The best e-commerce strategies will meet COVID-era direct-to-consumer needs but also serve as a data mine for future consumer behaviors and brick-and-mortar retail trends.
At the height of the COVID-19 pandemic, almost everything went online: school, work, holiday gatherings, and, of course, shopping. Euromonitor says that though the economy has been steadily transitioning to digital solutions over the last five years, the pandemic accelerated this transition substantially, driving companies to significantly up their investments in digital tools and e-commerce. In fact, Euromonitor found that, from now through 2025, 35% of companies globally plan to increase their investments in B2B e-commerce solutions.1
According to Frank Riva, vice president of marketing at analytical intelligence firm 1010data (New York City), the greatest opportunity brands have in e-commerce isn’t necessarily increased sales; instead, it’s the breadth of real-time data and intelligence that, if leveraged properly, can catapult a brand to the next level. The challenge? Brands must prioritize and invest in analyzing the fragmented, siloed, and often challenging amount of data newly at their fingertips.
“With the amount of data that is out there today, brands need to track competitive pricing, monitor trends in-store and online, and understand what sets them apart from others,” says Joe Hesketh, director of client success at Chicago-based ClearCut Analytics, an e-commerce insights and services company. “This gives data-driven brands an advantage on their competitors by having a more thoughtful approach when building out their growth strategy.” Hesketh says e-commerce supplement brands must be able to manage their stock percentages, as maintaining healthy inventory is critical.
At 1010data, Riva says e-commerce data should be leveraged for a more complete understanding of consumer loyalty and retention, which is key to any growth strategy. “A better understanding of post-purchase behaviors is a critical component to any loyalty and retention strategy,” says Riva. “If customers don’t remain loyal, they end up going through the consideration phase each time they look to purchase your brand or a competing one. They are essentially back to square one at the pre-purchase stage.” This means that brands are now tasked with winning these consumers back and taking on costs to re-acquire them, which can be five times or more costly than it is to retain them, says Riva.
The benefits of leveraging e-commerce data aren’t limited to increasing online business. It can also help brands establish a successful omnichannel strategy. “Even as we see many traditional brick-and-mortar retailers scale back on their number of physical locations, we see direct-to-consumer brands doing just the opposite and extending their physical presence,” Riva says. This is a case where a strong online presence can translate to more brick-and-mortar opportunities, says Hesketh, as retailers look at online performance when evaluating products to put on their shelves, including product reviews, price points, and branding.
Once an omnichannel presence is established, online sales trends can continue to inform a traditional retail strategy, says Hesketh, as trends happen in e-commerce about 18 to 24 months before they trickle down to brick-and-mortar. “Being able to identify these trends early on gives brands the best possible chance at growing revenue through new product innovation and launches,” he says.
When dipping their toe into e-commerce, the first place many supplement brands go is Amazon. But it’s not as easy as it seems, says Hesketh. “Brands need to be aware of the intricacies of Amazon and the complexities that come with it,” he says. “Amazon is unlike other marketplaces and is always evolving its selling features—meaning it takes a certain internal skill set or necessitates outsourcing professionals to manage. Someone with little to no Amazon experience should not be managing the Amazon channel for a brand.” Indeed, Amazon opens many doors for supplement brands and ingredient suppliers, but is not without its challenges. One aspect that’s a bit unique to Amazon is, unlike conventional selling channels, Amazon can attract bad actors who can easily purchase product, drive the price down, poorly represent brands, and even put consumers at risk.
One way to invest wisely in an e-commerce platform like Amazon, says Hesketh, is to optimize online listings and focus on products’ benefits and features. In particular, he sees high returns on videos made for Amazon product pages, as well as for brands that invest in Sponsored Brands videos, which allow sellers to capitalize on the power of video content in addition to the more typical image-based ads. His tips? Show the product within the first couple of seconds, keep the video between 15 and 30 seconds, highlight product differentiators, and loop the video to make sure it doesn’t abruptly end.