Across the globe, economic shifts are wreaking havoc on virtually every industry. Despite massive growth during the pandemic, e-commerce is not immune to the current downturn. While total e-commerce sales are projected to hit $1 trillion in the U.S. for the first time, overall e-commerce sales growth is forecast to fall below 10% this year, its lowest level since 2009.
Retailers and brand owners were presented with an opportunity during the pandemic to build loyalty with consumers and convert them to online shopping. Still, many now face declining sales and the impact of rising inflation. A case in point is big-box retailer Target, which saw its profits plummet by 50% during its latest quarter due to slowing sales and unwanted inventory.
Clearly, the pressure is on Chief Marketing Officers to rework their budgets and business models while still pursuing rapid growth. Here are three ways e-commerce CMOs can weather the storm and get back on the growth track without reducing productivity or hampering sales.
1: Invest in better digital experiences
In an inflationary environment where consumers have less money to spend and are worried about keeping their jobs, every online purchase they make is more intentional. Let’s say you’re an online furniture retailer. If a consumer visits your site looking for a new armchair for their living room, they will want to make sure that they can afford it and that it’s the right chair for the space they have in mind. So you need to have a digitally immersive experience on your site that allows the consumer to visualize that easy chair in various situations and scenarios and see precisely how your products meet their particular needs.
Another reason to create this immersive experience is returns, which are one of the biggest margin killers in e-commerce. Indeed, a recent survey of 1,000 shoppers conducted by Dimensional Research revealed that 75% would return a product if the image displayed didn’t match the product received. Any investment you make that reduces returns is a good one.
A highly immersive, next-level website that allows shoppers to experience products from all angles and in real-life contexts decreases the odds that they’ll be unhappy with the product they’ve bought when it arrives—which helps minimize returns and boost your profits.
2: Work smarter and more cost-effectively
CMOs understand that great product visuals are essential for driving online sales. For many consumers, these images are more instrumental to their purchasing decision than product descriptions or user reviews. The Dimensional Research study found that 87% of consumers believe high-quality product imagery is important when making an online purchase.
The problem, however, is that traditional product photoshoots are expensive. Not every company is Chanel or Hermès. They simply can’t afford to put together elaborate photoshoots every time they introduce a new product or to constantly reshoot images to keep the online experience fresh. Recent data from Dimensional Research shows that 96% of retailers report challenges with product imagery creation.
The good news is that we’re now entering the post-shoot era, in which the creation of high-quality product visuals no longer relies on costly photoshoots that require complicated logistics and the presence of on-site staff, not to mention all the post-production work. Instead, visual production is shifting to computer-generated 3D imagery, dramatically more cost-effective than arranging a full-blown photoshoot. Data from Coresight Research shows that using CGI rather than traditional photography is significantly less expensive.
Take a book retailer, for instance. When you shoot a photo of a book, that image is static and cannot be reused in seasonal contexts for holiday campaigns. But when you create a 3D model of that book, it can be reused in many different ways. For example, you can place that book next to a Christmas tree with a crackling fire in the background during the holiday season. In summer, that same book can be placed on a lounge chair next to the pool.
With computer-generated imaging, you create the model once, and it’s infinitely reusable. Better still, every time you reuse the image, the average marginal cost of creating that image goes down dramatically. So the more you use it, the closer you get to zero marginal cost.
As an added bonus, you can now also A/B test out all your product images. With A/B testing, CMOs have access to a reliable feedback loop between the product images they’re displaying and how those images perform, so they can double down on what is working and discard what is not. For example, in December, you can test an image of the book with a bow on it next to a mug of hot chocolate against a standard image of the book on a white background to see which image generates better sales.
3: Create a lifestyle brand
It’s not enough to win on price anymore. To compete effectively going forward, e-commerce companies will need to create a lifestyle around their brand to keep consumers coming back. Think building a lifestyle brand is only for big companies like Apple, Nike, and Starbucks? Think again. A great example is Titan Casket, which bills itself as “the fastest-growing direct-to-consumer casket company in the U.S.”
Recently, one of their caskets showed up in a Taylor Swift video. The company used the opportunity to issue a press release about this product placement and posted about the casket cameo on social media. The press picked up on it and wrote numerous stories about the company. As a result, Titan Casket was able to connect with consumers and amplify its mission of helping families save money by selling coffins at a discounted price compared to most funeral homes. The point here is that it’s vital to build connections any way you can and understand that any business can become a lifestyle brand—even one in the death care industry.
Final takeaway
Downturns are a constant occurrence in the global economy, and it’s not unreasonable to expect that downturns will arrive more quickly and unexpectedly in today’s uncertain and ever-changing world. To deal with them, e-commerce CMOs must be agile and intelligent. They must focus intensely on their customers and engage them personally to keep them coming back.
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ABOUT THE AUTHOR
Peter McCall, Chief Marketing Officer at Nfinite
Peter McCall is Nfinite’s Chief Marketing Officer. He was most recently Head of Marketing at Lilt, a Series C SaaS startup based in San Francisco that has raised more than $93 million in funding. Prior to Lilt, he led marketing for Manufacturing Cloud at Salesforce, the world’s largest SaaS company. Prior to Salesforce, he worked in product marketing, venture capital, and corporate strategy, all with a focus on SaaS. Check out her LinkedIn.