The Era Of Ecommerce - Catalyst Digital

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IN PARTNERSHIP WITH:The Era ofEcommerceCapitalizing on the New Customer Journey

About thereportThis report is publishedby ClickZ in partnershipwith Catalyst, aspecialty search, social,and ecommerce agencypart of GroupM/WPP.It is based on a surveyof more than 750 NorthAmerica-based consumersand a survey of more than600 business to consumer(B2C) client-side marketersacross the following sectors:appliances, baby care, beautyand personal care, clothingand apparel, consumerelectronics, footwear,furniture and home decor,non-perishable goods andbeverages, and toys.This research has beencomplemented by numerousin-depth interviews withsenior marketers whoare actively engaged inecommerce advertising fortheir brands.The report is aimed at allB2C-focused companiesmarketing and selling toconsumers across the sectorsnamed above.The marketer survey wasconducted in August 2018,and the consumer surveywas carried out in August–September 2018. Interviewswere carried out betweenJune 2018 and September2018.

ContentsIntroductionExecutive summary . 01Key findings . 03Foreword from Catalyst . 05InsightsProduct discovery is split evenly across retailers and search engines . 08Consumers are non-exclusive in their purchase journey . 12Advertising budgets are misaligned with consumer behaviors . 15Brands are failing to grasp the full ecommerce opportunity . 20What brands need to do to improve ecommerce performance . 24RecommendationsThe opportunity is clear—capitalizing on it begins with anintegrated strategy . 298 ways to optimize for the digital shelf . 31

ExecutivesummaryIn last year’s Age of Amazon reportpublished in September 2017, wetold the story of the ecommercegiant and what its ascent meansfor marketers.Since then, Amazon’s growth has onlyaccelerated, most notably as its market cappassed the 1 trillion mark1.We could be led to assume that this successhas come to the detriment of the rest of theecommerce industry. However, the ‘AmazonPrime Effect’2 has also triggered an era ofincreased innovation amongst Amazon’scompetitors. -shipping-is-disrupting-retail-15374484251

As a result, this report assesses the roleof Amazon in the ecommerce landscape,but also aims to go beyond this to look atthe wider industry from a consumer and anadvertiser perspective.Building on last year’s research, thisreport first highlights consumer behaviorsacross demographics, devices, and productcategories with 18 leading retailers andsearch engines, from product discoverythrough to purchase and customer loyalty.Next, this report uses exclusive surveydata and findings from interviews withleading brands and technology providersto understand how brands are connectingwith consumers through advertising acrossretailers and search engines.At the intersection of these two datasets, ahost of illuminating discoveries arise:Product discovery is split evenlyacross retailers and searchenginesWhen consumers know what they arelooking for, 50% of ecommerce journeysstart with a retailer and 50% start with asearch engine.Google is the most popular starting pointoverall (46%), followed by Amazon (20%).In contrast, when consumers do notknow what they are looking for, 62% ofecommerce purchase journeys start witha search engine and just 38% start with ad-sources.htmlConsumers are non-exclusive intheir purchase journeydefined strategy for ecommerce retailersbeyond Amazon.Consumers move frequently from retailerto retailer as they research their purchases.For example, they are just as likely to visitPinterest to review product imagery (22%of respondents) as they are to visit Google(22%) for the same.Surprisingly, only 28% of respondingbrands have a defined strategy for Amazon,and a further 38% are “working on it”.It is clear that consumers are charting theirown paths to purchase and taking researchinto their own hands.That marks an increase since ClickZ’s Ageof Amazon report in 2017, when only 17%of brands said they had an Amazon strategyin place. In increasing numbers, brands areputting plans in place for Amazon. However,many lack the agility required to adapt tothese new opportunities.Advertising budgets aremisaligned with consumerbehaviorsWhat brands need to do toimprove ecommerce performance70% of responding brands to this year’ssurvey have increased their ecommercemarketing budget within the last 12months, while just 5% have decreasedspend.Brands have adapted their approach toecommerce advertising since 2017’sAge of Amazon report. 43% of brandsnow outsource their Amazon advertisingcampaigns, compared to just 26% last year.Amazon is a core beneficiary of thisgrowth, with many advertisers shiftingemphasis from Google3 to take advantageof the ecommerce giant’s improving set ofofferings.The same can be said with non-Amazonretailers, where 47% of brands outsourcetheir campaigns as well.However, this report also finds that themajority of browsing and purchasing activityoccurs with non-Amazon retailers.Brands are failing to grasp the fullecommerce opportunity.Delivering on those ambitions will requiremuch closer collaboration between internaldepartments and agency partners. ClickZdata uncovers a lack of integration inbrands’ approach to ecommerce advertisingon search engines and across retailers.ConclusionThe fierce competition between Google andAmazon is driving the pace of innovation.While Amazon has posted 2.2bn4 inadvertising revenue and is growing ata “triple-digit” annual rate5, Google’sadvertising products brought in a huge 95.4bn in 2017.The global ecommerce market sharebattle is only getting started. Brands needto up their game to capitalize on whatis an unprecedented era of ecommerceopportunity.Clark BoydAuthor, The Era of EcommerceCapitalizing on the ecommerceopportunity requires an integratedstrategy.‘Improved user experience’ (22%) and‘closer alignment of digital marketing withmerchandising teams’ (8%) were bothvoted in the top five biggest ecommerceopportunities today by brands.Just 25% of brands say they have to-amazon-ad-sources.html2

Key findingsThe following are the key findingsthat have shaped the structure andcontent of this report. 3

When a consumer knows what they are looking for, 50% of ecommercejourneys start with a retailer; 50% start with a search engine.85% of browsing and purchasing activity occurs with non-Amazon retailers;meanwhile, only 25% of US brands say they have a strategy for ecommerceretailers beyond Amazon.20% of consumers go to Amazon first when they know what they are lookingfor, and a further 10% start at Walmart. 46% of consumers begin with Google.Across the board, advertisers are struggling to keep pace with consumerbehaviors. On average, there is a 29 percentage point gap between theproportion of consumers who have visited a retailer to research and theproportion of brands who market on that retailer’s website (53% vs. 24%).When a consumer does not know what they are looking for, 62% of ecommercepurchase journeys start with a search engine and just 38% start with a retailer.Even if a purchase ultimately occurs offline, the role of online interactionsremains critical. We found that 74% of consumers research online and thenpurchase in-store either “Always” or “Sometimes.”While a huge 96% of consumers surveyed had visited Amazon within thelast year, 78% also said they had visited the Walmart website to research orpurchase.Within the large section of brands (63%) planning to increase their GoogleSearch budget over the next 12 months, 79% say they can attribute spend toresults “well” or “very well” on this advertising platform.Only 53% of brands who have a marketing presence on Amazon also carry outsimilar activities on Walmart. The drop-off in advertising activity beyond Googleand Amazon is marked —and at odds with how consumers purchase online.There is a lack of integration in brands’ search strategies across all productcategories. Responsibilities are split between departments and more brandsplan to decrease (17%) than increase (14%) their investment in third-party,cross-retailer platforms. A new approach to ecommerce search is required,starting with a more integrated strategy.

Forewordfrom CatalystFor the past twenty years Catalysthas helped brands connect withconsumers through the searchmarketing channelsAs ecommerce websites have evolved tobecome key consumer discovery platforms,so have our strategies and services. Todaywe take a holistic approach to drivingconsumer and brand connections across alldiscovery platforms. 5

From paid media activations to SEOopportunities, we are at the forefront ofsearch marketing across traditional engineslike Google and Bing, as well as emergingopportunities on ecommerce sites ecommerce websites, and from verticalspecific retailers to visual search, wesought to understand how and whenconsumers are using specific channelsand how advertisers are prioritizing eachchannel.In last year’s Age of Amazon report,Catalyst and ClickZ explored howconsumers and brands were adaptingto Amazon’s dominance as both a keyshopping destination and an advertisingplatform.Our findings supported our hypothesisaround the nonlinear consumer journey.In this report, wearm advertisers withstrategies they needto maximize businessresults across alldiscovery platforms andecommerce channels.However, as Amazon’s growth hasaccelerated, their competition has alsobegun improving how consumers discoverand purchase products on their sites.Walmart and Target have been investingin better customer experiences and areworking towards more direct advertisingopportunities.Google is expanding its Product ListingAd (PLA) features and capabilities whileBing rolled out In-Market Audiences forimproved targeting.Given these trends, in this year’s researchwe’ve taken a broader look at the consumerjourney, examining even more discoverychannels. From traditional search enginesHowever, as we evaluated how advertiserswere planning consumer connectionsacross discovery touchpoints, weuncovered a large disconnect between howconsumers are discovering products andbrands and how advertisers are investingtheir marketing budgets and resources.Ultimately, we found that there are hugeopportunities for advertisers to think moreholistically about reaching their consumersduring each phase of the consumer cycle.In this report, we arm advertisers withstrategies they need to maximize businessresults across all discovery platforms andecommerce channels.We hope that this report provides brandsand advertisers with the new insight andinnovative thinking required to be a leaderin today’s era of ecommerce.Kerry Curran, CatalystManaging Partner, Marketing IntegrationCatalyst is a specialty search, social, and ecommerce marketing agency. Catalystspecializes in digital solutions that are innovative and effective, and that consistentlydeliver business results for Fortune 1000 companies. From advanced Amazonmarketing strategies to sophisticated search campaigns, Catalyst offers industryleading capabilities required for best-in-class search and social programs.Contact Catalyst to maximize your brand’s business m

AcknowledgementsMeaghan Werle, KantarConsultingSenior AnalystAmy Vener, PinterestVertical Strategy Lead, RetailAmy Vener leads Pinterest’s retail strategy and helpspartners understand how to best use the Pinterest platformto achieve a competitive advantage within their industry. Sheworks across product and marketing organizations to havea holistic view on how Pinterest can best meet the needs ofretailers.John Denny, CAVUVenture PartnersVP eCommerce & DigitalMarketing at CAVU VenturePartnersJohn is an experienced Amazon, ecommerce, anddigital marketing strategist with an expertise in Amazonadvertising, SEO, and operations. He is currently VPEcommerce & Digital Marketing at CAVU VenturePartners. Prior to joining CAVU in early 2018, he was VPof ecommerce & Media at Bai, during which time Bai wasnamed Amazon’s “Vendor of the Year” for 2015.Meaghan is a Senior Analyst on Kantar Consulting’s digitalresearch team, focusing on Amazon and emerging digital andecommerce trends across channels. She develops thoughtleadership on topics like social commerce, online grocery,and emerging technologies in retail for Kantar Consulting’swebsites, events, and custom projects. Before joiningKantar Consulting in 2016, Meaghan was an analyst at amarket research firm in the Greater Boston area, working onmarketing communications and package design studies forvarious CPG, financial services, and pharma clients. Meaghangraduated from Cornell University with a B.A. in psychologyand minors in visual studies and communication.Brian Monahan, NewcoCo-founder & Chief Evangelist(former VP of Marketing at Walmart and Headof Customer Strategy at Pinterest)Co-founder and Chief Evangelist, Brian Monahan is anaward winning pioneer in the marketing industry who joinsNewCo full time after having spent three years as’s Vice President of Marketing. Brian conceived ofNewCo in 2012 alongside friend and fellow cyclist, JohnBattelle, while they were on a mountain bike ride throughBrian’s home county of Marin, CA, where he lives with hiswife and two daughters.Jennifer DiMotta, JenniferDiMotta ConsultingPresident & Owner of JenniferDiMotta Consulting LLCFor more than 20 years, Jennifer has built high growthecommerce businesses across retail, CPG, and brandcompanies through harmonizing strategy, culture,profitability, and top talent development. Prior to launchingJennifer DiMotta Consulting LLC, a leading ecommerce andDigital Marketing consulting firm, Jennifer held high-rankingpositions at Bluemercury, Sports Authority, Office Depot,, and Hayneedle.Nikolai Zeinikov, HeinekenKerry Curran, CatalystEcommerce DirectorManaging Partner, MarketingIntegrationKerry Curran is Managing Partner, Marketing Integrationat Catalyst. She has over 18 years of experience in clientservices, business development, and digital marketing.In her role on the Catalyst executive team, Kerry leadsbusiness development and marketing across all ofCatalyst’s search and social business. Kerry is alsorecognized as a search marketing and ecommercethought-leader. She has spoken at SMX Advance, SMXWest, Criteo’s Commerce Summit, key WPP ecommerceevents, and more. Kerry has been featured on Forbes,DigitalCommerce 360, MediaPost, and more.Luis Navarrete Gomez,LEGOHead of Global SearchMarketingLuis is Head of Global Search Marketing at The LEGOGroup, and defines the strategy for organic and paid searchactivity globally for the iconic toy company.Luis comes from a technical background in computerscience and has more than 14 years’ experience in searchmarketing with cross-functional expertise in technologyand business management and leadership.Rob Gonzalez, SalsifyCo-Founder, EVPBusiness DevelopmentRob is the co-founder of Salsify, which works withcompanies like Coca-Cola, 3M, Johnson & Johnson, Mars,LEGO, Levis, Bosch, L’Oreal, and hundreds of other globalbrands to manage and optimize their brand presence on thedigital shelf.Sean Kainec, ComcastDirector of SEOSean Kainec is a career digital and technology focusedmarketer with extensive ecommerce, retail, and strategyexperience. He currently manages the strategic vision,implementation, and measurement of SEO and partnerswith Comcast’s other entities to ensure a unified vision ofSEO is spread throughout the greater organization. Sean isalso a member of the Yext Customer Advisory Board.Recently included in Shopper Marketing’s “Who’s Who inEcommerce 2017” and “Who’s Who in Digital Marketing forShoppers 2018,” Nikolai has more than 10 consecutive yearsof winning in CPG ecommerce and Digital Marketing. He’sworked in 16 different countries in Europe, Asia, and theAmericas. His career includes senior ecommerce positions incompanies such as The Walt Disney Company, Kimberly-Clark,and most recently Heineken USA.Patrick Cartmel, CriteoVP, Agency Strategy, ClientServices and SalesPatrick Cartmel is VP of Agency Strategy and Partnership atCriteo, the advertising platform for the open Internet. Patrickjoined Criteo as part of its 2016 Hooklogic acquisition, wherehe led the sales and account team managing the top mediaagency and brand manufacturer engagements globally. Patrickhas previously held positions at Undertone, WPP, MEC, Atlas,and Avenue A/Razorfish.7

Productdiscovery is splitevenly acrossretailers andsearch engines50% of consumers start theirjourney with a retailer while 50%go to a search engineMuch has been made of the shift to Amazonfor initial product discovery, with somestudies6 stating this is now the defaultstarting point for consumers today. ate-of-amazon-2016-report.pdf8

When consumers know what they arelooking for, 50% of ecommerce journeysstart with a retailer and 50% start with asearch engine.Figure 1. Where do you start your researchwhen you know what you are looking for?49.87%4%Target3%3%Home DepotThe full picture of this consumer trendis depicted in Figure 3, showing Googleas the most popular starting point whenconsumers know what they want, followedby Amazon.Figure 3. Where do you start your researchwhen you know what you are looking for?(Filtered by search engines and retailers)50.13%0%100%Retail/CommerceSearch EnginesAmazon is the most popular of all retailers,with 20% of consumers stating they goto this website when they know whatthey want to buy. A further 10% starttheir journey at Walmart. A wide rangeof retailers including Best Buy, Target,and Macy’s are also important sources g the above chart by the 50% ofconsumers who start this research processwith a search engine, the vast majority(93%) use Google and only 7% use Bing.50%25%All0%Retail/Commerce websitesThis highlights the enduring importanceof Google as an entrance to the onlineshopping journey.Of course, Amazon results make up ahealthy proportion of product search resultson Google, which begins to point to theblurring of lines between retailers andsearch engines today.Although in isolation retailers form asmaller contribution to this researchjourney, when combined they account for30% of the total. It is therefore essentialnot to overlook the impact of sites suchas Walmart, Best Buy, Target, and HomeDepot when considering a retailer strategy,which we will delve into more detail later inthis research.Bing4%Best h EnginesWhere consumers start theirpurchase journey when they donot know what they are lookingforIn contrast to the 50/50 split whenconsumers know what they are l

looking for, 50% of ecommerce journeys start with a retailer and 50% start with a search engine. Google is the most popular starting point overall (46%), followed by Amazon (20%). In contrast, when consumers do not know what they are looking for, 62% of ecommerce purchase journeys start with a search engine and just 38% start with a retailer.