Microsoft, Uber, Airbnb. These are just a few of the many transformational brands that have emerged during previous recessions or outbreaks. This trend has been happening for the past 100 years.
The Covid-19 outbreak has led to the worst recession since the second world war. If this trend of brands emerging during recessions continues, we can expect some global trendsetters of the future to emerge this year. These will be brands that have adapted to the sharp shifts in consumer habits triggered by social distancing in an era that is also seeing a significant data explosion. Brands that adapt fast will thrive, while others will share the fate of the likes of Kodak.
E-commerce will be a key driver for businesses to succeed in this environment. However, e-commerce has also existed for almost 30 years and the next few years is likely to see an evolution focused around three areas:
E-commerce is often associated with what we now refer to as performance channel: search-engine marketing (SEM) and paid social.
As these platforms continue to drive return on ad spend (ROAS), we expect to see more experiential-driven touchpoints, which are currently not typically associated with e-commerce. These will range from more videos driving e-commerce to influencer-led activations and augmented reality-led executions. Brands are already raising the bar here. The likes of PWC, Deloitte and Accenture keep unleashing thought leadership around it. There is surely more to come.
We have some early adopters already. IKEA can help a potential customer envisage how a sofa would look in their living room; Nike can create a digital experience to visualise how multiple variations of its latest trainers would look on a consumer. Charlotte Tilbury and NARS let women try on different shades of lipsticks through AR on their phones.
Such solutions in abundance will create elevated online experiences, which will drive shorter consumer journeys where the initial exposure will move a consumer from being aware to being interested, to eventually purchasing, within the same ad experience session. This will also shift the consumers’ expectations in the e-commerce space, which means brands that are late to embrace such trends will lose market share. To add to this, the roll-out of 5G will allow transfer speeds 100-200 times faster than 4G, to easily facilitate these ad experiences seamlessly.
These shifts are not going to be limited to retail. Verticals with higher-ticket values that require a more considered purchase, such as automotive, are also increasingly embracing experience-driven e-commerce.
Therefore, expect to see media plans full of rich media, augmented reality executions and new innovations with a ROAS number attached to them.
More than 90 per cent of the data that exists in the world was created in the past two years. At the same time, where marketers have embraced the power of data-driven marketing, the ad tech world has plenty of opinions around the cookie-less future of advertising.
For a brand to win in this day and age, relevance will still remain fundamental to success in the e-commerce space. Brands will need to leverage their own data (first-party data), whether this is in the form of cookies, personally identifiable information (PII), voice signals, private identity graphs, etc. Obviously, this will come as a challenge to a lot of businesses from a scalability perspective.
This is where strategic data partnerships become key, while solutions such as customer data platforms (CDPs) become the new buzz words. Brands will be successful in the e-commerce space if they can identify the lifetime value (LTV) of their audiences to effectively prospect and build their loyalty base.
Delivering on e-commerce with the challenges highlighted above requires a different skill set compared with the current norm. The creative aspect of media planning will need to stay.
However, this needs to be fused with the ability to understand and coordinate with people who are guardians of the organisations’ data and operations.
Successful e-commerce deployment requires managing the cost of holding the stock/SKUs and mapping supply to demand across the various marketing channels. These skill sets are currently rare, but as brands fast-track to e-commerce to survive, the transition will happen organically.
We are operating at an exciting phase when it comes to e-commerce. Uncertain and challenging times fast-track transformation and make the best of us, and in turn, we will create a new breed of brands and talent that is fit for the future. Expect to see the new AirBnBs and Ubers hit the headlines.