Top 10 challenges and the future of eCommerce with Enrique Reyero
A few weeks ago, La Salle-URL organized an event led by Enrique Reyero, director of eCommerce & Paid Media at Ogilvy. A session inspired by the challenges that eCommerce will face in this new digital era.
The theme of the event focused on the changes that eCommerce is experiencing today. From a formative framework, La Salle-URL, becomes the first university to include a program completely focused on eCommerce that prepares professionals capable of leading the key aspects of an online business. The Master in eCommerce and Digital Marketing is a program that offers a broad perspective on the strategic direction of e-commerce in a totally practical way.
During the debate, Santiago Sanchez, director of the eBusiness area at La Salle Campus Barcelona also participated as a speaker and offered a perspective on the future of eCommerce and its evolution in the face of technological change.
The forecast for 2022 is that e-commerce in Spain will grow by 17% and reach 65,300 million euros" Enrique Reyero, Head of eCommerce & Paid Media Ogilvy
With the arrival of COVID19, eCommerce had a much higher acceleration in many sectors, and after 2 years, it is returning to the path of a more sustained growth. E-commerce continues to grow annually by more than double digit percentages.
The evolution of e-commerce
The current situation of rising energy costs, inflation, war in Europe, and other issues, make us live uncertain times, which also affects e-commerce.
Until now it seemed that the growth of marketplaces such as Amazon and Alibaba had no end, but in the current scenario they are reporting losses in several quarters. In fact, the Washington Post, Jeff Bezos' newspaper, published an article on November 26 under the title "It's not your imagination: Shopping at Amazon is getting worse every day". Amazon has become an advertising company, the third in the world behind Google and Meta, and many advertisers move their money from Google to Amazon, to be closer to the last click to purchase.
In the case of Spain, Enrique R. highlighted the growth of traffic during the first quarter, which was 25.4% with a turnover of more than 30,000 million euros led by the fashion sector and OTAs (finance and betting). In eighth place we find the retail sector, where approximately 2/3 of purchases are made in online stores outside Spain.
Many key areas of work will undoubtedly be key in the coming months for all e-commerce professionals. Reyero summarized during the talk the 10 main challenges that eCommerce will face in the future:
We must work more and more on recurrence: advertising and recruitment costs are rising, without recurrence there is no future in eCommerce. The average selling price is rising (14% in the USA, and 8% worldwide by 2020), and this is pushing the consumer to the limit. In times of inflation and crisis, loyalty is transferred to value.
Importance of stock in the context of inflation and low activity: many retailers have probably overstocked (due to problems with supply chains and inflation), and if they have to promote and lower prices to sell, cost problems may arise.
Flexibility in payment and financing as a new lever for conversion: for the times in which we find ourselves, it is very important to finance the purchase of many customers who need it.
Improved checkout to complete a purchase in one click: integration of mobile payment methods that already have my data (avoid long forms).
Artificial Intelligence applied to almost everything.
Voice searches, even though shopping has not yet started (tell that to Amazon and the Alexa results).
Shopping experience: much closer to physical shopping. It is very important to work well with high quality images and videos.
Omnichannel: connect both worlds, start and finish the purchase through any of the two channels.
Growth of Re-commerce (rental and sale of second-hand products) and Up-cycling (sale of products made from recycled products).
Marketplaces: they are consolidating as a key element, and marketplaces specialized in specific verticals will grow.
As for retailers, physical stores are recovering ground with respect to eCommerce and must adapt to current customer demand. The post-pandemic has led to an increase in demand for experiences over products. In other words, we are entering a stage in which consumers want more entertainment, events and self-care.
Customers are no longer passive subjects, and they are looking for new experiences" Enrique Reyero, Head of eCommerce & Paid Media Ogilvy
The shopping process has also changed radically, and technology is now a fundamental part of improving the user experience, making its way into the points of sale. For years now, this has led to large retailers having negative net openings, with fewer stores, but larger and more experiential stores.
Many of these retailers are starting to promote online sales even in countries where they do not have physical stores.
Change in digital environments
Digital environments change very rapidly, and it is the brands and retailers who must adapt, test and learn continuously. If our target audience is moving to more digital entertainment environments (online games, streaming platforms, metaverses, etc.), we must go after them.
But how do we bring our brand into the new user environments?
For some years now, the Metaverse has been positioned as the new digital space in which brands have to immerse themselves. This concept will allow users to live a unique digital experience, being able to interact with other users sharing experiences, jobs, shopping... in a physical world, turned virtual.
A few days ago, Springfield, a Tendam Group brand, announced its first digital collection for the metaverse, inaugurating its first store in Roblox and Decentraland. Introducing Metacollection, Springfield now provides its digital users with the option to purchase garments for their avatars in the new digital environment.
Brands must enter and try, we must enter the new reality with the mentality of learning, without great expectations and without large investments, but taking the first steps" Enrique Reyero, Head of eCommerce & Paid Media Ogilvy
Another important aspect highlighted in the session was the importance of data for audience segmentation. Until now, third-party cookies helped us to analyze and identify our target audience and be more precise. But how will data collection work after the discontinuation of third-party cookies?
One of the solutions proposed by Reyero is the use of walled garden. That is, the use of platforms that manage such data and facilitate the closed technological ecosystem without the intervention of external agents. The usual modus operandi is that these platforms operate with first party data that users provide in exchange for using their services or devices.
According to Enrique R., now is the time to use programmatic advertising, which will help us to find new customers before the tap is turned off and increase our database to work on relationship marketing afterwards.
Black Friday in e-commerce
Black Friday, known as the inaugural day of Christmas shopping, has positioned itself in recent years as the strongest day for e-commerce sales anywhere in the world.
The US has seen USD 9,000 million in BF (Black Friday), +2.3%, and USD 11,600 million in CM (Cyber Monday), +8.3% compared to previous years. We could say that this is a flat result between the two campaigns, probably also due to an increasingly longer shopping calendar that leads to promotional fatigue in the Cyber Five in the USA.
In Spain, the result seems to point to a restraint in consumption, with exceptions such as Tradeinn, which reported a 30% increase in sales during Black Week.
The session given by Enrique Reyero showed the changing environment we are facing in terms of e-commerce. The current situation forces us to adapt ourselves to the new changes, and to submerge ourselves in a digital environment that empowers brands completely.
With La Salle-URL's programs in eBusiness you will be able to boost your professional future, delving into current concepts such as the metaverse, artificial intelligence or the shopping experience, thus increasing the sales capabilities of any digital business.
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