Ecommerce Excellence in 2018: Chip Away at Your Bucket List

Greg Zakowicz, Senior Commerce Marketing Analyst, Bronto Software

If you're trying to figure out what you need to do to stay ahead in 2018, think about it in buckets. You should have a "What do I need to fix right now?" bucket and a "What do I need to start researching for the future?" bucket. And if you're an omnichannel merchant, you can add a third bucket that focuses on that ever-popular topic of how to chip away at the silos between in-store and online activities.

Bucket 1: Resolve to Fix Your Existing Campaigns

Let's tackle your existing program first. You've been reading for years about personalizing your email campaigns, sending triggered messages and segmenting customers to gain a lift in online revenue. And from an experiment I ran last year, I can tell retailers are trying. But, as anyone who has ever received a head-scratching email can attest to, there are lots of failures.

Last year, I signed up for the email programs of five well-known brands, using the same five to seven email addresses. I wanted to not only assess their effectiveness, but how each company used the information I provided (at sign-up, via the preference center, my click, browse and purchase behavior) to better target me.

For each email address, I used different behavior - never opening a message on one account, clicking regularly on another, clicking and buying for others. I also used the accounts to manage my preferences, abandon my shopping cart and make purchases.

I was looking for some indication that the brand differentiates itself from competitors, influences me to make a purchase, is timely and relevant and incorporated my purchase behavior into its decisions on what to send me.

The results of my test were disheartening.

I only received targeted messages in a few cases. And each time a brand asked for my gender at sign-up, they failed to use it. Post-purchase messaging was lacking for all of the brands. Mobile-friendly messages? Only two of the five brands could do that. No brands included product recommendations or emails based on browse behavior or web browsing. Some had an automated welcome series that misfired, sending me welcome messages over and over. Others dropped me from their list when I updated my preferences (I didn't unsubscribe), despite my behavior when I got their emails (I clicked on them).

One company signed me up for emails for all its children's related brands – but not for the email address I used that clicked on the maternity options. These were well-known, established brands that weren't successfully segmenting, personalizing or sending triggered emails. For those of you who fall into this category, your New Year's resolution should be to fix what you're doing. A starting point: Set up several email accounts, and test the possible customer pathways.

Bucket 2: Evolve the Omnichannel Experience

I've been paying a lot of attention recently to how retailers are working to bring customers to their brick-and-mortar stores. I am already seeing more stores, including Toys"R"Us, Barnes & Noble and Nordstrom, offer in-store events. Buy online and pick up in-store (BOPIS) is gaining in popularity, so streamlining this experience will be critical for retailers that want to encourage consumers to get off the couch and go to the store. This will help create a connection between brand and consumer, and increase the bottom line. After all, those who go into a store to pick up an order are likely to make additional purchases while there.

Sportsman's Warehouse knows this and uses its email program to help push customers to its stores. "Email has helped us drive our ship-to-store program,'' says Colby Saenz, ecommerce marketing manager for the 87-store chain. "And getting customers to the store is important because we know they buy more when they get there.''" Fifty-six percent of our online orders are ship-to-store, a 25% increase over last year,'' Saenz says. "The importance of the ship-to-store feature is that it brings customers to the store where they can add to their purchases.''

Saenz not only segments against preferred interests, but can also incorporate sales data by zip code to build emails that better appeal to people geographically. That is particularly important for seasonal emails, as hunting and fishing seasons vary across the country. Open rates on geo-segmented emails are 66% higher than promotional emails and encourage store associates to collect emails.

Bucket 3: Pay Attention to Browserless Commerce

Not long ago, my wife asked me a question, and my five-year-old son said, "Why don't you just ask Siri?" At that moment, something occurred to me: This is his normal. Voice assistants are poised to be the next big thing.

It begs the question: What does this mean for online retailers and brands that are accustomed to consumers navigating browsers rather than barking voice commands? There are a couple of things that come to mind. If your brand or site benefits from offering the best reviewed products (or the lowest cost ones), browserless shopping won't directly impact you yet. Shoppers who are looking at more than expediency are not going to trust a voice assistant to find, and order, the best reviewed toaster oven under $50 that doesn't clash with the new quartz countertop.

Online retailers and brands that are heavily dependent on retargeting and online advertising might need to start thinking about new data streams to help target their prospects. If browserless shopping and voice search become an everyday occurrence, could offline marketing come back into play? Are there ways to rent or purchase data from companies that have browserless systems to pair with existing customer relationship databases? The data needed by retailers to narrowly target customers will be owned by whatever company is collecting it through their device. Retailers could purchase or rent targeted data from these companies for direct mail or other types of advertising techniques. Theoretically, they would even be able to fine-tune the types of customers they are targeting (e.g. location, lifestyle and real-time browse history).

I'll grant you that companies selling anything that needs a visual reference – clothing, jewelry, shoes and cosmetics – will be less impacted right away. But years ago, we didn't think that people would be browsing and buying from their smartphone, so don't discount the future possibility of browserless shopping connecting to visuals. A spoken command could open a synced TV (through a device like a Fire Stick) or the Echo Show. This would allow consumers to visually browse products initiated by speech. Your voice could control the navigation, allowing you to choose the brand name product you want.

Even if this browserless future seems kind of out there, it's important to think about this channel and how your brand or company can make it work. Shopping via voice may seem unnatural for most for us, but it won't be for children growing up today. I look back on pay phones as an example. Now, if I see one, I am startled at the sight. Ten years from now, my children may look back at smartphones in the same light.

Trend Watch: Exploit the Growing Interest in Mobile Phone Shopping

64% of US shoppers surveyed last year said they've purchased items from theri mobile phones, including 92% of millennials.

Yet, only 44% of US ecommerce execs believe enhancing the mobile experience has high potential to improve sales or profits.

Machine Learning: The Next Wave of Email Marketing Innovation

Vivek Sharma, CEO, Movable Ink

Commerce marketers are crashing up against some high hurdles - sales fatigue and Amazon to name a few. How do you get customers to buy from you? Movable Ink CEO Vivek Sharma says he believes using machine learning to personalize the brand experience will increasingly be the answer in the coming year.

Products need to appeal at a more visceral level - especially to millennials who are less interested in buying more stuff and more interested in how a product relates to their lifestyle. "The smart retailers are going to start creating an experience around the product," Sharma says. But that begs the questions: Whose lifestyle? And what experience? Should the leather jacket be shown as a component of a chic outfit or on the shoulders of a motorcyclist? Sharma says the beauty of machine learning is that it can study individual customer behavior and select the image and content that would likely appeal to them.

"Computers are finally starting to understand what our images are about. You're talking about something very visual and trying to infer metadata from unstructured content (the image) and trying to understand what it is about,'' Sharma says.

"I think that's the first big step that's going to happen in 2018 - this will help you get more performance out of the creative in your email marketing campaigns.'' He provided another example related to travel. There are specific images associated with island getaways - palm trees, sunsets, white sand beaches and the ocean. But no two people select a resort for the same reasons. Young honeymooners might be more swayed by romantic sunsets, while athletic beachgoers want to see people on paddleboards.

If you have data on the individual you're sending an email to - what they've booked, what they've browsed on, what images they've lingered on - machine learning can automate the image (or multiple images) that goes with the email.

"There are thousands of such experiences that no marketer can keep up with. We think there's a big opportunity for machines to help generate those completely unique experiences,'' Sharma says. That said, it's important to note that this isn't about replacing human creativity outright. The promise of machine learning is in the ability for machines to scale human creativity in ways physically impossible for any human. It's about automating the repetitive tasks to free marketers up for strategic planning and come up with even more creative ideas.

The reason this kind of marketing is so critical is because it gives the marketer power. Sharma says you need to think about how Apple controls the context of what it sells. "There is a reason you can't buy iPhone on Amazon. Apple cares deeply about experience and putting that product in the context of how you might use it." Offering products curated with machine-driven personalization is something that a company like Amazon (or Jet) can't do for millions of products, Sharma says.

What's the Effect on Your Email Strategy?

"The intriguing aspect of visual personalization is that it doesn't require the message to be constantly changed out. You could conceivably breathe a bit of life into what is, technically, a batch-and-blast email – just one that will automatically render differently depending on the recipient,'' Sharma says.

Applying machine learning in this way speaks to the idea that marketers need to shift to behavior-based approaches. Many email tactics already employ these approaches (something as simple as segmenting messages by gender). Right now, Sharma estimates that only 3% to 5% of emails are based on behavior. "I imagine a world in five years where 80% is behavior-based. Emails are being sent based upon machines making decisions and adapting the content.''

"The No. 1 lesson from the promise of machine learning to introduce deeper and more meaningful personalization is that seven or eight years ago, people thought that's it, all the big email innovations had happened. The sending and segmentation of the email are certainly important and foundational. But it's interesting to see all the innovation that's still happening in email as a platform."

Trend Watch: Make it Easier to Buy From a Mobile Phone

Emails and websites designed to be viewed on a full-size screen (desk or laptop) don't render well on mobile devices unless retailers specifically employ mobile optimization. Multi-step checkout processes can also be harder to navigate on a small mobile device.

So, it's no wonder that 95% of the US ecommerce execs we surveyed last year said mobile is either critical or important to the future of the brand.

Yet, 51% of them say they treat desktop and mobile the same.

Be True to Yourself, But Get Out of Your Own Way

Dylan Whitman, Founder and CEO, BVAccel

Dylan Whitman is unapologetically brash in discussing the behavior that is killing some retailers. It isn't online retailers that are the threat, so much as sluggish, slow-moving executives at legacy companies that haven't figured out the moat's been drained. He posted a note on LinkedIn near the end of 2017 about the futility of having 14 retail executives in a meeting to discuss a minor brand tweak.

He believes they aren't getting it.

"There has been a rapid breakdown in the barriers to entry that had made it expensive and difficult to bring a new product or brand to market,'' says Whitman, the founder and CEO of BVAccel, a San Diego-based system integrator and marketing company. Technology is making it easier to source the product, ship the product and pay the bills. And it's taking at least some of the manual work out of marketing – from automating the email sends to choosing the advertising venues. He points to the near overnight success of a client he worked with: Kylie Cosmetics.

According to an article in Fortune Magazine, the brand did $420 million in sales in its first 18 months. "Nothing like that has ever happened before, and the reason is because even five years ago, they would have needed to find distribution channels and technology people and investors to pay for it. And this year, they just set up an online store and turned it on."When companies are freed of the time and expense of logistic hassles, they can zero in on what matters. "Brands and retailers can focus on the value they bring,'' says Whitman.

So, what to expect in 2018? More barrier busting, more moat draining and more technology adoption. "Technology will eventually solve every (company) need that doesn't add value,'' says Whitman, who incidentally studied philosophy, not coding, in college.

That grounding in the liberal arts likely influences his other thought on trends in 2018 – the need for companies to determine their fundamental truths and stick to them. "You follow those truths as your North Star, and you can be successful.'' All the technology in the world isn't going to save your brand if there isn't something at its core that delivers value.

"You deliver truths with every interaction with your customers. You build a relationship of trust with that customer so they'll pick your brand based on that relationship over others,'' Whitman says.

What does it all mean for ecommerce marketers looking to get ahead (or stay ahead) in 2018?

Don't buy into the idea that email is old school. People want to innovate beyond it, but it's still one of the biggest channels. It's just table stakes to have a good email program.

Make it personal. "I believe email needs to become more conversational and more multichannel. It shouldn't be in a silo. It's going to be more about where customers are in the lifecycle of buying from your product.''

Look for automation opportunities. "Triggered emails have been around for a while, but you should see more adoption of this, particularly based on site activity like carting or browsing. Getting these to be more automated is key.''

Longer term, the onus will be on technology companies to provide products and services that make it easier for marketers to do their jobs.

"Today, marketers find the best of breed, purchase the technology and they get really excited. But the problem is, the practical applications take a lot of work. It's often more work than they have time for and more work than they have appetite for, so the tools are underutilized. The point at which the technology gets better at operating itself, you'll see a real holistic application of all these technologies."

Trend Watch: Consider New Payment Options

We asked US retailers, "When you think about innovation in ecommerce, where would you focus if money or time were not an issue?"

Forty-four percent chose new payment options, such as one-click checkout, that streamline the shopping experience.

Technology Is the Key That Drives Personalization

Saima Alibhai, Managing Principal Consultant, EMEA, Bronto Software

When you press a button on your phone and instantly summon a car to take you where you're going, how does that impact your view of shopping? Turns out quite a lot.

It's not just the convenience of mobile per se that is changing customer behavior. Disruptive technologies, such as AI, and services such as Uber and Deliveroo are also having a huge impact on consumer expectations and how they interact with brands through technology. Features built into cutting edge ride share and delivery companies, like knowing where you are, tend to make customers feel like every brand, retailer or service should know what they want before they know it themselves.

By now, you're thinking that the trend for 2018 is technology. And you would be partly right. Technology, like artificial intelligence and machine learning, will be very important. The ability to make buying seamless, through buy buttons embedded right in the emails, is critical.

But the trend for 2018 is how you use technology to connect with your customer, anticipate their needs and supply them. It's not about promoting what you want to promote.

The aim of personalization has always been to promote loyalty and trust, but building closer relationships is going to be an even more important trend for 2018. A previous report by Bronto suggests around 60% of retailers have programs in place for marketing communication and strategy - but that 40% don't.

It's important to be relevant. Focus on messaging that appeals to customers rather than what you want to say. Give them what they want. It's about using all the data you have on them to make something appeal to them more without crossing what can be perceived as boundaries.

Our EU General Manager Brandon Wilkins says it well: "One of the things retailers are also doing very well is showing off their personality. They're becoming more than just a site and a store that's constantly in sell, sell, sell mode. It could be things they are doing in the community or their quirky side on social media. They are getting people to buy into the personality of the brand, and that has a direct impact on the loyalty of the brand.''

And if it's all About You, Prepare for a Breakup

Research shows customers will switch allegiance from brands if they get a more personalized experience elsewhere. "When you have that level of competition in the market, it's really important to provide as thoughtful an experience with you as possible. The best way to do that is to pay attention to the data you're getting - both implicit and explicit," Wilkins says.

But how do you do this? My colleague Andrew Fernandez, a Bronto principal consultant, has a great way of looking at it. He says it will come down to building loyalty and relationships with people. Forget about terms like B2C and think, instead, about H2H (human to human). "Otherwise, the difference will be price and service, two things bigger retailers tend to excel at. Part of this is ensuring that every message isn't necessarily 'a buy this, buy that' message but might be a brand message, such as a thank you message, a birthday message or even a competition," he says.

But you can't personalize until you know something about the customer - that they like red, not blue, that their birthday is in May, that they always head somewhere sunny in February or that they gobble up trendy fashions. And you won't know that without gathering the right data and mining your existing purchasing data.

Research shows customers will switch allegiance from brands if they get a more personalized experience elsewhere.

Break Free From the Mold or Be Crushed by it

Zak Stambor, Editor, Internet Retailer

As the editor of Internet Retailer, Zak Stambor keeps close tabs on the trends around ecommerce technologies, platforms and innovations. We talked to him about artificial intelligence's potential impact on the retailing world, the death of batch-and-blast emails and how to compete against Amazon.

AI's potential to transform the way retailers operate is nearly endless. "For most retailers, AI and machine learning seem most likely to transform the way retailers approach their digital marketing efforts. A number of vendors have popped up over the last few years that offer retailers AI-powered platforms that can efficiently run a large number of tests, crunch data and quickly learn and adjust based on those results at a pace that would be nearly impossible for a human to achieve. Given that the cost of these platforms is manageable for most retailers, it seems likely this technology will continue to gain steam."

Those batch-and-blast emails aren't doing you any good. "With dozens, if not hundreds, of emails streaming into consumers' inboxes, retailers need to segment or personalize the emails they send. Looking at my inbox, I see an email from the spa that I go to once every other year when I get a massage after I run the Chicago Marathon. The subject line is '50% off waxing services.' Nothing in my customer profile suggests I'd be interested in such a service. So, why send me that? With email volumes continuing to rise, it's getting increasingly difficult to stand out. That requires making clear to consumers that you know who they are, or at least what they're interested in.''

Marketplaces are critical for smaller players. "Consumers are spending more time in the largest retail apps – Amazon, Amazon Shopping, Wish, Etsy, Zulily – and even large traditional retail companies' apps, such as Walmart, Target, Kohl's, Home Depot and Kroger. But for retailers that aren't those large players, it's very hard to get consumers to download the app, and even if they do, to get them to use it. Given that a number of the largest, most widely used retail apps are operated by companies that operate online marketplaces, and online marketplaces' market share continues to grow, there's an argument for some merchants to sell on those marketplaces."

But there are ways to compete against Amazon (especially if you are an omnichannel merchant). "Retailers that don't want Amazon to take their market share need to be different. They need to find ways to distinguish themselves. Take DSW, which is experimenting with services such as shoe rentals, shoe repair and shoe storage for members of their loyalty program. Whether those tests will work isn't clear. But at least DSW is looking for ways to make clear that it isn't Amazon since it often can't compete on price or selection. Retailers can leverage their stores like DSW does with its robust ship-from-store and buy online, pick up in store programs, or like Walmart, which offers a discount when a consumer picks up his online order in a store."

Trend Watch: Wealthy Shoppers Use Phones In-Store to Hunt Deals

Forty-five percent of shoppers that make more than $100,000 look for discounts and promotions. Forty-two percent price compare.

Consumers in the $25,000 to $49,000 income level look for discounts and promotions 34% of the time and price compare 29% of the time.

UGC: Passing Fad or Competitive Advantage?

John Swords, Chief Product Officer, TurnTo

User-generated content (UGC) is what John Swords immerses himself in daily, so his take on 2018 trends is focused on that. What's on tap for next year? Authenticity, interactive email and more community development within a brand's platform.

"UGC outranks all other forms of marketing, including search engines, when it comes to shopper influence,'' says Swords, who lists computer-mediated communications as a lifelong obsession that threads through his career. He once started a company designed to let viewers create topical content and socialize online during live television broadcasts.

Today, he's chief product officer with TurnTo, a company that offers customer content solutions to top merchants and brands through its suite, including Ratings & Reviews and Community Q&A.

Incorporating content from customers is instrumental to building customer loyalty. It can involve encouraging customers to share photos with other shoppers when they're wearing your product or helping customers of your gourmet cooking brand talk with each other about how to use a product.

"User-generated content helps build trust and offers a more authentic shopping experience,'' he says. And it can provide a competitive advantage against the behemoth online stores with their free, fast shipping. TurnTo's own research from earlier in the year showed that 81% of consumers are willing to pay more or wait longer to receive products that have user-generated content associated with them.

Here's what Swords says commerce marketers should be on the lookout for in 2018.

Keep it authentic. Make sure product reviews display information about the reviewer, such as when they purchased the product, and relevant profile statistics, such as expertise and preferences. This helps other shoppers better understand the perspective of the reviewer, and it helps the shopper identify others with similar tastes or needs. Also, don't publish anonymous reviews. "Consumers see right through that,'' he says.

Deepen the engagement. Platforms that allow customers to talk with each other, answer questions and engage are not new, but there is growing evidence of ROI – not just in attracting new customers but in creating loyalty among those who participate in the community. People who receive answers to questions convert at a higher rate than those who don't. Sending customers emails with info from fellow shoppers "is very contextual and personal," Swords says.

Make it easy. Advancements in email client apps are bringing browser-like capability to the inbox. Interactive email makes it possible for shoppers to rate and submit UGC directly in their inbox, without opening a web browser. This substantially increases response rates and improves the user experience.

Get creative. Any type of product that turns over rapidly can be at a disadvantage when it comes to ratings and review coverage. Most reviews come in response to a post-purchase email after the shopper has received the product. So for fast-turn commerce and flash commerce sites, this results in review submissions long after the product is discontinued. The solution? A onequestion survey, such as "Why did you choose this?" asked at order confirmation, captures the enthusiasm and research and purchase motivation behind the items just bought. The comments make for powerful social proof that can be displayed on trending product pinboards and grid pages, and featured on the product detail pages to other shoppers.

"UGC can shift the model to consumer to consumer, build trust and offer a more authentic experience,'' says Swords. "A strong community built around a successful UGC program can help shoppers bypass the instinct to go for the lowest price or the fastest delivery.''

When you are competing against ecommerce behemoths, that's something to pay attention to.

Trend Watch: Households With Children Use Their Mobile Phones In-Store a Lot

More than twice as many respondents with children (45%) use a loyalty app in-store vs. those without children (19%), and 44% explore product reviews – much higher than the 27% of respondents with no children in the home.

Q&A: AI, Amazon and Advocacy

Peter Sheldon, Vice President of Strategy, Magento Commerce

We talked with Peter Sheldon, vice president of strategy at Magento Commerce, about what 2018 might bring. Sheldon, a former vice president and principal analyst with Forrester Research, has written about the instant gratification economy. He leads corporate strategy and business development at Magento.

Q: Realistically, what kinds of artificial intelligence or machine learning will be used by commerce merchants in 2018?

A: You'll see it spread around many areas of ecommerce, adding incremental gains. I don't think, right now, it's customer-facing. You might see it in conversational, or browserless commerce, but I think we're kidding ourselves if we think there's going to be some drastic change in the way consumers buy through digital channels because of AI.

Where I'm excited about AI is in taking the load off the merchandiser. If we think about the back office of ecommerce, merchandisers are overworked and companies struggle to find experienced merchandisers. What I see AI doing is working during the off hours.

Then, when the merchandiser comes in the morning, they review a dashboard with suggestions for what they can do today - suggested offers, price changes, email campaigns, changes in where the product is placed on the web, areas of demand that can't be met by the current offerings. They gain both insights and recommendations. This is the kind of thing that would free up merchandisers to work on strategic initiatives. It will make them faster and more effective, and they'll grow revenue. And you'll need fewer merchandisers since a portion of their work will be fully optimized.

Q: How should merchants approach the behemoth that is Amazon?

A:This is going to be a tough pill to swallow, but you've got to embrace Amazon because they have gotten so big and are innovating at such a fast pace. The days of saying, 'Amazon's a threat, so I'm not going to list on their marketplace,' I think it's a dangerous game. My advice: If you haven't embraced their marketplace, now is the time. It's where the eyeballs are.

They've long overtaken Google as the leader for where product searches start. If you aren't listing on their marketplace, you're missing 50% of the eyeballs right there. If you're a brand owner, you absolutely must be there. Your products are already listed there, regardless. And you need to part of the Prime program and have your products inside an Amazon Fulfillment Center. Amazon is going to play a much more important role in supporting the merchants going forward. It's a necessary evil. You've got a better chance of survival playing inside Amazon's ecosystem than trying to fight it.

Q: How can retailers and brands create loyalty?

A: I think it's sort of back to basics in terms of customer loyalty. Lots of companies don't have any type of effective loyalty program. They don't have retention programs or post-purchase programs. When creating or revamping these programs, it's not enough to offer incentives. You need to create unique and valuable content. The firms that are obsessed with unique content, how-to guides and videos are going to succeed.

I think retail around babies, for instance, is a fascinating space. Lots of online merchants sell strollers, so you need to create content around the stroller - how to collapse, store and travel with it. That's what creates loyalty.

And I think loyalty is different depending on the brand. I buy a Dyson vacuum cleaner once every eight years. The whole concept of loyalty seems irrelevant in that timeframe. But as the company expands into other types of products, I'm happy to receive emails from them that tell me my filter needs to be replaced, gives me a link to buy it online, tells me about other products and lets me know where I can see them at some of the flagship stores that are popping up. Is it loyalty? Maybe. Or maybe it's brand obsession, but it is effective.

Trend Watch: UK Mobile Use Is Just as Pronounced

Eighty-two percent of the UK millennial generation have already bought via their phone. Additionally, 67% of Gen Xers surveyed have done so, while just 27% of baby boomers have.

The UK research shows a gender divide: 53% of men in the UK have purchased using a mobile phone vs. 61% of women.

Make the Most of 2018

Whether you're a newish online brand or an established retailer trying to figure out your next play, listening to the voices in our trends report porvides an excellent baseline for exploring ideas for next year. You might try something as simple as segmenting your email campaigns or as forward-looking as researching a browserless commerce partner. You could look for an option to amp up your email and social media campaigns, rejigger your mobile approach or just audit what you're doing right (and not-so-right) today. What doesn't work: The same old thing you did last year.