In a new series, ECA is talking to the heads of ecommerce at agencies and brands to find out what the industry’s leading players think about the future of the ecommerce industry. Next up is Jonathan Melton, Director of E-Commerce & DTC, Performics @ Starcom.
Covid-19 accelerated many trends, what behaviours do you expect to continue post-pandemic?
We’ve all heard the stat from McKinsey that Covid-19 has been responsible for seven years of digital transformation in the space of 12 months, it’s undoubtable that the pandemic has significantly changed the behaviour of both consumers and businesses.
It’s clear that the consumer shift to ecommerce isn’t going away, with global ecommerce sales forecasted to be around 21% of overall retail sales, up from pre-pandemic levels of around 12-13%.
Amazon and the growth of ultra-fast grocery services such as Weezy, Gorrilas and Getir are disrupting expectations around the time it takes for delivery – any brands who aren’t offering at least 24 delivery are going to struggle in a post-pandemic world
How important is personalisation in ecommerce?
In a world where everyone is selling similar products, with similar price-points, utilising similar digital media from the big three tech giants with the same bidding algorithms, personalisation is often the key point of difference to deliver the sale for the brand. At Starcom, we’re seeing our most progressive brands making huge strides in owning and utilising their customer data to deliver end to end personalisation across paid and owned channels.
We see this being of particular importance to brands who’ve grown exponentially through the pandemic – smart utilisation of personalisation to surprise and delight the new customers they’ve brought on should be a fundamental part of their retention strateg
What are the challenges around the increasing amounts of data being generated by brands – and the need to surface it in real-time across multiple touchpoints?
One of the biggest challenges we’re seeing is simply the overwhelming amount of data being created and supporting brands in understanding what’s important and will make a difference to the commercial goals, vs what’s irrelevant or worse, disruptive. It can be tempting to plug every bit of data possible into a paid media campaign for example, but the end result of this can often be audience segmentations that are inconsistent and fragmented.
We’re also seeing a considerable amount of confusion about the data generated for measurement purposes. It can be detrimental to lose sight of the fact that the majority of data generated is actually proxy data, and an understanding of how it links back to commercial value is vital to understand the levers for growth.
How is DTC continuing to disrupt the market?
A huge shift taking place in DTC is the growth of subscription services – we all saw the massive growth of Netflix and Disney+ as everyone was stuck indoors, but subscription services are significantly crossing over into physical products such as razors, flowers and beer. According to the Subscription Economy Index, currently 78% of adults internationally have some sort of subscription service, and it’s clear that in the future more and more of what we buy and the media we consume will be delivered through some sort of subscription model.
The brands who can pivot quickly to this will undoubtedly have an advantage, and a report by the Subscription Trade Association estimates that 75% of DTC brands will offer subscription services by 2023.
How important is sustainability and ESG in a brand’s ecommerce strategy?
Brands are increasingly putting their ethical and sustainable or CSR credentials front and centre in marketing campaigns. This type of messaging is really starting to influence customer decision making, especially for Gen Z.
Brands want to make sure this messaging rings true for every part of their business and that includes media.
Media agencies will definitely need to start considering media partners for these credentials as part of the planning process as well as more of a focus on reaching diverse audiences and overcoming inherent biases.
We’re yet to see this make a tangible difference in our brand’s strategies, but it’s definitely coming and will be one to watch in 2022.
What platform or technology are you most excited about at the moment when it comes to ecommerce?
One of the most exciting areas is the growth of Retail Media, which Publicis Groupe CEO Arthur Sadoun predicts to surpass spend in traditional TV by 2025. And the most exciting tech in this space is CitrusAds, which allows advertisers to tap into retail media placements and buy them in a self-serve way, rather than the more traditional black-box trading which has long been the only way to tap into the retail space. CitrusAds was built for a post-cookie world, integrating directly with retailers on a server-to-server basis, making it a futureproof solution.
Publicis actually purchased CitrusAds this year, with plans to integrate it with Epsilon’s Core ID technology, enabling full integration into a wider audience strategy. Definitely one to watch next year.