It's been a crazy time in the internet jungle over the past few weeks, particularly at Gorilla HQ. The habitat is changing. There's some big developments going on. Stick around for a little teaser at the end of the article.
We're smack bang in the middle of 2015, and it's always a busy period. You probably have next to no time to keep up with the latest ecommerce happenings, so we've pulled together the biggest, most important issues in online retail and wrapped them up into a tidy little 15 minute read for you this month.
You don't want to skim this one, there's some business-changing learning to be had.
Keep yourself ahead of that chasing pack. It's a jungle out there...
The must read digital marketing report you've probably never heard of
This one probably passed you by, but it definitely shouldn’t have.
Mary Meeker’s annual Internet Trends Report was released a few weeks ago. It’s pretty much required reading for anyone with so much as a passing interest in online marketing.
You see, Mary Meeker is like the Warren Buffet of the internet.
When she says stuff, people listen.
When she predicts stuff, it generally happens.
When she releases her annual report on the state of the internet, people read it.
She’s one of the original venture capital uber stars that Silicon Valley start ups treat like a god. Or a monarch.
In fact, Meeker was dubbed ‘Queen of the Net’ by Barron’s Magazine after her famous report in 1995 for Morgan Stanley somehow managed to successfully crystal ball a number of impacts of the world wide web.
Meeker is part analyst, part writer and part geek, with a particular flair for exhaustive PowerPoint reports on future trends of the internet, and a particular knack of getting those predictions right.
After leaving Morgan Stanley in 2010, to become a partner at the Silicon Valley venture capital firm of Kleiner Perkins Caufield & Byers, Meeker continued to compile and publish her annual Nostradamus-like ‘State of the Internet’ Report.
The 2015 version is out, and at 197 slides, you don’t have the time to trawl through it all. So we’ve pulled out the most important insights that relate to ecommerce so that you don’t miss out on Mary’s 20 plus years of uncanny expertise.
What you need to know about the ‘State of The Internet’
- Mobile now officially comes first
The mobile device is now the most commonly used. Time spent with digital media on mobile has increased from 12 percent of the total in 2008 to over 51 percent today. If you aren’t thinking mobile first, you probably need to start.
It’s even more important for us online retailers to provide an exceptional mobile user experience. If you expect people to buy from your website, you need to make the mobile purchase process as simple as possible.
- We’ve gone from a few long sessions to hundreds of small sessions
The average American adult spends 5.6 hours a day on the Internet. As an online retailer, you’re probably rubbing your hands together in glee. However, we’ve started to move away from prolonged online experiences.
Because we are always connected (or the things in our pockets are anyways), we are developing a habit of ‘checking in’ online, with tens, or hundreds of small internet usage windows throughout the day.
Mobile device views are overtaking desktops and laptops, and this short session consumption habit will have an impact on how we present entertainment based content. Our next trend seems to fit in nicely with this assumption…
- Mobile video growth is astronomical, and this growth will continue
With the advent of faster 4G networks, improved smartphone technology, and better experiences on social media platforms like Facebook, Instagram, YouTube and Vine, time spent watching videos on mobile devices has skyrocketed.
This is an important trend for ecommerce marketers to consider. Mobile video is popular. Chances are, you customers enjoy the format. If you want to deliver engaging and entertaining content online, you need to consider this trend.
- Portrait is more effective than landscape for mobile video
It’s important to note that portrait (or vertical) videos are performing best online. Mobile users view content vertically. Flipping their device to view a landscape video is irritating for the user. You want to make it as easy as possible for your potential customers to enjoy your content. If you go to the trouble and expense of developing video content, consider a portrait version if you plan to house the clip online.
- User Generated Content will help you build a passionate community
The remarkable rise of chat apps like Viber, Messenger and Whats App have led the development of a significant internet trend. People want to communicate with others who share their personality and interests in a more intimate environment. The explosion in popularity of people watching other amateurs play video games is a good example of this phenomenon.
The internet connects everyday people from all around the world, and similar niche interests are drawing subgroups together into strong communities. If you stand for something that a subset of the community are passionate about, give your potential customers the tools to create and upload their own content. It’s real, objective, trustworthy and sharable.
Allowing your community to get involved in your business gives them a vested emotional interest in your success. User generated content can help you reduce your marketing costs, and establish genuine connection with your audience.
If you need some inspiration for your ecommerce brand, well, UGC is kinda one of our pet subjects. Here’s a few online retail specific case studies from some of the best in the business:
Building your business for your customers
We gorillas had our primate hearts warmed by some research released by Slice Intelligence this month, about one of our favourite online retail innovators.
According to data gathered from over 2 million online shoppers, figures show that subscription commerce pioneers Birchbox’s customers spend 38% more on its website after signing up for the subscription service.
We love Birchbox. And we love subscription based business models. So of course we love stats like this to prove that it works. If you sell online, you need to be building a community of loyal subscribers. Founder of the Content Marketing Institute, Joe Pulizzi explains the importance of building a passionate audience for your business in its simplest terms:
“Most enterprises don’t get to this point. They are too impatient and too campaign-focused with their content. But here’s what’s true in all examples … if you build engaged audience members who devour your content, and thus, trust and like you, they will begin to change their behavior.
They will stay longer as customers. Or they will buy more. Or they will close faster. Or they will bypass your sales team altogether and just buy from you.”
Sam Gopal’s Power Retail article on Birchbox and Slice Intelligence’s report shows you why this New York 'Silicon Alley' startup is one of our ecommerce poster boys.
These guys have redefined the cosmetics customer service experience with their novel online-monthly-subscription-box/beauty-product-gift-giving. The Birchbox model allows users to sample premium products at vastly reduced prices, with the option to buy the real thing afterwards from the company’s online marketplace.
These insights come at a time when we’ve been busy focusing on an exciting new movement in online retail marketing. Over the past few weeks, we’ve been researching a number of innovative ecommerce business models to try to uncover the foundations you need to dominate your niche, and sustain ongoing growth.
There’s one clear principle that is fundamental to the business model of almost all successful contemporary ecommerce innovators.
Unsurprisingly, it’s thinking customer first.
Of course, we didn’t need research to know the whole customer-first thing is important.
However, a bunch of ecommerce trailblazers have taken this concept one step further.
Each has built their business model on a revolutionary customer experience.
We painstakingly analysed a bunch of these success stories to help inspire our readers to look at their business differently, to find a new and better way to service customers, to use new technologies to improve our customer’s lives.
Of our final list of 8, each brand has a different way of building superior customer service into their business model.
You really should read it.
Then you should have a long, hard think about how you can change your ecommerce business to run customer 1st, profit 2nd.
Here's the full article:
Notably, Birchbox made this list.
Along with Dollar Shave Club, Trunk Club, and a few others, this American start-up has taken the subscription box ecommerce model to new levels of customer friendliness. They are part of an elite group of ecommerce companies that make their customers excited to receive their marketing. And this is no accident.
The story behind 3 ecommerce revolutionaries
During our research we came across a small collection of incredible articles that take you behind the scenes of a few of these customer-first ecommerce poster boys.
Each brand has developed a different ecommerce business model, but the approach is the same. It’s something you can learn from:
- Build a revolutionary customer experience into the foundations of your company
- Ask the customer what they want before you try to sell them anything
- Make marketing that your audience loves
- Develop a community of loyal subscribers
- Ensure retention and loyalty is a key part of your strategy
We’ll give you a little teaser of each article, but do yourself, and your business, a favour and read each piece in full.
Huckberry is part men’s lifestyle publisher, part outdoors products curator, part ecommerce genius.
They’ve recently launched an incredible new podcast series named The Distance. If you have iTunes or Stitcher, get amongst it.
The Distance podcast features compact, powerful stories about old-line businesses that you don’t often hear about.
Signal v. Noise features in depth, long form articles about all kinds of businesses big, small and in between. They’ve been sharing these amazing stories for 14 years and counting. Said stories would sit comfortably within the pages of any of the world’s most respected publications.
Emilt Triplett Lentz’s article on Huckberry’s ecommerce success is no different. Here's a sample:
Huckberry’s business model helped leverage the company in the beginning as well — as opposed to traditional retail, where the retailer pays the vendor and the vendor sells to the customer, Huckberry’s customers pay them first and then Huckberry pays their vendors.
"We make decisions all the time that if you were an e-commerce guru, you’d hate Huckberry," laughs (Co-Founder Richard) Greiner.
Huckberry’s twice-weekly email edition, for example, features four to six brands and their respective stories, blog posts, and a section called ‘Diversions’ — links to interesting stories elsewhere on the web.
Traditional e-commerce “rules” stress always sending readers to your site. But, says (other Co-Founder Andy) Forch, customers open Huckberry’s emails at 5-10 times the rate they do competitors’ emails.
The idea is that even if customers aren’t interested in anything Huckberry is selling, they’ll still find value in the email, and the company.
“All these little tricks that e-commerce guys do, we pretty much say no to all of them,” Greiner says.
“We’re trying to get people’s mind share instead of wallet share. You’re building a relationship with these people. ... Our mentality, that we are what we’re selling — people can really feel that and identify with that.”
"We are what we’re selling. We’re weekend warriors. Everyone just kind of fits our vibe." Greiner says."
Pando Daily is the number one go-to resource for everything start ups. Editor and Founder Sarah Lacy has mapped out some audacious plans for the publication, and if their content’s quality is anything to go by, they’re well on their way to ‘crushing it’.
This archive article from Erin Griffith gives you a real insight into the reasons why Birchbox has seen so much success. It’s a fun read, with some interesting lessons to be learned - you'll get a taste for it with the extract below:
“If you think about it, Birchbox has figured out a way to get women to pay money to be marketed to. The last time that happened: glossy women's magazines, but this is a smarter, interactive version of that.
The boxes cost twice the price of a newsstand magazine and you get five or six samples. They're often themed (travel, summertime, partnerships with Gossip Girl, Gwenneth Paltrow's Goop, or Glamour magazine).
The boxes contain editorialized descriptions of the products that direct users to check out how-to videos on Birchbox.com. Friendly email reminders drive traffic to the site's editorial content as well. Beauty obsessed subscribers tape themselves "unboxing" their package each month.
That doesn't happen with a magazine. I have yet to feel silly looking at the $10 charge for a box of samples in my bank account, because each month there's usually something inside the box worth around ten bucks.
A few boxes haven't delivered anything I really loved, but even then I hardly cared because I still got $10 worth of entertainment opening the box and examining its contents.
So we pay, happily, to get boxes full of samples — all of which Birchbox sources for free. Brands are happy to give the company samples of their product at no cost, and in return get a chance at converting approximately 200,000 new customers. It's worked: Half of Birchbox subscribers have converted into customers of its e-commerce site.”
The Betabrand business model is surely ahead of its time. The idea of crowdsourced ecommerce is one that makes complete sense for the customer, and for the business owners’ wallets. We’ve written about their user generated content wizardry before, but Matter writer Ben Moylan’s article about the Betabrand success story is less how-to and more imagine-if-you-could.
Matter was a successful Kickstarter project for in-depth science reporting that content publishing platform, Medium, acquired in 2013. It’s an amalgam of interesting and captivating stories about everything from escaping the Rwandan massacre to crafting the perfect sandwich. This piece fits in nicely:
“The beauty of crowdfunding is that it also serves as market research. (Betabrand Founder) Chris Lindland realized if he could test what people wanted to buy and how much of it they wanted, he could eliminate wasting resources speculating on trends. “We put the Think Tank out so that we wouldn’t waste our time any longer,” he says.
Betabrand has been steadily streamlining the submission process. People with an idea for an item of clothing submit it through the website and Lindland and his staff of 60 do all the work: Mock up prototypes, source materials, find manufacturers. Designers don’t need to figure out all the labor and source it out, because Betabrand has already done all the work for them.
Each of Betabrand’s new products — whether they come from outside designers or those on staff — goes through this voting and crowdfunding process, and about 75 percent make it to manufacturing. By avoiding that 25 percent of products that would lose the company tons of money and resources, Betabrand’s business is virtually invulnerable to failure.
“If we pretend like we’re a newspaper,” says Aaron Magness, the vice president of marketing and ecommerce at Betabrand, “it’s as if all of our customers are journalists and we’re an editor.”
Why maintaining trust in online retail is more important than ever
Being honest matters. Especially in online retail. When you don’t have a bricks and mortar store, when there’s no trustworthy human behind the counter, when you’re taking money over the internet, your customers want reassurance.
Ryan Caldbeck, in a brilliant article for Forbes this month, explains why transparency is now table stakes in the era of the internet:
“The internet has changed how we do business. One reason for that is the transparency it has brought with it. We know more about the companies we do business with; we know where and how they manufacture their goods; and we know how they treat their employees—even those at far flung ends of the supply chain.”
A couple of stories have caught our eye this month that will remind you just how important it is to establish a high ethical standard within your company culture (and make sure you stick to it).
The Flipkart ecommerce PR debacle
The first concerns one of the world’s biggest ecommerce companies that I’m almost certain you’ve never heard of. Flipkart is India’s largest ecommerce company. The sub-continent’s answer to Amazon is valued at $15.5 billion, according to Forbes Asia.
Saritha Rai reports:
“The e-commerce platform lists 30 million products, ships 8 million packages a month and has 45 million registered users. Flipkart delivers in over 1000 Indian cities and towns. It currently has 33,000 employees.”
So these guys are a big deal. But they got caught out big time.
The article details a flabbergasting debacle of epic proportions that should teach any aspiring ecommerce marketing pro a few things about the importance of honesty and transparency.
A Flipkart user posted this image of a pair of wedges to the company’s Facebook page that shows an image with a ‘MRP’ or market retail price stamp of Rs 399. The product page has the MRP erroneously listed at 799, while promoting a 50% off discount.
This may have been an embarrassing oversight. But alas, Flipkart compounding the public relations powder keg situation by photoshopping out the stamp on the shoe and relisting the same seemingly falsified 50% off promotion.
After the inevitable backlash, Flipkart removed the product page, apologised for their error, and stressed their zero tolerance for sellers who upload misleading information.
Alas, the damage had been done, Flipkart’s reputation tarnished, their customers betrayed.
Fraudulent online retailer customer reviews
Secondly, the UK Competition and Markets Authority released a report this month analysing the impact of online reviews and endorsements on consumer activity. They found this user generated content useful, with 54% of UK adults using online reviews, and many citing them as a valuable reference to inform their purchase decision.
The CMA report believes approximately 23 billion pounds of spending each year is potentially influenced by online reviews.
Sadly, the group also uncovered evidence of a worrying trend. Brands are gaming the review system.
The BBC summarises the report’s analysis of the new trend dubbed "astroturfing" - the practice of creating fake grass root reviews.
The article points to 4 main misleading practices listed:
- Businesses writing fake reviews of themselves to boost their ratings on review sites compared with rivals
- Firms writing or commissioning fake negative reviews to undermine rivals, for malicious reasons, or for personal gain
- Review sites cherry-picking positive reviews
- Sites allowing businesses to remedy negative reviews, that go unpublished, meaning a complete picture is not clear to review site users
You need to be proactive not reactive if you want to maintain the trust of your customers.
You must establish clear ethical guidelines for your employees and stakeholders, and find a way to bake these standards into the culture of your organisation. That way, everyone in your business becomes responsible for preventing this type of issues before they start.
Returning to Ryan Caldbeck’s Forbes article, we can understand why the internet means that under-the-rug-sweeping needs to be a thing of the past:
“It may be true that sweatshops have long been an open secret of manufacturing, but there now exists opportunity for those who do things differently and better . . . because people are watching everywhere.
It’s because of this that a number of consumer retail brands are actually using the internet to send a message, and that message is “We’re different. Watch us. We’re transparent. You can feel good about the way our stuff is made.”
Does your brand stand for something you believe in?
Caldbreck cites Beckett Simonen and Warby Parker amongst other brands as examples of a new breed of ethically conscious e-retailers who have established their business based on a promise they are keeping with customers.
But we think US outdoor clothing retailer, Patagonia, is the ultimate example of the right way to build honesty into the very bones of an organisational culture.
Over 40 plus years of operation, Patagonia has held themselves to the highest possible ethical standard. The company is to business what Mother Theresa is to people – ethically pure, with the most active social conscience.
Whilst launching a new project called Patagonia Provisions, company founder Yvon Chouinard reiterated the brand’s cultural code:
“We aim to make the best product, cause no unnecessary harm, and perhaps most important, inspire solutions to the environmental crisis.”
Patagonia’s Footprint Chronicles is a thing of social business wonder, a virtual online badge of ethical pride, that holds the company to account in the most public of manners. The site is a global pinboard that supplies an honest analysis of each link in the company’s supply chain.
Visitors learn how long the mill or factory has worked with Patagonia, how many workers, which language is spoken, a gender split of the employees, and a list of the items produced.
In fact, the company’s digital properties are more online social responsibility library than promotion tool. Most assuredly, this environmental education resource doubles as an incredibly effective content marketing program for Patagonia, but such a transparent and honest commitment to be better is clearly genuine. If you don’t believe me, let this guy convince you:
Patagonia bleeds passion for the environmental belief at the core of their business. Their commitment to tackle trafficked labour is almost single handed in the retail world, clearly at the expense of their short term profits, but it’s this faithful and unerring commitment that sparks such fierce love within the brand’s loyal customers.
Hopefully it will inspire you to consider your company’s moral code as well.
Some more exciting Gorilla stuff
There's some big changes happening in the Gorilla habitat. Lots of stuff is happening. Exciting stuff. Stuff that will allow us to help you and all of our ecommerce readers more than ever before.
These changes are almost complete. Our primate internet warriors have been working overtime to prepare this miniature revolution we have planned.
I'm under strict instruction to keep things hidden behind the canopy, but expect a special announcement to pop up in your inbox very soon. Like, in-the-next-few-weeks soon. So if you haven't already, subscribe for our regular learning updates.
Otherwise, get ready for some next-level ecommerce wisdom to start knocking on your inbox door. From this guy...
Stay tuned. And good luck online...