is the growing online b2b business which also needs strategic digital marketing to do a rapid scale-up. Since speed is of importance, it is essential to work on strategies which seek good business progress over pure technology perfection.
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