The Online Conundrum
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When we set out to conduct our latest research, a deep dive into current trends in digital selling, our aim was simple: we wanted to identify what it takes to be a successful E-commerce retailer amidst the chaos of late 2021/early 2022. Headlines once relegated to trade publications now make front page news in the consumer media. Everyone now knows about the ongoing effects of COVID-19 as it continues to wreak havoc in domestic and global supply chains and retail stores, and retailers know how E-commerce operations have been challenged to fill in the gaps for customers.
As with everything E-commerce-related in the current climate, Amazon.com’s incessant march towards global domination colors many of the decisions retailers must make, and therefore a research piece looking into – and identifying – how the best performers are able to build competitive advantage and customer loyalty seemed a very timely document, indeed.
Right off the bat, retailers told us the challenge today’s market is that unlike a few short years ago, customers aren’t starting their journeys with retailers anymore – and retailers believe that it will be hard to change that anytime soon. When we asked retailers to tell us where their shoppers begin their shopping journeys, the responses were disheartening (Figure 1).
Figure 1: Over-Optimistic?
Source: RSR Research, January 2022
Even more dispiriting – their responses also understate the problem. In another recent study we conducted – this one a consumer survey (July 2021) – we asked over 1,000 US-based shoppers where they begin their online search for a desired product. In that research, RSR’s Annual Evaluation Of Retailers’ Website Performance: Lost Revenue Opportunities Continue, 50% of respondents said they start on Google, 26% say they start on Amazon – and only 24% start on a retailer’s website.
As a result, the question that our newest report looks to answer is, what does E-commerce success actually look like to retailers in 2022? What do they see as the clearest path to profitability, and what are the things they believe will have the most impact on the bottom line?
With that in mind, we asked retailers to identify their priorities for the upcoming year (Figure 2).
Figure 2: Eyes On The Prize – And The Prize Is Eyes
Source: RSR Research, January 2022
For retailers, the name of the game is customer acquisition. How do they plan to encourage customers to avoid searches on Amazon, Google, and other competitors, and start their journeys on the retailer’s homepage? And in the “attention economy” – when luring shoppers away from YouTube and Netflix is something even Amazon struggles with – how reasonable is that goal?
Beyond those “very important” priorities, many other things should be crucial to retailers (only 2% say decreasing their rate of cart abandonment will not be a priority this year, for example). Indeed, E-commerce teams have a lot on their plate, and finding easier and more straightforward ways of prioritizing all they are being asked to do has increasingly become a challenge. E-commerce teams are having to go into overdrive mode.
Hence when we look at the data in Figure 2, combining “very important” and “important” responses highlights that issues like online traffic conversion, the ability to drive higher price goods, and customer retention prove to be essential. However, retailers couldn’t be any clearer: customer acquisition supersedes all else. More than 8 out of 10 retailers say it will be their focus in the coming year. This is important to keep in mind while reading through the pages of the full report, which we invite everyone to download by following this link.
The report is free to all.