E-commerce is blurring the swim lanes, but brands should dive in

As retailers, media owners and tech giants all look to attract a new pool of shoppers, every major business is becoming an e-commerce business, argues Roger Dunn.

Today, every major business is an e-commerce business. Retailers like Coles and Woolworths are now media owners, Facebook and Google are turning connections into transactions, consumers are taking control through mobile (and arguably losing it again to algorithms), and publishers are looking to facilitate frictionless shopping, from initial inspiration through to purchase.

Shoppers are the big winners here – but it’s getting more complicated for brands to establish their commerce strategy.

The dominance of marketplaces like Amazon and its rapidly growing advertising business is forcing brands to reconsider how they budget for e-commerce and highlighting lucrative new lines of business.

Google is taking on Amazon with its own retail offering, re-launching Google Shopping with a host of new features, such as a universal shopping cart, price tracking, a visual product search, and the ‘Google Guarantee’ for support and returns.

And although, in the past, Google may have been seen as a threat to retailers, they are now finding truth in the proverb ‘the enemy of my enemy is my friend’, partnering with Google for cloud and voice services over Amazon’s Alexa. A local example is Woolworths, which has launched voice commerce via Google Assistant.

Facebook has also been leaning into online commerce, with the launch of Facebook Marketplace, various new shoppable formats, dynamic ads, and a new catalogue solution for easy product and inventory management.

Instagram, owned by Facebook, now even enables the transaction itself, offering in-app checkout so you no longer need to click through to other platforms like Amazon to purchase.

Publishers are also evolving their role. We see Verizon Media combining its ad tech tools with commerce solutions, including shoppable video content, tools to help writers embed products in their stories, and tech to help audiences shop on and off site, such as ‘hot spots’, which makes images across their network shoppable. Potentially a little ahead of the curve in terms of current consumer adoption, Verizon is looking to the future and laying the foundations to drive one third of its revenue through online retail over the next five years.

Finally, bringing it full circle, retailers themselves are now becoming digital media owners. While they have always been the recipients of trade spend for in-store and traditional media formats, they are now realising the full potential of their digital platforms and monetising access to digital shoppers as gatekeepers to the point of purchase.

Coles and Woolworths (via Cartology), plus more than 20 other retailers have now launched their own version of Amazon’s ‘Sponsored Ads’ by implementing Citrus Ads technology. This enables retailers to monetise their site, offering promoted products to brands and agencies via a new biddable platform.

Brands need to have a clear understanding of their media investments across all consumer touchpoints – regardless of whether this is classed as marketing, shopper or trade spend. Data requirements also need to be established and aligned across teams, to track activity through to sale and drive the most effective outcomes.

Partnerships will remain crucial – brands can partner with retailers to create content, tech platforms to connect with shoppers, and publishers to engage and inspire further up the funnel.

Agencies need to have a point of view across the entire commerce ecosystem, to provide recommendations that help brands leverage the obvious new retail platforms like Amazon, but also the evolving old guard and their new shoppable solutions.

Amazon is the Michael Phelps of online retail, jumping into the Australian retail pool. But instead of watching it dominate or going head-to-head with it directly in the 100m, it’s time for brands to join Amazon in the relay race and leverage the retail giant’s platform.

A balanced strategy is essential, and some brands will need to change how they prepare for the race altogether. Businesses will need to continue to invest in their brand equity and become retailers themselves via direct-to-consumer offerings.

Retailers too need to understand the demands of the e-commerce race and adapt their business models to the new environment. They must leverage what makes them different, like physical stores and access to local partners and produce.

By doing this, they don’t have to take Amazon (Phelps) on at its own game. Instead, they shift the contest from a straight swim, to a triathlon. Phelps will probably still do okay, but the playing field is more level and local retailers have a much better chance of winning the meet.

Roger Dunn is general manager at Group M Commerce, the specialist e-commerce centre of excellence at WPP’s Group M


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