Brands & E-retailers: The only way is partnership
The current e-commerce status quo that minimises brand engagement and prioritises sales is potentially damaging for both brands and e-retailers for a number of reasons. Not only are brands likely to start seeing major e-retailers as an unfortunate necessity, and less as key partners helping inform their retail strategy, but they will also limit their audience to bargain hunters always looking for the lowest price, which only caters to opportunism.
Traditional brand wisdom dictates that it is vital to create a rich brand experience at point of sale to have a real and lasting impact on the shopper.
However,in the competitive e-commerce arena, retailers largely use price as the main point of difference to win sales, neglecting the opportunity to convey any other attributes that make brands and their products attractive.
There are even start-ups emerging, such as Brandless in the US, who are challenging the traditional thinking behind big brand names and the hidden costs that tend to come with buying from them.
40% of the cost of a product is ‘BrandTax’ and has nothing to do with increased quality
Brandless estimates that 40% of the cost of a product is what they call ‘BrandTax’ and has nothing to do with increased quality. As such it has set up a model which removes the brand name, and the associated cost, to offer consumers a cheaper alternative without compromising on the quality.
For brands who rely on a retailer to get their product to market, this brings to light an interesting challenge. They are bound by the retailer’s e-commerce strategy and their perceived need to sell on price, therefore brands are unable to offer customers the engaging experiences they would ideally put in place if they were selling directly to consumers.
The value of partnership
However, the current e-commerce status quo that minimises brand engagement and prioritises sales is potentially damaging for both brands and e-retailers for a number of reasons.
Brands are likely to start seeing major e-retailers as an unfortunate necessity, and less as key partners to inform their retail strategy. For e-retailers, it means they are focusing on an audience of bargain hunters always looking for the lowest price (opportunist shoppers), ruling out those whose are decidedly more considered, and potentially more loyal.
There is clearly a massive opportunity for e-retailers and brands to form partnerships that can be mutually beneficial to both sides. The path to purchase has changed for consumers. It’s now complex and non-linear.
the mental processes shoppers use to make decisions remain the same
The way a person interacts with marketing messages on a daily basis is as diverse as it is unpredictable. Although technology and consumer behaviour has evolved, the mental processes shoppers use to make decisions remain the same.
To understand consumer behaviour, brands and e-retailers need to focus on heuristics – the hardwired shortcuts people use to make purchase decisions, regardless of brand, category or channel. There are 128 recognised heuristics, and working with Durham University Business School, we have identified the nine most relevant to purchase decisions.
These ‘Sales Triggers’ (as we call them) allow us to make behavioural science useable for brands and e-retailers.
We leverage them to deliver Brand Commerce marketing that delivers more effective sales. It’s a refreshing approach that enables brands and e-retailers to work together to break the e-commerce price rut:
Look beyond price as a key differentiator
While price will always be a significant factor in customers’ purchasing decisions, it is not the only thing that influences people’s choices when purchasing. Emotional ideas are key to trigger sales online more effectively.
For example, surfacing the ‘Better than Average’ Sales Trigger prompts consumers to trade up. ‘Instant Gratification’ drives impulse sales and increases rate of sale. By delivering the right Sales Trigger at the right moment, interactions can be turned into transactions.
Test and learn, and test again
When shopping, a person’s purchase decision is dependent on four factors; whether they’re thinking independently, being influenced socially, thinking fast and shopping instinctively or thinking slow and deliberating over what they buy. These factors vary by brand, category and situation. As does the devices they’re using and the time of day.
Through stronger collaboration between brands and e-retailers, different combinations of Sales Triggers can be tested to identify the most effective mix for driving online sales. By working together to drive sales, it benefits both sides in equal measure.
The future growth of e-commerce is dependent on true partnerships between retailers and brands and it can begin with recognising that consumers purchase using emotions that can be triggered beyond pure price promotion.
- » Are retailers losing control of the customer journey to pervasive social platforms?
- » Adobe could be gearing up for a multi-billion dollar bid for Marketo
- » How luxury retailers are delivering personalisation at scale
- » Just how realistic a goal is augmented reality marketing?
- » Five approaches for integrating promotions with live chat