The new e-commerce: Delivering digital experiences, the human way

Max Lillard, Marketing Associate — Executive Teams

Retail CMOs had to stay tough in 2020

In 2020, the shift to digital e-commerce hit the retail industry like a wrecking ball, changing the way CMOs approached strategy. Digital sales surged as global shoppers were forced to rethink how and where they shop, and many brands were quick to weather the storm by implementing new commerce models with a digital-first mentality. Experts agree we have witnessed what would have been decades of accelerated e-commerce adoption and growth in the past 18 months alone. As we’ve seen from many retail brands, like DoorDash, the landscape is changing — from social distancing to contactless food pickup, direct to consumer (D2C) movie premiers, online grocery shopping, delivery, and more.

CMOs have had to make shrewd decisions to stay resilient. As the buzzword and trend of digital transformation was thrown about, they had to recognize that a revolution in the digital age was underway. This recognition was underscored by marketers’ increasing emphasis on “micro-moments'' as opposed to their old-hat reliance on campaign marketing. These moments, like when audiences scroll through their social feeds and encounter ads, are instances where brands have nanoseconds to convey a clear, concise message that is relevant and of interest to consumers.

But, as markets respond to vaccines with hopefulness, brands and retailers will have to reevaluate their digital strategies all over again. What will keep customers coming back once the pandemic winds down? When customers have a choice again, will they still choose to shop digitally? Will there be a revitalized demand for something digital retail can’t replace — personalized, authentic experiences delivered by real people and highlighted by the irreplaceable human experience?

Revitalized demand

CMOs are spending more and more budget on social media advertising and digital strategies to meet these shifting consumer expectations — and they’re seeing big returns on this investment. But while this all accelerated out of necessity in 2020, consumers and brands alike have embraced this shift as it offers frictionless experiences, endless convenience, and higher profit margins.

However, CMOs are in a bind. As Gartner reports, 2021 has seen marketing budgets fall from 11% to an average of ~6.4% across many industries — the lowest since Gartner began surveying CMOs in 2012. Pair this with the obligatory increase in spending on digital channels (social media marketing, SEO, digital ads, etc.) and CMOs have no choice but to cut investments in other areas. For example, digital commerce made up 72.2% of investments while spending on offline ads and events decreased. Further, 24% of the budget traditionally allocated to TV is expected to shift from broadcast and cable to streaming in 2021. With offline ads and events making up only 9.9% and 8.4% of spending, respectively, the future of marketing budgets will see these mediums increasingly bleed into digital formats.

72% of investments
24% of the budget

While CMOs see the upside of a more digital experience, their limited budget forces them to be increasingly strategic about spending. Have consumers really abandoned — for good — the desire for human interaction while spending their money?

The short answer is “No. People buy in different ways.” The long answer? CMOs need to take a hard look at their strategy and adapt. The digital shift may not be as stark as foretold, but recognizing how marketing strategy has evolved throughout history can help guide the hand of executives.

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Historical parallels reveal strategic priorities for CMOs

Campaign marketing has been around for a while, and though its form has evolved in recent years, it’s helpful for CMOs to look to the past as they focus on the future to realize how micro-moment marketing has become a much-needed strategic priority. Reporting by the Wall Street journal can attest to this — 69% of consumers agree that the quality, timing, or relevance of a company's message influences their perception of a brand.

A quick look at history reveals some interesting parallels for marketing executives. After WWII, the rapidly-expanding middle-class was bombarded with flashy product placement and TV ads promoting American products. These structured campaigns emphazed patriotic expression through the power of purchase, marketing a sense of status and security to Americans. Fast forward to the 2000s. Social media soon eclipsed traditional forms of advertising. Through the power of data, brands were about to target demographic islands through data-driven strategy.

Conversely, consumers also gained power. Their increased access to information boosted their expectations for what a “good” brand experience entailed. Experts argue that we’ve entered a new era of consumerism, often dubbed “The New Normal.” The era is defined by the ability of consumers to identify, evaluate and purchase everything — from cars to homes to food to toilet paper — all without ever interacting with another human being. Social media is the new shopping cart, bots the new retail associate, and kiosks the new waiter. With this shift, micro-moment marketing has gained power, dealing a crippling blow to the power campaign marketing once held.

Social media is the new shopping cart

Respect and reflect on the moment

CMOs need to recognize that campaign marketing is stodgy and quickly losing ground to micro-moment marketing. Even the most eye-catching and enticing digital marketing campaigns can fail if delivered at the wrong time. Marketing at the right moment has become increasingly important. By being laser-focused on emotional engagement through the human connection, brands can show their customers that they understand their immediate desires and needs.

For now, short-term solutions and instant returns yield better results than long-term investments. This isn’t to say you shouldn't devote energy here, but marketing executives need to focus on prioritizing strategic agility, creating respect for social movements, and reflecting on the public’s mood in relation to their brand.

Activism from consumers is on the rise and as a result, ethical marketing is even more important than ever. In 2020, Gillette vowed to donate $3 million to non-profits over the next three years to help combat toxic masculinity in light of the #MeToo movement. H-E-B is another great example of purpose-driven marketing that was spurred by micro-moments. The grocer received kudos from Brené Brown for its dedication to helping Texas communities struggling from the days-long snowstorm that caused power outages across the state earlier this year. As evidenced by these examples, weaving clever content into a brand’s digital-marketing fabric provides texture for micro-moment marketing.

New research: Consumers embrace hybrid commerce but crave a human connection

This leads us back to an important question: If CMOs are increasingly investing in digital experiences, are consumers adopting e-commerce at that same pace on their path to purchase? Khoros’s very own preliminary, consumer research can shed some light on the path forward. In a survey of 1,200 consumers from various backgrounds, demographics, and industries, one result stood out: 66% of respondents feel that the best experiences will blend in-person and digital elements. What’s more 54% shifted to this behavior due the pandemic. However, throughout the customer journey, audiences still prefer an in-person experience when it comes to researching, purchasing, and seeking post-purchase support. For example, 89% of respondents preferred to learn more about products by visiting stores, 90% leaned toward physical purchasing items, and 68% felt more comfortable with connecting with another person for post-purchase support.

66% of respondents

While most see the benefits of convenience and access that digital channels provide, two-thirds of consumers still want to have an in-person experience and almost half want to talk to a human before making a purchase. Human interaction is also key when it comes to successful digital and in-person experiences, as helpfulness of staff ranked among the top five most important aspects.

With these factors in mind, here are three digital strategies you can implement to help your brand adapt to the digital world while also remaining uniquely human.

1. Connect with audiences using D2C and omnichannel marketing

Retailers who tap into omnichannel marketing drive more sales than those who don’t. This has the added benefit of improving customer satisfaction alongside trust and moves beyond just implementation. Through an agile, united front of channels, a cohesive message for your brand can take place. Omnichannel marketing also helps build trust and is an agile way to respond to your audience’s needs.

2. Use AI & automation as keys to optimization

CMOs can take advantage of adding AI into their marketing stack for a handful of benefits. As noted in 2020, 67% of brands are already capitalizing on this trend. For example, our case study with Samsung helps illustrate what benefits automation and chatbots can bring. They increased NPS by 15%, boosted efficiency by 25%, and used bots to handle 80% of their outbound messaging.

3. Invest in data the right way

Algorithms allow global e-commerce leaders like Google, Facebook, and Amazon to harness consumer data to provide hyper-personalized shopping experiences. However, only two out of five customers feel secure sharing their data. Respondents also noted that they preferred to share their data through human contacts or via secure websites. Conversely, sharing their info on digital channels, like chatbots or mobile messaging, made them more wary. This highlights how digital solutions are viable alternatives and increasingly important, but audiences still want that human touch. By focusing on transparency and protection around the data brands collect, you can enhance customer trust, improve your CX, as well as safely join a forward-facing trend.

Solutions and executive research for the future

While the topic is more broad, CMOs can also explore conversational commerce in tandem with the strategies above to help forge authentic connection with audiences. Representatives from Facebook and Google joined us at Khoros Engage to discuss the topic and how it further helps blend the human element with cutting-edge digital experiences. AI and data are clearly critical to leading the future of commerce, something analyst Ray Wang underscores in his new book

Everybody Wants to Rule the World, which touches on these topics and more.

With this in mind, we’re excited to note that we’ll be crafting a whitepaper that dives deeper into this nuanced topic later this year. Expect further consumer insights, executives perspectives, and more. Stay tuned!

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