In our second annual industry study, we found that companies are setting ever more aggressive online sales targets, but they feel less and less certain about how they will achieve them – citing a lack of clear strategy as their number one challenge in growing eCommerce sales.
According to the survey, 40% of eCommerce leaders said online sales will account for between 2 and 9.9% of their total sales in 2017 (up from 27% of respondents in 2016). Half of respondents said their 2017 eCommerce growth target was more than 25% – up from 38% of respondents who selected this target in 2016.
source: Profitero survey
Yet, 36% of those same respondents cited having a clear and well understood eCommerce strategy as a big challenge – dramatically up from our 2016 survey when it was selected by 29% of respondents.
On top of that, one third of companies admitted to not having measurement in place for eCommerce, with that number spiking to two thirds of respondents among smaller companies (with revenue of $500M or less).
So what does this all mean?
It seems odd that companies would set higher online sales goals, while also saying they lack an eCommerce strategy – at the same time. But it’s telling.
eCommerce is rapidly accelerating its growth rate, with Nielsen recently reporting it now accounts for 90% of all FMCG growth. Many companies that were playing a wait and see approach now find themselves having to mobilize more quickly as competitors take share. Without a strategy, many companies are running a million miles a minute, in many directions. And naturally, they are feeling anxious.
We hear this anxiety over strategy all the time from companies we talk to. It’s often expressed in the simple question: “Where do I get started?”
Keep it simple: focus on the shopper
If you’re like others and overwhelmed by the options ahead of you, just do something simple: focus on the shopper. In other words, prioritize your eCommerce resources and budgets on making the digital shopping experience the most seamless it can be, so you can get more shoppers through your purchase cycle, as fast as possible.
Target those barriers preventing more sales – and chip away at them, one by one.
Focus on availability first: Without products being available to buy, there’s no point optimizing product content and search rankings. You’d be surprised, but when we analyze our clients’ online performance for the first time, we often see hundreds of thousands of lost sales dollars attributed to out of stocks. How well can you see your out of stocks today?
Address traffic: Once you’re in stock, it’s time to get found. Optimizing search placement is one powerful way to quickly jolt your sales. Products that move from page two to page one of search results can boost sales by 2X for highly-searched terms. Can you see all the important terms you’re losing to competitors? You might be shocked to learn you’re not even winning your own brand terms!
Finally, address conversion: Traffic does not equal conversion. Your product content and reviews have to work in tandem to build trust in your product and close the deal. A simple thing like adding more videos to your product page can boost sales 10%, per product.
Optimizing your shopper experience is pointless if you can’t measure success. So before your start optimizing, measure your current online sales and market share to create a baseline read. Then, make a few small changes along these three dimensions to establish your quick wins.
Once you’ve done this, measure against these performance areas to track sales improvement – and keep measuring to find new gaps. When you identify the tactics that deliver the most ROI, scale them across more products, and more retailers.
Removing any friction in your shopper’s ability to find, trust and buy your products will translate into more sales and share. And winning more sales and share should be your number one priority in these early days of the channel. Stress about more complex eCommerce strategies later.
Profitero is now offering companies the ability to use our technology for FREE in order to identify immediate sales opportunities across their Amazon business. If you’re a manufacturer or agency who would like to learn more about our Amazon analytics, email firstname.lastname@example.org.