Ecommerce in 2011 is going to be a whirlwind of growth and change. Clue yourself in to these four secrets to help your online business survive and thrive this year.
Unfasten your seatbelts.* It’s going to be a smooth ride.
Smooth ride to the top, that is.
2011 is set to be a bullish year for ecommerce, coming off the heels of a record-breaking 2010. In fact, JP Morgan analysts project ecommerce revenues will grow 13.2% in the US alone.
But how do you stay atop this bull? Check out these secrets to success.
Secret #1: Ecommerce Goes Global in 2011
Online business owners have been selling overseas for years, but internationalization will pick up steam in 2011. As the internet population increases around the world, marketers are salivating at the opportunity for increased ecommerce revenues. While most online businesses will continue to operate in their home countries, you can expect some of the bigger players to extend their hands abroad.
Take a look at the number of internet users in these 6 countries. As of 2005, Western countries had a much higher penetration rate, especially when you consider the total population of each country. (For perspective, China had a total population 1.3 billion in 2005 while Canada’s was 32.3 million.)
Five short years later, look at how the tide has turned:
More important than the actual number of users, developed internet countries like the US and UK have minimal growth potential for new users.
Don’t get me wrong – ecommerce in developed internet countries will experience big gains in 2011. But you might consider planning for a more global strategy in the coming years – there’s just too much potential to ignore.
Secret #2: Social Commerce Continues to Dominate
Over the past months, social commerce has been the industry buzzword, and rightfully so. We’ve seen an increase in consumer dependence on ratings and reviews, along with new forms of social shopping. Never before have we seen customers take so much control over brands and businesses.
For 2011, Facebook seems ready to unleash its own ecommerce platform to over 500 million users, creating an even bigger focus on social. This, in addition to these other social commerce nuggets, should prove my point:
- 83% of all holiday shoppers are influenced by customer reviews (ChannelAdvisor, August 2010)
- Majority of consumers (74%) rely on social networks to guide purchase decisions (Gartner, July 2010)
- Highly-rated products will increase likelihood of purchasing for 55% of consumers (eConsultancy, July 2010)
- Small companies are investing five times more of their interactive marketing budgets into social networks and blogs than larger companies (Forrester)
Also, pay close attention to location-based platforms and group buying. Tools like Foursquare and Facebook Places will increase in popularity throughout 2011, providing your online business a new opportunity to find customers and directly market to them. You’ll also see the impact of group buying on ecommerce, particularly from sites like industry-leading Groupon and smaller players like Tippr.
Regardless of your social strategy for 2011, you can’t afford not to listen, monitor, and engage in your online reputation. If you don’t play a part, your customers and competitors will.
Secret #3: Online Marketing Shifts Focus from Customer Acquisition to Retention
Another big part of social commerce in 2011 will focus on customer support and experience. As customers and businesses shift to social, expectations for shrinking response times and educational resources follow. Thus, online businesses will be wise to go the extra mile for their customers at all touch points, from email messaging to phone calls.
More importantly, a focus on customer retention is sheer economics:
- Acquiring a new customer can cost 6 to 7 times more than retaining an existing customer (Frederick Reichheld, Bain & Company)
- 55% of consumers recommend a company because of its customer service, as opposed to products at 49% and price at 42% (RightNow)
- 85% of customers are willing to pay more than the standard price, if a great customer experience is involved (RightNow)
- Businesses which boosted customer retention rates by as little as 5% saw increases in their profits ranging from 5% to a whopping 95% (Frederick Reichheld, Bain & Company)
- 61% of Americans report that quality customer service is more important to them in today’s economic environment, and will spend an average 9% more when they believe a company provides excellent service (American Express)
Wait. Satisfied customers will spend 9% more, just for excellent customer service?
Here’s what this means for your revenue, assuming a totally satisfied customer base and $250,000 in yearly revenue:
In this example, excellent customer service provides an extra $22,500 to your revenue stream, which is the equivalent to over one month of free revenue.
Moral of the story? Step up your customer service in 2011 to keep your current customers where they are. In turn, they’ll help you with acquisition via recommendations.
Secret #4: Content Takes Its Throne
We’ve been saying that “content is king” for years now, but content marketing will take its throne this year. Unless you serve a very small niche market or have a highly established luxury brand, your products are considered a dime a dozen to prospective customers. Let’s face it – the internet is full of products that are similar to yours, which is why your job in 2011 will be to educate customers on why they should purchase from your ecommerce site.
The solution? Create awesome content.
Customers are no longer receptive to one-sided sales pitches . Instead, they’re looking for resources that will better their lives and teach them something new. By inserting your brand and products into this quest for knowledge, you’re better equipped to serve as a trusted expert. That’s why you should join the content bandwagon and get started now – fom blog posts to webinars and videos, there are several ways to begin your content marketing strategy.
Here’s some insight into the future of content marketing from eMarketer:
- Spending levels on branded content was 100% higher in 2010 than 2008
- 73% of companies with a social media strategy used unique branded content in their social media campaigns
- 68% of marketers are shifting from traditional forms of marketing to branded content
Sean Carton from Clickz succinctly describes the importance of content in 2011:
“To compete in the social media space, companies will have to constantly create content to push out to their social networks in all its many forms – blog postings, tweets, Facebook updates, customer-service interactions, etc.”
Content is declaring its reign this year – are you in or out?
2011 will be quite the year. Long live the ecommerce bull.
-Matt Winn, Online Communications Specialist, Volusion
*Please don’t unfasten your seatbelts. It’s against the law and I don’t want to see you get hurt.