Our goal at Shippo is to reduce and simplify the unnecessary complexity of e-commerce so that your business can thrive.
But even with all the right technology at your disposal, navigating the ever-changing and often complex industry can be a headache in, and of, itself. How do you stay on top of the latest news and trends? Can you really tell how something external may impact your business?
We won’t lie, it’s a challenge, even for the most observant of us. Enter The Delivery Roundup, our no-BS, straightforward collection, and analysis of the latest happenings in the world of e-commerce.
Are we open yet? Are we still open? Do we need to close again?
Several states are moving back to “normal.” Businesses reopening, restaurants and bars serving patrons, folks exploring local parks, downtowns, and beaches.
So what does going back to normal mean for your e-commerce business? Short answer: your physical-retail cousins may soon be taking a larger slice of the pie that you’ve been enjoying an oversized piece of for the last several months.
But how much, or how little your business will be affected depends on how you’ve handled customer interactions during COVID-19. If you focused on building lasting relationships with new “COVID customers” their business may be yours well into the future. If you just sat by and fulfilled more orders as the influx started to come in, you may see yourself back to pre-COVID levels overnight. We recently covered some of these details on this along with several specific strategies that you can adopt to retain new customers.
And are we really, actually, finally reopening? Maybe, with several early opening states seeing record highs in new cases, the current status of “open” may again be short-lived. And even if specific lockdown rules lift, will consumers be as willing to shop in person now as compared to pre-COVID? And what about businesses, will they rush to reopen or heed caution? Apple, for example, has already re-closed several recently reopened retail stores in the face of spikes in infections, though, many small businesses may not have the same luxury of waiting even longer.
Platforms, platforms, platforms. Plus, one that you may never have heard of before, but should keep an eye on.
You’ve probably been reading a lot about the new Shopify x Walmart deal. We wrote a detailed analysis a couple of weeks ago. Spoiler alert—we think that leveling the playing field for independent merchants is key to the future of e-commerce, which is why we think, if used properly, Shopify will walk away as the biggest winner in this win-win scenario.
Meanwhile, Amazon is up and running at near pre-COVID levels in terms of product availability and shipping speed. Though, it may be coming at a high cost as health risks among warehouse workers continue to rise. Amazon recently announced a $500 million one-time bonus for front-line workers to thank them, or to quell health concerns. Most front-line workers will see bonuses of $250-500, while certain managers could walk away with over $1K. It’s worth noting that this comes on the heels of Amazon axing a $2 per hour hazard pay bump for the same frontline workers.
You also may have noticed more items available for “overnight” delivery. Yes, overnight, not next-day. As in, your order may come in the middle of the night. Will this become more common or is it a reach beyond most consumers’ comfort-levels? Only time will tell, though South Korean competitor, Coupang, already delivers 99% of products on the same day, with an increasing prominence of “over by midnight, get it by 7 am” deliveries.
Delivering 3.3+ million orders per day and with over 50% of the population using its services, Coupang has established itself as the largest retailer in South Korea. Drawing parallels to Amazon’s investments in the United States, Coupang leverages its own first-party logistics and delivery service and has built up a network of fulfillment centers, which put them within 10 minutes reach of 70% of the population.
While mimicking such a significant investment in logistics is unrealistic for 99.9+% of businesses, there’s a takeaway that we can all apply. The businesses that go the furthest to meet customer needs and drive satisfaction are those most poised to succeed.
Social media + Shopping = Social Shopping
I would call it “social selling,” but that’s what the salespeople that spam your LinkedIn account would say.
Facebook, Instagram, YouTube, and Snap have all recently increased their e-commerce investments. With people browsing social media platforms with record-high frequencies amid COVID-19, can you say you’re surprised?
Building off of its already established P2P program, last month Facebook announced ” Facebook Shops,” a free tool that merchants can use to upload a catalog of products that can be sold through their Facebook page. While free to use, you’ll need a strong Facebook presence to reach shoppers, since promoting your store will depend on your brand’s reach on the platform or your ability to buy ad-space.
Coincidentally, this push comes at a time where brands are reassessing their presence and ad-budgets on the social platform amid continued criticism of Facebook’s handling of hate speech and misinformation. So far, over 100 brands have paused their spend on the platform, including Lululemon, Patagonia, Levi’s, and Coca-Cola.
The push for more e-commerce support continues to Instagram, where merchants can use their same “Shops” account on Facebook’s photo-forward platform. Instagram Shopping is rolling out to more merchants following its launch in March. The tool will allow sellers to make items available for purchase on the platform and be linked to, from posts. Shoppers can make purchases without ever leaving the platform. Though, it’s worth noting that Instagram is enforcing an approval process with guidelines for quality and authenticity. Merchants need to apply for approval before they can start selling.
Meanwhile, YouTube rolled out a new direct response ad format for e-commerce. You may have already seen it. The new format will allow advertisers to include a panel of product links beneath the video player while their video ads are playing. To take advantage of the new format, you’ll need to sync your Google Merchant Center account with your video ads. Doing so will allow you to display a list of products under your ads as opposed to a single CTA. Early tester, Mos, reported a 30% increase in conversions with reduced costs. If you’re already running video ads or are actively considering it, it could be worth testing for your brand.
Not to be left out, Snap, began expanding its new e-commerce advertising product, Dynamic Ads, this month. The hook being that Snap can take care of dynamically formatting ads for brands to fit their vertical format as opposed to brands needing to spend time manually reformatting their existing ads. However, an even bigger hook for DTC brands will likely be the more affordable costs compared to Instagram, where the DTC market continues to saturate.
May the best
ads products win!
And, even if you’re not able to spend big right now, there’s still good news! Google announced this week that they will start featuring more “free product listings” in its “product knowledge panel.” You know, the scrollable results that show at the top of a product search. Up until now, these placements were exclusive to sponsored listings.
Google announced this shift after seeing significantly higher click-through rates for non-paid listings in its “shopping search tab.”
It’s a key time to develop community and lifestyle elements of your brand.
Selling a product and doing it well is the traditional path to success for retail merchants. And while, it’s still a tried and true formula that will, no doubt, set you up for success, today’s top brands are going beyond simple commerce. Ironically, at a time where we are, at least physically, more distant than ever, the importance of building community is paramount.
Most recently we’ve seen this philosophy take center stage with Lululemon’s recent purchase of at-home fitness hardware and steaming start-up, Mirror, for $500 million. Sure, there are opportunities for Lululemon to cross-sell to Mirror’s user-base of fitness class streamers, but arguably that is just a small piece of the overall value proposition. Mirror gives Lululemon a stronger connection with the daily lifestyles of its customers.
Lululemon CEO, Calvin McDonald said as much recently. “This isn’t just about getting guests to buy apparel. This is about strengthening our community and our loyalty and our relationship with our guests and memberships.”
Admittedly, 99+% of DTC brands don’t have $500 million in extra cash laying around to buy the next successful at-home fitness startup, but that doesn’t mean that they can’t expand their brands beyond transactional relationships with customers. Newsletters, content programs, recipe books, digital events, these are just some of the ways that you can (of course depending on your brand and products) build a community around your brand and stronger relationships with your customers.
That’s all for this round. Be on the lookout for The Delivery Roundup Volume 2 in the near future and be sure to share any tips and feedback!