Get up to date with this week's ecommerce headlines from around the globe.
Amazon has opened its largest delivery station in Abu Dhabi
Ahead of Prime Day sales kicking off in July, Amazon has opened the second largest delivery station in the United Arab Emirates. The station will provide same-day and one-day deliveries to customers across Abu Dhabi and even some areas further out. The opening will provide opportunities for new employees and also for Amazon’s delivery service partners in the UAE.
Amazon executives raise concerns about losing warehouse staff
Amazon has received a lot of criticism for how it treats its employees, mainly due to poor working conditions and injury rates. A leaked internal document has revealed that the ecommerce giant could run out of warehouse staff in the United States by 2024, as its attrition rate reached 123% last year.
Amazon unveils new warehouse robot
Amazon has introduced a new warehouse robot, which is able to move heavy carts and operate safely with other humans working in the area. The company claims the robot is not replacing human workers, but rather, will help to address safety concerns amidst Amazon’s recent injury rate and labour crisis.
Shopify & Twitter team up to launch Twitter Shopping
Shopify has partnered with Twitter to launch Twitter Shopping as a social commerce strategy. The platform will have 2 sections, Shop Spotlight and Twitter Shops. Spotlight allows merchants to offer up to 5 products directly on their business profiles in a carousel format, whereas Twitter Shops is a separate shopping tab where merchants can showcase up to 50 products, essentially a new social storefront.
Walmart takes majority stake in automation technology company Symbotic
Retail giant, Walmart, has acquired a majority stake in automation firm, Symbotic. As an expansion of a previous partnership, Walmart aims to bring Symbotic’s automation technology to all 42 of its regional distribution centres over the next 8 years. The technology will assist the ecommerce company to increase its capacity to ship and receive products to stores and better its inventory accuracy.
Klarna announces loyalty card and in-store payments in the UK
BNPL company, Klarna, is launching a ‘Loyalty Card’ feature in its app, where customers are able to access their physical loyalty cards digitally. It has also rolled out a ‘Digital Cards’ feature, allowing users to purchase any item in three interest-free instalments at participating retailers. These additions mean UK consumers do not have to carry another card, and the shopping process is made more convenient.
Klarna fires back at Barclays BNPL report
The head of Klarna UK has slammed Barclays, calling the bank’s BNPL report “mind-boggling” and “irresponsible”. The multinational bank recently published a report on the BNPL industry, in which it warned of the dangerous amount of debt consumers could find themselves in if they rely on the service.
Buy-now-pay-later regulations strengthened and will now include ‘affordability checks’
The UK BNPL market doubled in 12 months last year, with 37% of British citizens having used a payment-splitting plan, from companies such as Klarna or Clearpay. As the UK government attempts to regulate the BNPL sector, ‘affordability checks’ have been added, including tougher regulations of interest-free BNPL credit agreements. Lenders will need to ensure the loans are affordable, and providers must conduct affordability assessments before offering customers one of the payment splitting plans.
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Developing your ecommerce strategy for digital marketplaces like Amazon, Walmart, Tmall, and Alibaba gets complicated fast—there’s a lot to think about, including marketplace SEO, product photography, advertising tactics, disjointed sellers, distribution logistics, managing ratings and reviews, and more. It can be overwhelming for brands, especially those with small teams, to know which behaviors to optimize for for the highest gains in profitability.
The good news? Revenue performance all comes down to data. Pattern was built on a data science approach to ecommerce success. We find the patterns that drive profitability, then apply them to boost our brand partners’ revenue on ecommerce channels.
And a key pattern we follow for all brands on digital marketplaces is the ecommerce equation: revenue = traffic x conversions x price x availability. As brands zero in on these four pieces of the equation, they can simplify and focus their efforts to reach truly profitable ecommerce growth.
The first part of the equation is traffic—you need to get people to see your listings if you want to generate sales. There are two ways to drive traffic to your products: through organic search and paid search. Striking the right balance between both for your brands is crucial to driving enough of the right traffic to your products, ultimately increasing your ecommerce revenue.
Knowing this, Pattern provides the resources and technology needed to drive traffic to your product listings. Our brand management team, advertising specialists, and SEO technicians work in harmony to create a unified strategy to boost your brand’s organic profile and balance that with a paid advertising approach that works for your brand and listings.
Using this method, we took Feetures socks from ranking on longer-tail terms like “no show athletic socks black” to driving traffic on parent keywords like “no show socks.”
Getting customers to your product listing is only half the battle. Once on your listing, you need customers to convert. Conversion is key to the ecommerce equation because it leads to real product purchases and revenue. Traffic without conversion leads to more time and ad spend without the ROI.
Optimizing your images, product description, bulleted details, customer reviews, and buy box performance is key to successful conversion. If you’re going to spend time and effort driving traffic, you should make sure customers can easily and clearly find what they’re looking for when they arrive at your listing.
While your imagery and descriptions are important, you also need to build customer trust to drive conversions. Studies show that your customer service efforts matter too—84% of people trust online reviews as much as friends, making strong reviews an important factor of conversion on marketplaces.
The good news is as you provide a quality product and a great marketplace experience, you’ll build brand equity, increasing your customer loyalty. Then, as your reputation, reviews, and traffic grow positively, marketplace algorithms will recognize your popularity and improve your rank accordingly. Rank drives both traffic and conversions, helping you to optimize your performance further. As your brand equity grows, your conversions will continue to grow with it.
While setting a strategic price is an important step in your ecommerce strategy, it takes more than that to truly control your price on marketplaces.
Without proper control and with wide distribution, your product could end up in the hands of disjointed sellers who lower your marketplace price to sell their inventory and make quick profits. With one seller lowering price online, other authorized sellers and retail partners are forced to lower their price to compete, creating price erosion and sending your brand down the profitability death spiral.
This Death Spiral damages brand equity, hurts conversions, and can lead to Buy Box Suppression on Amazon, hindering traffic as well. And as prices get lower and lower, your profit margin withers away, decreasing your overall revenue.
Using our data-driven insights and Pattern’s eControl partner Vorys, we help brands implement narrow distribution, identify and take-down unauthorized sellers, eliminate price erosion, and control their price online. Focusing on price control, Pattern helped LifeSeasons, a premium supplement company, take back 91% control of the Buy Box on Amazon.
The last piece of the ecommerce equation is availability. It makes sense to think of availability as a contributing factor in conversion, but we felt that it’s important enough to call out on its own—you can fully optimize your traffic, conversion, and price, but without availability, you can’t grow revenue for your brand.
A lack of availability leads to stock outs, losing conversions to competitors, losing possession of the buy box, poor customer reviews, a decrease in traffic…the list goes on. The best-performing brands on ecommerce digital marketplaces optimize their availability with high-end technology, optimize their cash on hand, and inventory time on hand to keep the ecommerce equation powered and optimized in their favor.
Pattern is committed to solving the ecommerce equation. We partner with brands to provide the expertise, resources, and technology needed to drive traffic, create content that converts, protect price, maintain availability, and ultimately accelerate ecommerce revenue and profitable growth.
Interested in improving the results of your ecommerce equation? Schedule a call.