Online sales are soaring. The NRF just released its holiday sales report showing retail sales in November and December grew 8.3% to $789.4 billion, exceeding expectations. This was no doubt fueled by the 23.9% growth in online sales to $209 billion.
Recently I hosted a panel of experts who talked about online sales trends and how small retailers can take advantage of the positive trajectory. The panel was sponsored by Ecwid, an e-commerce platform for small and medium-sized businesses.
The panelists were Erik Suhonen, the vice president of global product partnerships at Ecwid; Ricardo Lasa, the CEO and co-founder of Kliken, a company that helps small businesses run online marketing campaigns; and Akilah Amos, an herbalist entrepreneur who runs Kissed By a Bee Organics, an online apothecary.
Here are some highlights. (Responses are edited for clarity and brevity.)
Online sales over the holiday season were robust—is this a sign of the future, or is it mostly COVID-19 related?
Erik: At Ecwid, we saw a massive movement for businesses to come online and to do more business. A lot of the consumer shift is going to help this stay around for a very long time. Partly, this is because consumers have seen how convenient it is to shop online.
Ricardo: There was definitely a change in behavior. Forced, in a sense, since to get any product, you had to buy online. As we go forward, buying online is convenient, transparent, and tailored, meaning when shoppers know exactly what they want, they can find it. They don’t need to settle for something they kind of like once they get to a store.
As people get used to buying this way, those behavioral changes are here to stay. Almost every purchase decision starts on the web. However, going to an actual store and seeing the exact product you want is more tangible. So, I don’t see a step back from that.
And going forward, for younger generations accustomed to finding everything online and doing their homework online—their primary driver for purchases will be online. Whether they end up going to the store or not, they’re going to have done their research online.
Are businesses technologically prepared for this shift?
Erik: We saw a ramp-up in consumer demand, which led to a very material ramp-up of the businesses coming online to sell.
1— Some businesses were already selling online and had the inventory ready. They also had a good understanding of who their audience is and what products to sell, especially during a pandemic.
2—Others had to make a shift. Maybe they were selling products that were less pandemic-friendly and shifted to selling masks, hand sanitizer, etc.
3—There are quite a few businesses still selling brick-and-mortar or a hybrid of brick-and-mortar and online. They were able to make that shift very quickly. For instance, when we released our order online, pickup in-store, and curbside pickup options, they could take advantage of those technologies [which attracted customers].
Did COVID-19 change affect advertising volume?
Ricardo: We saw one huge ramp-up across the board, from our partnerships, of people jumping on Google Shopping. It was a big jump—and it’s here to stay because everyone sees the success of online selling.
Has the whole customer experience changed? Are consumer expectations different than a year ago?
Akilah: We live in an Amazon world, so everyone expects things instantly. But people do extend a lot of grace to small businesses, especially during this time.
Erik: Merchants who manage customers’ expectations fare much better. And managing consumer expectations helps create a good customer base.
Consumers have also shifted quite a bit in terms of where they’re finding products. At Ecwid, we think a lot about discoverability and want to make sure the businesses using our platform can get their products in front of potential customers in a variety of different ways.
It’s the multichannel concept. It used to be good enough to only have an online store. And while that’s still a powerful sales channel, many consumers now find products on Instagram, Facebook, Google, or other places when they’re searching, browsing, or looking at their news feed. The business’s products pop up right in front of them, and they think, “That’s interesting. I didn’t know about that product or that company. Let me check that out.” And they can buy right there on the platform.
That is a powerful concept that’s now a big trend—businesses that are taking advantage of those different sales channels thrive.
NRF’s research shows consumers are increasingly researching online before they shop, online or in-store. And many start at a search engine to do their shopping, or just go on Google and say, “Find me this.”
Ricardo: This is why it’s good to use Kliken. Research absolutely starts online; a lot of it on Google. When a consumer is searching for something, that means they’re ready to learn more about it or buy it outright. So, it is essential to be there.
One significant shift we’ve seen, and it’s going to be even more critical in the future, is a lot of their research is validated by ratings and reviews, which carry an incredible amount of weight on the buying decision.
Small business owners need to set up Google for Business. And get reviews. It can be a little scary, worrying about getting a one-star review if you’re responsive and tell them you’re sorry this went wrong, many customers will change a one-star to a four-star. And if they only see five-stars, it rings a bell because things aren’t perfect.
It’s critically important to be on Google, but you should also be on all the major platforms. Google is a very complex ecosystem: Google My Business, Google Shopping, Google Ads, Google Smart Shopping Campaigns, and retargeting. Then you have Facebook, which is becoming as complex with Facebook Shops, Facebook Pages, Facebook Ads, Facebook listing ads, and Facebook linked ads. And then you tack on Instagram, Pinterest, and TikTok.
You never know where your customers are, so you have to be on all the platforms. And it’s important to maintain your reputation online. Make sure you have your reviews in place, that customers can put testimonials on your website because social proof goes a long way to help decision making.
What do you think about the growth of social selling?
Akilah: Most of my clientele comes from Instagram and Facebook. I love that they’re seamless, so when l post on Instagram, it goes to Facebook and Twitter as well. And I agree about putting reviews on your site; they’re absolutely essential because people are looking for social proof. They want to see/hear real-time reviews.
Erik: When it comes to social selling, being able to use messaging is helpful too. For instance, using Facebook Messenger on your own store. We’ve built that into the Ecwid platform. So, if I am on someone’s and have a question, I can just message them, and we can have a real-time conversation.
The number-one factor that encourages consumers to buy online is free shipping. How can business owners offer free shipping without destroying their margins?
Erik: Research shows there are growing expectations for free shipping. Many merchants on our platform offer free shipping if they spend X amount of dollars in sales.
It’s a win-win. Consumers get free shipping, and the merchant wins by bundling. In some cases, we’ve had merchants who’ve been able to raise prices to cover the cost.
Ricardo: Part of using the Google shopping platform is you need to be explicit and explain your shipping strategy. There are two strategies: raise prices to cover shipping costs or bundling, which is a great solution.
Post pandemic, which shifts in consumer behavior will stay?
Erik: There has been a shift to BOPIS (Buy online, pickup in-store). However, this depends on the product. For some products, they want to try it on it, feel it, or smell it. In those cases, there’s more of a hybrid approach.
Consumers expect an excellent customer experience. But how do businesses create a welcoming environment online?
Akilah: Be genuine and be yourself. I make an eczema butter. There are millions of people that make eczema butter. What makes mine different? I’m a real person. I’m the face behind my brand, and I don’t rely on anyone else to do my marketing.
I give them the highs and lows of my business. People go on this journey with me, which provides them with a virtual customer experience. I make sure they know they are a part of it. We are all in this together.
Erik: If your brand is authentic and you are who you are, that is powerful. Video can help bring out the personality of the business owner.
Ricardo: This is one of the most important things business owners can do. People get to see you without having to talk to you. The other thing to do is use live chats, which allows customers to speak to someone right away as if they are actually there. That connection is essential.
How do you retain your holiday customers post-holiday?
Akilah: I offer a loyalty program, where customers can opt-in and get points. Once they accumulate a certain amount, they get $10 off, $15 off, or more. I also do Free Fridays. It could be free shipping or a free product.
Ricardo: Email your customers and create ads, saying, “Here’s a new offer for you,” and boom, they see it on your website, in your ads, everywhere. That’s the final marketing vision.
Erik: Offering limited-time promotions can be effective in reaching consumers in several different ways. Google ads. Email. All those emails you collected during the holidays—re-engage with them.
Not that more businesses are online, how can they expand and scale?
Ricardo: On our platform, you can set up Google feeds for different countries. When we launched, we thought we’d see one or two countries per customer. Suddenly, we see 10-12. They Google shop in Italy and then go to Switzerland or France. If you’re a Canadian company, you can market in the U.S. and vice versa.
Erik: Geographical expansion is really important. There are two aspects that are growing your customer base. One—it helps to know who your core audience segment is. That could be demographic, geographic, behavioral—however you define your core customer. Then look for those segments in other geographical areas
It’s not a shotgunning approach, but more prescriptive on “where are my customer bases around the world?” Or even within the country. Two—think about how to leverage technology. As you grow, state to country, you have to start thinking about things like international shipping and international taxes. The Ecwid platform features automatic tax calculations for where businesses ship, whether across the street or around the world. Technology helps by taking the complexity out of it so business owners can focus on running their businesses.
How can businesses provide a more personalized online experience?
Ricardo: The only way to do it is through machine learning. It’s coming, fast and furious. When consumers are on a website, it’s learning patterns of what they’re liking and disliking and the way they browse. Does a customer prefer to search or use online chat? Then it automatically produces the same experience, clustered to different customers, based on their preferences. It’s too complex to do by hand, so platforms will have to build their own AI, but it’s coming.