The eCommerce landscape has been facing its share of challenges, especially in the years 2022 and 2023. It’s time for strategic innovation in eCommerce, aimed at overcoming flat growth and paving the way for a more robust future.
While no one cares to admit it when you are in the heart of the storm, it’s fair to say 2022 and 2023 has been a challenging one for eCommerce. Growth has been flat. The swing back to retail has been there for all to see and eCommerce has suffered.
The famous growth curve of ecommerce relative to retail has finally made it back to where things would have been had there not been a pandemic to fuel ecommerce growth. While on a macro level, we are back on trend, this masks a complicated situation for ecommerce. This year, eCommerce has declined on average 4% relative to retail (year on year). If you compare the last 2 years, it has been 20% decline.
This article explores strategic innovation in eCommerce, detailing how businesses can pivot for growth even in flat markets.
It’s now time to reset. Negative growth is now stabilising, and we can start to turn our attentions toward that lovely thing – positive growth. Firstly, let’s work through where we have been.
Understanding the Artificial Boom and Bust Cycle in eCommerce
The surge in eCommerce growth, largely propelled by COVID-19 lockdowns and restrictions, was an adaptive response. Consumers worldwide pivoted to online shopping as brick-and-mortar stores became inaccessible. With supply chains disrupted due to pandemic-related restrictions, production halts, and transportation challenges, product scarcities became a norm. These, in tandem with an unpredictable demand flux, led to a potent cocktail of rapid growth followed by a precipitous decline.
Historically, many businesses might have been able to foresee market fluctuations based on past trends, economic indicators, and consumer behaviour. Still, the pandemic’s magnitude and its resultant consequences were beyond traditional forecasting models. Hence, the almost universal misjudgement.
It’s the first real decline in eCommerce for decades.
What to Do Now: Strategic Adaptation for eCommerce Growth
In this novel context, the emphasis needs to be on strategic innovation. Here’s a structured framework to approach growth in a seemingly stagnant market:
1. Foundational Stability: Before pursuing new growth avenues, ensure your primary operations—those bread-and-butter strategies that have historically worked—are consistently profitable. This stable base is crucial for any further innovative endeavours.
2. Informed Innovation: Recognizing that previous strategies may now offer diminishing returns, pivot towards data-informed innovations. This means:
3. Identify Critical Metrics: Rather than casting a wide net, focus on specific, actionable metrics that can significantly influence growth.
4. R&D Integration: Incorporate research and development as a continuous facet of operations, ensuring you’re at the forefront of addressing emerging customer needs.
5. Engage & Understand: Foster a closer relationship with your customers. Use tools like surveys, feedback loops, and data analytics to understand their evolving preferences.
6. Media Channel Adaptation: With media channels recalibrating to maintain their growth trajectories, businesses must adapt their advertising strategies. This involves diversifying advertising platforms, refining targeting criteria, and optimizing budgets for higher ROI (return on investment).
7. Innovative Focus Shift: While there’s a discernible shift away from broad branding innovations, the lower funnel awaits exploration. The emphasis should be on strategies that can directly influence conversions and final purchase decisions.
1-2-1 Live Video Shopping: A Pioneering Strategy in eCommerce
In this ever-evolving scenario, strategic innovation in eCommerce can’t be overlooked. Take, for instance, the rising prominence of 1-2-1 live video shopping. This innovation perfectly encapsulates the strategy of focusing on the bottom of the funnel. Here’s why it’s crucial:
1. Personalized Experience: By offering real-time, face-to-face interactions, businesses can cater to individual customer needs, instantly addressing queries and offering tailored product recommendations in a way that gives true personalization and is scalable.
2. Reducing Cart Abandonment: Many customers abandon their carts during the final phases of the purchasing journey due to doubts or second thoughts. A live video interface can offer immediate reassurances, guiding them to a confident purchase.
3. Scalable Engagement: Once the live video shopping model is refined and proves successful, businesses can prominently integrate and promote this feature, ensuring customers are well-aware and eager to utilize this unique shopping experience.
The Imperative of innovation for growth
In the quest for sustainable growth, especially in a plateaued economy, innovation is the lifeline. Historically, sectors that thrived, even in adversity, were those that dared to deviate from the norm, seeking novel solutions to emergent challenges. Sticking to tried-and-true methods in changing times might ensure stability, but it rarely propels a business forward. Instead, it’s those willing to take calculated risks, to invest in ideation and creative problem-solving, who uncover untapped growth avenues. As we move forward, strategic innovation in eCommerce will undoubtedly be the cornerstone for future growth strategies.
Furthermore, innovation signals to stakeholders—be it consumers, investors, or partners—a company’s commitment to evolution and relevance. In an age where consumer loyalty is as volatile as market trends, offering fresh, differentiated experiences is key. Not only does this meet evolving consumer expectations, but it serves to set a business apart from competitors. By doing things differently, by being unafraid to challenge the status quo, businesses don’t just find new growth avenues—they often create them.
As we analyse the current state of the eCommerce landscape, the intertwining threads of resilience, adaptability, and innovation emerge as paramount. By grounding strategies in data, emphasizing continuous innovation, and tapping into the vast potential at the funnel’s lower end, businesses can traverse the flat economy’s challenges. But more than just navigating, they can set the course for robust future growth, showcasing that in the face of adversity, the right strategies not only survive but thrive.