The future of eCommerce: takeaways from Mary Meeker's annual report
If you’re involved in the eCommerce space, chances are you have heard of Mary Meeker’s internet trends report. This report, which delineates data impacting commerce from 2019 into a slide deck -- is the cornerstone of many professionals. Mary Meeker is a former Morgan Stanley analyst who has raised $1.25B for her debut growth fund, Bond, based off her analytical research. Here’s the key trends of 2019, which you can utilise to create informed decisions for your business:
eCommerce growth towers above retail
eCommerce is still growing steadily and now encompasses 15% of total retail sales. Growth is slowing to 12.4% year on year - yet this is still contrasting with physical retail growth of just 2% in Q1. While the rise of eCommerce will no doubt continue to shape consumer behaviour in the coming years, this isn’t at the neglect of standard retail. eCommerce and retail are becoming more difficult to separate as digital is blurring the lines between the two. Apps, self-service kiosks at checkout and online reservation systems where customers can pick up in store - are all playing a large role in supporting physical store sales.
The key takeaway here is that an omnichannel approach is paramount. Consistency across all touchpoints of the consumer - from online to offline - is key in creating a cohesive brand experience and driving sales.
Customer Acquisition Costs are unsustainable
The marketing spend required to attract new customers is continually rising. Customer acquisition costs, particularly in hyper-competitive fields could potentially surpass the lifetime value of the customer (LTV) if this trend continues at the same velocity. Accelerating customer acquisition costs are also correlating directly with the increase in ad spend. Internet ad spending accelerated in the US, up 22 percent from 2018. Most of the spending is still on Google and Facebook, pointing to the digital duopoly. As a potential antidote to this duopoly and increasing CAC, Meeker suggests free trials and unpaid tiers (such as Spotify’s freemium model) to pull customers in sustainably. Tackling rising customer acquisition costs is one of our goals at Groupify. We utilise referral marketing and word of mouth to drive your customer’s friends to your online store, instead of being dependent on unsustainable Google search or Facebook display ads. You can learn more here or sign up & install for free here.
New digital advertising platforms are emerging: Amazon and Twitter
While digital advertising primarily goes to Facebook and Google, Amazon and Twitter are steadily growing as an alternative. Amazon has a clear advantage that Facebook can only dream of, with a database of first-hand purchasing data that can be used to provide precise ad targeting throughout every stage of the customer funnel. While Amazon’s value proposition is based off unparalleled consumer insights, Twitter’s point of difference is not its reach but high engagement rates. While Facebook & Google tend to be the go-to digital advertising channel for marketers, there’s no doubt that Amazon and Twitter will continue to shape the digital space.
Imagery and storytelling are becoming cornerstones of all consumer communication
More than 50% of all tweets now include images, which is a stark trend considering that Twitter’s default mode of communication is text-based. This correlates with the uptick in people taking more pictures than ever before, which is partly due to Instagram’s popularity. Imagery and video are becoming embedded in modern digital communication, and companies will need to heed this trend with regard to their communication strategy. The more visual our communication platforms become, the better storytelling companies can do when advertising.
There’s a lot of great trends and insights within Mary Meeker’s report, and the ones above are particularly important for retailers and brands to be aware of and act on in the coming year. A consistent theme throughout is the rising importance of agility and innovative, cohesive brand experiences.