3 Ways Ecommerce Entrepreneurs and Operators Can Adjust to the New Normal
It was as close to the shot heard 'round the world as there has been in the ecommerce industry. Apple's iOS 14 update in the summer of 2021 greatly restricted brands' ability to target, remarket and track advertising and email performance.
That, paired with supply chain issues and a rocky economic climate, has altered what was once considered a thriving — and generally simple and profitable — business model: Source a product and run ads on Facebook.
"The channels and economics in what it meant to acquire and retain a customer had completely changed, and continue to be ever-evolving. Brands that could rely on a primary channel to acquire customers quickly saw performance drop off, and diversification became an absolute must," says Structured Agency Partner, David Bozin, who works with many of the top ecommerce brands.
The new normal in ecommerce requires a shift in strategy and execution. Let's dive into a few of the strategies and tactics that are sure to help your brand combat the new normal.
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1. Diversify your growth channels
At one point, a brand I won't mention by name was generating around $100,000 monthly, starting in their third month of business. Today, that brand generates a meager $5,000 a month. The reason? This brand was entirely dependent on Facebook ads. Once the new tracking restrictions went live last year, revenue sank like the Titanic.
If there's something that's working for your brand, you should be doubling and tripling down on it for as long as you can. But before it's too late, you want to invest some of those profits in other channels.
"Historical performance in digital marketing is not indicative of future outcomes given potential changes to algorithms, consumer behavior, or other macro events. We're testing various ways up and down funnel to ensure we consistently have multiple revenue drivers," says David Schoenfield, the founder of the ecommerce brand Ring Bear.
One of the major marketing buzzwords for 2022 is omnichannel — and for good reason. Brands that thought the glory days would last forever are now paying the price. A business where customer acquisition is built on a single channel is capable of going extinct at any moment.
2. Build great experiences
Consumers are more selective today than at any time in the last few years as inflation and other economic woes strip their disposable income. The first things that go are the products that don't bring obvious function, joy or value. Seek to build at least two of the three in your industry, and you'll see a higher lifetime value per customer and greater word-of-mouth.
Friends love referring friends to products they love. Increasing marketing spend has diminishing returns without a product that naturally enjoys word-of-mouth through a great customer experience.
"People crave exceptional experiences. They want to believe in not just a product, but a vision. Brands that create that for their customers will thrive no matter the changes in algorithms or platforms," says Wiz of Ecom, who owns and manages the Utopia community of 4,000+ marketers adjusting to the new normal.
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3. Focus on your community
The recent focus on building community around a brand is largely due to advertising issues brands are facing. Most of them are failing at it. Bluntly, most brands don't want to build community. They want the benefits of community without the investment.
Intentional relationships with customers are a major time and money commitment. It doesn't often have a clear payback period like ads or SEO. It is the result of consistency, transparency and the desire to give more value to your customers than you expect back.
In other words, it doesn't seem super profitable until years later when your community is the first to give you transformative feedback on a new product or share genuine testimonials you can leverage across your marketing.
"We utilize a strong feedback loop with our community to build anticipation for new releases, and get their feedback on upcoming designs and product releases. Our customers tend to thank us whenever we ask for their opinion, and they appreciate that we actively solicit their feedback and care. I think there's a lot of opportunity nowadays for brands to grow via community and organic channels," says Jelci founder Florence Kwok, who's built a Facebook community group of over 40,000 loyal members.
One thing we know is that the marketing landscape is always changing. But at the forefront of every successful brand is sustainable and diverse growth channels that survive platform demise and a less-than-encouraging economy.
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