This year, in store-traffic for Black Friday was down 28.3% from 2019, signaling that in-store holiday shopping may never return to pre-pandemic levels. Meanwhile, ecommerce sales gained 11% during the 2021 holidays, according to MasterCard’s Spending Pulse.
It’s the natural evolution of the digital shopping experience, which was accelerated by the pandemic and the attendant rapid shift in consumer shopping behavior.
Until now, ecommerce has been slowly gnawing away at retail sales. Many brands have had internal conflicts within themselves, including creating separate internal teams to manage each aspect of the business, effectively pitting teams against each other.
The solution is simple: Ecommerce, once the enemy of retail, should be leveraged and treated as the frenemy. There will always be healthy competition for share of wallet. However, the real winners will be those who leverage ecommerce and all the rich data it throws off to better serve customers.
A Bit of History
In the late 1980s, QVC revolutionized retail with the first true “social shopping” experience. The company quickly learned that the thrill of the hunt could be captured virtually, and the experience could be replicated without anyone leaving their home.
Retailers soon adapted as did brands and designers by taking existing marketing practices and building upon them. For example, designers began designing “exclusively” for QVC while brands emphasized the concept of limited inventory to create urgency, introducing new product lines on television prior to making them available in stores.
Next came Amazon, which usurped numerous well-established retailers, followed by social media, and now social shopping, which enables consumers to discover products and access insight from others before purchasing them. And just as things began to take off, the pandemic hit, followed shortly by new privacy laws.
But store, ecommerce and social shopping can coexist and benefit each other, if brands and retailers pivot strategies, leverage relevant data and listen to what consumers want. The biggest mistake many brands make is not truly leveraging the data available to them. There is a treasure trove of opportunity in social shopping data to mine.
If more brands adopted true social shopping, they could own real-time feedback vs. just reading reviews from the past. They could also leverage organic traffic in a world where retargeting is getting tougher and gain new customers is becoming virtually impossible, and increase AOV and profit.
The same is not true in the inverse. If you are a pure-play ecommerce company, the chances of transitioning to a multichannel is very difficult. From a practical perspective, your business model and profits have a completely different cost structure that likely can’t afford the slow build of a retail business.
Stick to what you know, but be aware that you won’t be successful unless you adopt a true social shopping experience. I’m not referring to social shops on Facebook, Instagram, WhatsApp, etc., but rather shopping digitally with friends and family in real time.
One thing that has remained consistent and more important is the need for human interaction. Consequently, it is an innate characteristic to seek the approval of others prior to a purchase. In a survey conducted by Joyned, 20% of women shopping for fashion items said they call or text a friend prior to purchase, and 27% of men will check with a friend or family member before making an electronic purchase.
Indeed, the social aspect of shopping is simply an important part of our human behavior, but we’re all spoiled by online convenience. Can the online/offline worlds be combined, or rather can they be leveraged to help one another? The answer is a resounding yes.
Where To Go From Here
Put the consumer experience first. The right experience shows you’re listening to their needs. Brands that dig into data and “listen” to what the numbers and behaviors are saying will win. And if you have both an online and offline store, you must provide an equally welcoming experience on both.
Ecommerce companies must adopt a true social shopping experience. The ability to have people shop with you in real time with friends will provide a seamless shopping experience they will remember. Data from Joyned shows that invitees that join a shopping chat with friends have a higher average order than random site visitors, tend to be 40% more profitable, and exhibit much higher degree of brand loyalty.
Brick-and-mortar retailers should avoid competing with ecommerce, and instead focus on complimenting them.
To win, marketers need to go back to the basics and focus on the experience. This may require pivoting current strategies a bit, but being nimble is key. Fighting the shipping wars and producing beautiful sites are tactics, not strategies. If marketers embrace the two worlds and place a premium on the omnichannel shopping experience, consumers will take notice and profitable customer loyalty will be built.
Jonathan Abraham is CEO of Joyned