Brands: to E-commerce or Not to E-commerce?

Lynn Bizri, May 16 2017

According to CommerceHub, brands are increasingly interested in e-Commerce as a channel, with 30% of brands looking at selling products via their own e-Commerce sites and 34% through existing marketplaces. 

As brands begin to pursue e-commerce strategies, this changes the customer journey and opens up new concerns and requirements around logistics and fulfillment.  It also provides the brand with new touch points to collect data and insights, increases the importance of conversion/performance marketing, and poses new challenges and opportunities for brand communication.  

Nour Al Masri (Regional Digital Media Director of Sayidaty Magazine), Mansour Salameh (Client Solutions Manager of Retail and e-Commerce at Facebook MENA), Stanislas Brunais (Senior Director of Performance at OMD in the UAE), and moderator Rita Makhoul (Managing Editor at ArabNet) came together at the ArabNet Summit in Dubai to discuss how MENA brands are delving into e-commerce, the challenges and lessons learned from early adopters and how e-commerce is impacting marketing and communication strategies. 

Below are some of the key learnings and highlights from the discussion: 

To e-commerce or not to e-commerce?
According to statistics, 5% of digital sales are sold online whereas 95% are sold in-store. Moreover, according to eMarketer, more than 50% of sales happening in-store are influenced by digital media. 

Before diving into e-commerce, brands with physical stores should first take advantage of ‘low-hanging fruit’ and optimize their digital experience in order to push sales in in-store. Brands should then experiment with existing marketplaces, see the return on investment and progression, and learn from the experience before launching their own e-commerce platform. Finally, while e-commerce may be the answer for some brands, it may not be for others, so brands should do what works for them and not just follow the hype. 

The Benefits of Selling Online
The e-commerce market is expected to reach $80B by 2020 in the GCC. With more and more people buying online and less people going to malls, brands need e-commerce to reach their customers, especially millennials. Moreover, brands that are online influence up to 60% of their consumers’ purchase decisions.

So should brands sell their products via their own e-commerce site or through existing marketplaces? Venturing into e-commerce highly depends on the brand and their presence, but it also depends on the amount of capital or investment the brand has. 

For brands that may not have enough capital, there are ready made solutions available that brands can customize, however it is important that they own their own data and know enough about their customers to target and retarget them at different stages of the customer life cycle. 

Overcoming Challenges 
In order for e-commerce to drive a business, brands will need to give their customers incentives to buy online, especially in MENA. People in the region tend to browse online, however frequently make their final transaction offline. To tackle this, brands should offer solutions or incentives such as payment upon delivery, or allowing customers to contact them via WhatsApp, call centers or live support online. 

Upcoming Trends 
Some of the upcoming digital media trends in the e-commerce space include:

  1. Real-time Content Personalization: content should be personalized to users shopping on the website.
  2. Bots/AI: moving forward, people will value and expect some kind of personal shopper that makes choosing products or services easier. 
  3. Customer Experience: customer lifetime value is the one of the most important metrics for a brand to understand their customer. Brands should engage and interact with the consumer no matter where they are in the purchase lifecycle.

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