What are the 3 biggest challenges eCommerce merchants face in 2023?
Dark clouds are rolling in as recession looms, and more ch-ch-ch-ch-changes are taking place than even Bowie could lyricise. In this chilly and overcast climate, it’s easy for our friends in SI and vendor land to lose sight of what merchants genuinely care about.
We’re lucky enough to spend a lot of our time chatting with the people that make your targets such juicy prospects, both as an account-based marketing (ABM) business and an events brand. We’ve listened, we’ve learnt and now we’ll share.
This article will outline the biggest challenges facing eCommerce merchants in these formative first months of 2023, with the objective of offering clarity and answering a few questions – what are the biggest challenges facing eCommerce companies today? What do they mean for vendors? And how might they inform your sales strategy and positioning?
Three Things Ecommerce Merchants Are Worried About Right Now
Data and money, to absolutely no one’s surprise. However, the emphasis has shifted. Pursuing profit is less about selling more and more about selling better, with one major caveat; using what they already have more effectively.
Here’s what eCommerce merchants care about:
Google Analytics 4 (GA4) will dominate eCommerce. Merchants will care about little else in Q1/Q2
A fixation on customer retention has usurped the obsession with customer acquisition
Conversion is life. Search and merch has evolved – make way for merch and search
1. Google Analytics 4 Is Primed to Start Spanking eCommerce Merchants
First, it was Shopify 2.0, then it was ‘going headless’, and now it’s Google Analytics 4. Online retailers don’t half put a shift in when it comes to change. While eCommerce brands have until July 1st 2023 to get their act together and migrate to GA4, Google hasn’t made the data migration process simple. How unlike it.
Transitioning from Universal Analytics to GA4 will require significant time and effort investment from eCommerce brands to understand and adapt tracking processes. Tracking and reporting are, inevitably, the fiddly bits. Steep learning curves in GA4 mean that those unfortunate techies your sales teams love to hound will be tied up for a while.
Migrating and auditing their accounts now takes precedence over anything they might need or that you might be offering. At least for the moment.
What GA4 means for technology vendors
You will have to fight for their attention. Annoying at-scale tactics (also known as ‘inbound marketing’), cold calling and low-value salesy events offer even less value than usual in the next few months.
Tunnel vision will become the default setting for many people on your sales teams’ hot lists. But that doesn’t mean it’s time to go into hibernation. This requires a solid nurture approach, brought to life by account-based marketing principles.
Google Analytics 4 is a learning curve, so anything you can do to offer help and advice without ulterior motives (at least obvious ones) will go a long way to winning them over. It’s classic ABM.
Customer Data Platforms (CDPs), this is your time to shine. You’re not dead yet.
2. Customer Retention Fixation Has Replaced The Customer Acquisition Obsession
Industry saturation means brands have to siphon budgets from other areas to fuel customer acquisition marketing efforts. Notoriously difficult to predict (and poorly engaging) paid advertising is losing popularity faster than Kanye West. Retention is the new obsession and long may it live. ROAS (return on ad spend) is dead boring anyway.
Three key increases are to blame:
Competition – by the time their PR people have typed “cornered the market”, someone’s already innovated on something they’ve pioneered.
Customer switching costs – brands spend more per customer on personalisation, recommendations and loyalty than ever. When they switch, it hurts.
Cost of acquisition – getting seen is criminally tough. Looking unique and interesting enough to entice someone to choose their brand is even harder.
These areas weigh heavy on the consciousness of eCommerce marketers, and present ample enough challenge alone for any eCommerce merchant – be they big or small.
What the customer retention fixation means for vendors
Budget is being squeezed from everywhere, which means that more departments will be involved in each decision. Your sales teams’ “hit lists” and “kill sheets” (and whatever macho, not-at-all-over-compensating names you might use for them) will need some adjusting.
Vendors will need to reconsider and research just how far the web-like cracks caused by the rising cost of acquisition have spread. Where have they touched, and who now needs to be included in qualifying chats about retention?
Embracing the irony of seeking to acquire customers by telling brands to focus less on customer acquisition and more on retention will become a necessity. As will considering ways to be more sensitive to prospective customers.
As eCommerce merchants seek ways to add value through retention, so too must vendors. It’s unlikely that sales alone are up to the task. Vendors should aim to accelerate the eternal struggle to unify sales and marketing (we’ll get there one day), and end the myopic obsession with functions, features and roadmaps. Yes, we are preaching account-based marketing again.
Build target account lists with marketing and shoot for the “gentle but persistent” approach that all good ABM agencies will advocate. You don’t have to hire an ABM agency to do it, but it’s a lot easier.
3. Search & Merch Becomes Merch & Search. Conversion is Everything
Search & Merch vendors are quickly becoming Merch & Search as eCommerce businesses burrow into maximising conversion over everything. But a rash of regulatory and technical challenges means the market has never been so competitive or so poorly differentiated.
So everyone is just planning to slap some generative AI in their stack and call it a job well done. (And if you didn’t know, generative AI is now the cool term people actually use. Consider yourself enlightened.)
Generative AI’s marketing influence (which sounds a little less scary and iRobot-esque than “takeover”) will transform merchandising in particular – in perfect time for the “conversion is everything” revolution.
Bandwagon though it might be, it’s one that’s going places. In the last four years, the number of businesses adopting AI has grown by 270%, and 62% of businesses and consumers are happy to use/benefit from AI to improve experiences.
The fact is, digital merchandising is expensive and labour-intensive. AI will cut some of those corners – and boost conversions to boot. This will be the first question your prospects will ask you.
Conversion has always been important for eCommerce merchants but now that the insane online traffic of 2020-2022 has petered out a little, conversion has become a challenge in its own right. Get used to being asked “can this improve conversions?”
What prioritising conversion means for vendors
If you can’t attribute what you’re selling to improving conversions, you have your work cut out for you. Demand generation doesn’t exist. Demand discovery does.
This means thinking critically about your approach, and doing more work before you approach to ensure that every conversation is in some way qualified (a small shudder for the use of that word). Sales and marketing are working better together – we’re seeing it in action with our ABM clients – but there is more work to be done.
Vendors should pursue relevance at the right time as relentlessly as brands are pursuing better conversion rates. Similar to how you now need to think laterally about who to include from different areas of organisations, try to think laterally about what surrounds conversions.
Expect to see large CRO (conversion rate optimisation) programs sprout into existence, more test and learn approaches, more emphasis on improving the customer journey and experience and endless mutterings over “how can we improve these KPIs?” (Although that last one might be rather comforting for sales teams).
Take An Account-based Marketing Approach: Be Friendly, Be Helpful, Be Human
Three or four years ago, those of us who worked in and around the eCommerce industry were probably feeling a little twitchy, a little deflated. Fear mongers and naysayers were painting a glum picture – website shopping becoming obsolete and irrelevant and social commerce firmly taking the reins. The opposite has happened – which is grand – but it also means challenges like the three outlined above will never truly go away.
Your attitude towards them as a vendor must remain consistent. Be sympathetic and helpful and you will build trust with your customers. Do that, and you’ll already be leagues ahead of most other businesses.
Our clients, like NewStore and Emarsys, confirm what we’ve been preaching; that account-based marketing is exceptionally good at doing this. (Which is both lovely to hear and delightful for our little egos). We have plenty to say on this topic, which you can peruse at your leisure in some of our other articles.
Or, if you prefer to chat with a human about how ABM can fill your pipeline and help you grow, chat with one of our humans here. They could use someone to talk to.