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The Emperor’s New Clothes: 30% of UK Retailers’ E-commerce Work ‘Offers No Value’, So How Can Retailers Get the Most from E-commerce?

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The Emperor’s New Clothes: 30% of UK Retailers’ E-commerce Work ‘Offers No Value’, So How Can Retailers Get the Most from E-commerce?
Recent research has highlighted the gap between expectation and actual results delivered by e-commerce campaigns. One major study has now revealed that 68% of survey respondents who had spent money on e-commerce in 2018 experienced a failed e-commerce campaign in 2018. Survey respondents also admitted that they only expected around two thirds of their total e-commerce advertising spend to deliver any value or return on investment. The research highlights the importance of setting realistic and clear goals before undertaking an e-commerce marketing campaign, and the equal importance of evaluating e-commerce campaigns continuously. So, how can retailers get the most value from their e-commerce campaigns?
 
Greenlight Commerce research 
 
Digital commerce firm Greenlight Commerce, aware of the increasingly numbers of sales that are now being made online and the growing power of Amazon to disrupt traditional markets, decided to investigate the efficacy of retailers’ e-commerce campaigns. In doing so it designed a survey to test how impactful e-commerce campaigns usually are and the reasons for e-commerce campaign success or failure. 
 
The survey questioned 100 e-commerce decision makers about their e-commerce spending, budgets and expectations from e-commerce advertising campaigns, and revealed high levels of variability in e-commerce campaign results, for example it indicated that of all the respondents, 99% of them were currently experiencing some sort of e-commerce challenge. 41% of respondents reported facing challenges relating to customer retention, 39% of respondents reported challenges relating to customer experience and 33% of respondents reported e-commerce challenges relating to the measurement of metrics. 
 
The survey revealed that of all the respondents surveyed, 68% of them had experienced a failed e-commerce project in 2018. The research also confirmed that 61% of the surveyed respondents believe that their organisation is behind their competitors, despite e-commerce campaigns being in operation. 
 
The Greenlight Commerce research explored the topics of how and why e-commerce campaigns can fail. The most significant factor that e-commerce decision makers complained of as reasons for project failure was that projects were “rushed”. Almost half of the respondents to the survey suggested that ‘rushed projects’ was the main reason for the overall failure of e-commerce campaigns they had personal experience of. Other important factors identified by survey respondents as reasons why e-commerce campaigns failed included budget and costing and a lack of expertise and training. Interestingly, the survey also revealed that nearly three quarters (71%) of respondents were not measuring return on investment as part of an e-commerce campaign, whereas nearly half of all respondents (48%) were not measuring customer retention. 
 
The survey revealed factors that are in need of further investigation, for example, the issue of how critical project success is in securing further funding and advertising budget from senior management. 93% of respondents indicated that project success was critical to getting future funding for e-commerce projects. Given how critical project success is to the allocation of future advertising budget, the question of bias must be raised and addressed. If project organisers are under pressure to deliver results, is this impacting how they are viewing and/or reporting how successful an e-commerce campaign has actually been? 
 
 
Targets, benchmarking and goals 
 
It is surprising that many retailers are willing to spend hundreds, if not thousands of pounds on e-commerce campaigns without setting any targets or goals for that e-commerce campaign. This is a major problem as campaigns that don’t have any targets or benchmarks are more likely to end up costing large sums of money, while delivering relatively little value or return for the businesses operating them. 
 
An e-commerce campaign that has clear targets and benchmarks has many distinct advantages over campaigns that don’t. One is that a campaign with benchmarks and targets can be flagged as being ineffective, thus saving valuable time and money and preventing a continuous, long-term implementation of the flawed campaign. Another is that, when a business quickly becomes aware that a campaign is not as successful as hoped, that business can save money by stopping or pausing the campaign, either to make some changes, or to divert valuable advertising spend elsewhere. So, how does a business go about setting goals, targets and benchmarks for their e-commerce campaigns? 
 
Benchmarking and setting targets and goals requires the retailer to set out, preferably in writing what the overall aims of the e-commerce project are. Some businesses define their benchmarks in terms of sales, so a valid benchmark might be “we aim to make 10 more sales per day, as a result of the e-commerce campaign”. Other valid benchmarks include page views of a website or a product description, so the business might say “we aim to increase our website traffic by 100% during the month of September, as a result of our e-commerce campaign”. Targets can also be set in terms of social media shares and other social media engagement for example “likes”, or comments, so a business might set their goal in the following way “we aim to achieve a 100% increase in social media engagement including likes, shares and comments in the month of September, as a result of our e-commerce campaign”. 
 
When clear targets like this are set out from the beginning, they can be compared to the budget assigned to the advertising campaign and this allows retailers to ask themselves the all-important question of whether the benefits derived from the e-commerce campaign outweigh the cost to the business in terms of resources like time and money. 
 
 
Price monitoring software: knowledge is power 
 
To be successful, e-commerce campaigns should pay attention to and evaluate the activities of competitors – something that is known as adopting a “data driven” approach. A business may, for example, decide to devote a large portion of their advertising budget to promote a product listed at a certain price, online, but this whole campaign will be undermined if a competitor reduces the price of the exact same product, a few days into the campaign. As such, if a business is not aware of what their competitor’s price strategy is, hundreds, if not thousands of pounds of advertising spend can be wasted on ill-conceived advertising campaigns. 
 
Price monitoring software allows retailers to keep track of how their competitors are pricing their merchandise, and also keep track of important factors that affect the overall price of a product, for example, online discount codes and the costs of postage and packing. This is particularly important because when products appear to be similarly priced on the “surface”, a closer look at the product might reveal that a discount code available on social media can reduce its overall cost at the checkout, or a deal on postage and packing can wipe 3-5GBP off the overall price of the product, again, at the checkout. This diverts a lot of customers who are motivated by price, so when retailers are able to monitor the pricing strategies of their competitors, they can use this valuable information by feeding it into their overall e-commerce advertising campaigns. 
 
A data driven approach also enables businesses to select appropriate times for their advertising campaigns and ensures that campaigns can be planned to deliver the best value. Alternatively, marketing campaigns can be optimised to reflect changing market conditions such as price fluctuations. 
 
 
Evaluation – take the guesswork out of e-commerce
 
Lots of e-commerce campaign organisers make the mistake of assuming the success or end result of their e-commerce campaign, without ever getting any objective confirmation of those results. Many assume that because cash has been spent on an e-commerce campaign, there must also be a return on investment of some kind. Many campaign organisers, too, will consider the success or failure of an e-commerce campaign as a personal reflection on them as a professional, and this may be another reason why so many unsuccessful e-commerce advertising campaigns are continued despite not delivering a return on investment that outweighs the overall cost of implementation. Approaches based on assumption and instinct are always very problematic approaches which is why it is essential to use an objective evaluation exercise to measure the success and or failure of a given e-commerce advertising campaign. Invariably in e-commerce things go wrong, and expectations aren’t met for a myriad of reasons, but the e-commerce organiser who has a plan of how and when to evaluate an advertising campaign can draw a line in the sand and discontinue an unprofitable advertising campaign a lot more quickly than an organiser who is guided by guesswork and instinct. 
 
Standard tools like Google Analytics can be used to measure website engagement, and many evaluation exercises will simply compare traffic before and after the advertising campaign. This is a fairly standard approach, and it usually works well for smaller operators who only have one advertising campaign in operation at any one time. 
 
A simple, but very effective method of evaluation will measure sales at the point of sale. In this way, total sales of a given product featured in an advertising campaign can be measured before and after the implementation of the e-commerce advertising campaign. This method is also effective because data can be analysed, even in the first few hours or days after an e-commerce campaign, in order to make effective predictions about sales performance over the remaining period of the e-commerce campaign. This allows retailers to plan for increased demand for certain products and will usually help them maintain their stock levels, ensuring that products are replenished and that ‘out of stock’ status is avoided.
 
More complex measures of campaigns involve three or more metrics being evaluated alongside each other. For example, a business may decide to measure how many views of a product page has led to a sale and compare this to data from before the campaign. In addition, overall traffic on a website, or webpage can be measured as can overall product revenues. 
 
Some e-commerce campaigns that ask customers to perform a given task, like leave a review, join a loyalty program or sign up to a newsletter can be measured by counting the number of total registrations, and the frequency of registrations, before and after the campaign. 
 
To ensure that e-commerce campaigns can be effectively evaluated, evaluation mechanisms should be built into the whole campaign, so the electronic checkout process may, for example, ask customers where they heard about a particular product. Equally, sales conversions and registrations for new customers can ask customers the same question and businesses can use this information to judge the efficacy of a given e-commerce campaign. 
 
When an e-commerce campaign is shared via social media, campaign success and or failure can be measured by simply counting the number of shares, likes or comments on a particular post. This doesn’t, however, give any insight into what sales may have been achieved as a result of the campaign, however many brands are happy merely to increase the recognition of their brand in certain types of campaigns. 
 
A trusted method of evaluation is to create so called “ad variations”. This is where several adverts are tweaked to make use of different images or creative content, in slightly different ways. The success of each individual advert is then compared over the duration of the campaign, which allows organisers to see which variation of the advert has gained the most traction with customers.  
 
A more complex method of evaluation is the creation of unique links to be included within each advert. Clicks and traffic that have been referred from each uniquely identifiable advert can then be counted to see which advert produced the most referrals. 
 
Other complex methods of evaluation will track which is referred to as a “life cycle” of a customer. This means that a customer’s activities while on a website will be recorded and monitored, so for example the customer will be monitored to find out what actions they have taken while they visited. Commonly measured actions include signing up to a newsletter, making a purchase, creating a wish list, saving favourites on wish lists and placing items in an electronic basket. This life cycle analysis is particularly useful as it allows businesses to differentiate between customers who engage but don’t buy and customers who engage and make a purchase. Sometimes high numbers of customers who engage but don’t buy can indicate a flaw in the e-commerce campaign.  
 
 
Integrate e-commerce campaigns with overall customer engagement strategy
 
The chances of success of an e-commerce campaign can be massively improved where the campaign is integrated with an overall customer engagement strategy. An example is a social media campaign where adverts are integrated with creative content that adds value for the customer concerned. The content might be as simple as a blog post on a subject that attracts debate and will thus be shared, liked and commented upon throughout social media, much more so than an advertisement. This extra attention invariably “boosts” the effects and success of an e-commerce campaign because customers are engaging with material in order to express their own opinions or get involved in debate. 
 
Other customer engagement strategies that can be integrated with an overall e-commerce campaign include Instagram storytelling and polling. Polling can be used to find out simple information like which colour customers prefer seeing a product displayed in, and on the other hand can be used to divine much more complex information like how customers would like to see a product developed. 
 
Instagram storytelling can be very effective and can be used to draw audiences in and give them a positive impression of the products that are being advertised. Customers wishing to buy a product may visit an Instagram post to help them visualise how a certain product would look if they were wearing it. As such it may just be the final persuasive factor that a customer takes account of before they commit to buying. Instagram stories can now be integrated with a shopfront and a shop catalogue, and individual items can be “priced” as if they were in a shop, making it much easier for customers to make purchases. This emphasis on visual connection between customer and product is linked with a higher incidence of impulse buys, which can add a welcome boost to any e-commerce campaign. 
 
 
How can retailers get the most out of their e-commerce advertising campaigns?
 
The article has highlighted a little discussed nuance of e-commerce – what happens if your e-commerce strategy is costing money, but doesn’t work? Unfortunately, every year retailers are wasting a significant amount of cash by executing poorly designed e-commerce campaigns. Even worse than this is the prevalence of e-commerce campaigns that remain in operation despite the fact that they are not driving sales and are not generating a return on investment for the businesses paying to implement them. At the heart of this is a failure to properly plan and evaluate e-commerce campaigns. For an e-commerce campaign to be successful, the project should be strictly planned in terms of what objectives the organiser wants to achieve, within a set timescale. Appropriate evaluation tools and strategies should be identified and implemented from an early stage of the campaign execution. This approach will enable a retailer to decide whether a campaign should be discontinued, or, indeed whether it needs to be tweaked to optimise return on investment. 
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