E-commerce Communities Alter Companies’ Go-to-Market Strategies
Giant digital shopping destinations like eBay, Amazon, and Alibaba now account for more than half of the nearly $500 billion spent by North American consumers online, and to keep up, marketers are rethinking their go-to-market strategies to better integrate digital advertising with personalized shopper engagement and more effective conversion programs.
Those findings, highlighted in a recent CMO Council report, show that large, global e-commerce communities are disrupting the retail marketplace by bringing together vast numbers of buyers and sellers in frictionless transactional environments.
The research found that more than half of all retailers believe that large e-commerce communities are revolutionizing and reinventing the global retail marketplace, and 60 percent report a need to embrace a more cohesive, integrated, multichannel digital retail strategy to improve their businesses.
Liz Miller, senior vice president of the CMO Council, defines these e-commerce communities as “commerce destinations that have built a community of shoppers who are predisposed to explore and engage.” They differ from other retail sites in that the destination is not just built to showcase and sell products but rather to “invite exploration and discovery through enriched and expanded content,” she says.
For consumers, the appeal of these e-commerce communities lies “in the exploration and the ability to discover new products and uncover value,” while at the same time “being given guideposts for the exact experience the consumer defines,” according to Miller.
Businesses also find them appealing, she points out. For online retailers like eBay or Amazon, the appeal is “a predisposed commerce audience that, thanks to the data they deposit across the site, clearly indicates behaviors and journeys, giving businesses a clear path to exploration, discovery and purchase.” For the companies selling products on these platforms, the appeal is “a consumer base that is both predisposed to buy and shop but also to explore, potentially outside of their original search path.”
And while many of these online communities began as peer-to-peer platforms for selling used items, “they have evolved to be the world’s largest mall that has everything,” Miller states. “In reality, brands know their items could already be for sale on these sites. The question is about the opportunity to leverage a shopper’s desire to buy the brand and giving them opportunities to explore other things they could want to buy, in this case directly from the brand itself. Yes, you bought the gently used leaf blower, but what else do you need to make sure your garden is July 4 ready? An edger? New clippers? Tips on getting flowers to grow? Words of wisdom from other green thumbs out there? This isn’t just about buying something used or new. It is about exploring beyond the item you had in mind.”
The CMO Council’s research found that these e-commerce channels have reshaped the go-to-market planning and strategies of major product marketers in the following ways:
• put pressure on them to lower pricing;
• caused them to rethink monetization and customer revenue models;
• forced them to seek greater brand differentiation;
• has them recalibrating and reallocating digital marketing spend; and
• caused them to shift toward an agile, real-time marketing mode.
“The Millennial-driven shift to digital retail shopping is prompting the evolution of the old 4P model of marketing—now, more notably, we need precision, personalization, persuasion, and perfection of execution to multiply purchases,” notes Donovan Neale-May, executive director of the CMO Council. “Exemplifying this are innovations in customer attraction, convenience, conversion, and consistency of experience that are behind the successes of eBay, Amazon, and other digital commerce communities.”
The CMO Council report also notes that marketers today are challenged to show how they are using data and real-time insights to “gain greater satisfaction from every customer interaction” and determine whether they can “scale the way they track the digital buying trail.”
Marketers, Miller concludes, need to “think about the content and the experience, not just about the product listing.” And retailers and manufacturers need to “look at these communities as a treasure trove of data,” she adds.