Is the future of selling off-site?
At Tamebay Live in May, Richard McGuinness, CRO, eDesk talked about ‘How to build brand equity without owning the customer relationship’. You can watch this masterclass at your leisure here. Today Richard is back with Tamebay to discuss the future and ask the question as to whether that will involve selling off-site.
It’s easy to own the relationship with the customer when transacting on your own website, but how do you maintain brand equity when selling off-site and what strategies should you employ? Richard dissects the customer relationship with your brand and suggests ways to retain your brand equity no matter where the customer makes their purchase:
Is the future of selling off-site?
The surge in ecommerce sales over the last 14 months has been astounding, with global online retail sales growing by 27.6% in 2020 to reach $4.28trillion according to eMarketer. In the UK alone online consumer spending increased by 34.7% to $14.33bn in 2019, and according to UNCTAD shopping has indeed changed forever.
Selling off-site on marketplaces
Marketplaces in particular grew massively, growing 81% yoyo, fuelled by an increase of 46% in online sellers carried by spoke in marketplace purchases of 106%. This isn’t just limited to resellers, but big brands such as Levi’s, Calvin Klein and Swarovski have all established their own brand stores on Amazon to expand the routes to consumer.
However, increasingly brands are pushing forward with a more direct-to-consumer model, with Adidas in particularly keen, announcing recently their ‘Own the Game’ strategy, which has the objective of reaching 50% of all sales to be D2C by 2025. The reason is down to brand equity; being able to own the end-to-end customer experience to deepen customer relationships and create brand advocacy through loyalty programs.
Whilst this strategy is sound for the massive corporate brands who have the budget to create that brand awareness (and ultimately value therefore brand equity), not everyone has the deeper enterprise pockets. Whilst marketplaces are one sound solution, there is a trend of social and media companies moving into the ecommerce space to take advantage of the strong grow opportunities (to varying degrees of success), welcoming in the era of social commerce.
Lessons from China
So, what does look like, and how much attention does it warrant? Before going into it too deeply, it’s wise to look into first into who is getting this right, namely companies in the East. This is no more prevalent than in China, where eMarketer predicts that online sales will dominate the retail market, hitting 52% by the end of this year.
How has China got this right? According to ecommerce expert Vinny O’Brien, one of the biggest factors is the fact China is mobile first with over 90% of online traffic going through mobile. This has given rise to apps like the infamous ‘WeChat’, which started as a messaging app but is now an ‘everything app’, described as PayPal, Instagram and Facebook rolled into one. People in China use the app to shop, pay, communicate, follow, collaborate; they can now even use it to file for divorce!
WeChat attracts over approximately 1,225 billion users every month with 87% of consumers in China using WeChat Pay for their online payments, and retailers have squarely adopted it as a sales channel much in the same way retailers adopted Amazon in the west. They have been taking steps to help the pandemic retail recovery, announcing their ‘WeChat Retail Growth Plan’ which includes activities such as opening up WeChat Live livestreaming communications platform. This allows businesses to interact with customers, focused on generating sales whilst people were watching the livestream whilst communicating (and buying) at the same time.
Selling off-site in the West
In North America and Europe, social commerce is still in its infancy, but is certainly growing. Facebook launched Facebook Shops in 2020, and whilst smaller businesses wanting to set up stores on Facebook and Instagram have embraced it, brands are currently using it as a showroom rather than a sales platform. Google Shopping give retailers the ability to surface the opportunity to buy straight from their searches and recently signed a deal with Shopify to build the merchant base, joining other platforms such as TikTok which is now available in 15 countries.
Balancing ease with control
This raises a key question for retailers; is it best to conduct sales where consumers already are through social commerce, or is it better to use social media, messaging apps or search to drive people to D2C channels thereby maintaining complete control of the experience?
It comes down to the basic fundamental of whether they can provide an excellent customer experience despite being outside of their direct-to-consumer environment.
At the moment buying through social commerce is in its infancy in the west, therefore most brands will use social as a means to push over to the site to build a deeper customer relationship, allowing them to build to trust, brand and to re-market and develop personalised offers.
Trust and reviews
But the most fundamental reflection of customer satisfaction and indeed your reputation is built on trust and reviews, which is why it’s imperative that no matter what the sales channel, customer service is always front and centre of the experience.
eDesk directly integrates with a number of social channels including Facebook, Instagram and Twitter, and at the moment the platform is seeing the majority of engagements coming in at a pre-sales engagement such as sizing, colours and stock levels. The expectation with social is for people to respond quickly therefore no matter whether the channel is direct or via social, and these queries should be responded to in a manner that is timely and consistent to ensure a brand reputation is built positively.
Post purchase actions
Another factor to consider is post purchase; driving purchase through social leaves businesses more open to public reviews or queries through that channel. Therefore, it’s again it’s imperative to respond quickly and consistently to build a good view of the brand in the mind of the customer.
Whilst off-site sales and social commerce brings a great opportunity for retailers, the customer experience needs to be managed regardless of the platform to build trust and protect reputation. Ensuring the right backstops are placed, such as having an integration tech stack to ensure the experience is managed correctly, is imperative to success. It’s only when these are managed in a way that gives brands more control over the customer will social commerce really come into its own.