Any Other Business: 11 March 2022

This week’s AOB looks at the latest e-commerce news from around the world including why Amazon is rethinking its bricks-and-mortar strategy, and how online marketplaces are overtaking Google for product searches.  

It’s no secret that online marketplaces are dominating the e-commerce sector. A recent survey by inriver¹ of 6,000 US, German and UK online shoppers found that 44% of them now use a marketplace – such as Amazon or eBay – as the starting point to search for products. This compares to just 19% who use a major search engine (like Google), and 9% who use a brand’s website.

Sellers on Amazon should be aware that 78% of product searches on the site today do not even include a brand name, highlighting the importance of them including clear, thorough product descriptions to sell their products instead. Consumers agree: 39% of respondents said product information was “essential” and 44% “very important” to their purchasing decision, whilst more than two thirds have decided not to buy a product due to a poor description.

“Consistency is key. If you sell products across multiple online retailers and marketplaces, you must maintain high quality product content throughout the entire buying journey,” the report concludes. “Shoppers want easy access to all the details they need to make buying decisions. They are notoriously fickle […] if you don’t provide it, they are likely to find it on another site.”

A start-up is hoping to revolutionize the home-delivery market with a solution that can be attached to the side of people’s homes. Fresh Portal’s² flagship delivery locker will be accessible from two sides: one where the courier can drop off the item using a one-time access code, and the other where the homeowner can collect it from inside their house. The locker is temperature-controlled, meaning customers can order their favorite meal delivery before leaving work and have it waiting and still warm when they get home, or receive groceries when they’re away from home with the reassurance they will be kept chilled until they return. The locker’s capabilities make it suitable for temperature-sensitive medicines, too.

The home-delivery solution, which is still in the development stage, will be controlled via an app and integratable with third-party delivery platforms like UberEats and Deliveroo. “DoorDash [as an example] can deliver to a First Portal versus your porch or knocking on the door and waiting,” explains creator Jeremy High³. “Efficiency and the first-time delivery success metric goes up because they’re delivering to a product.” Watch this space…

Online merchants debating adding a “Buy Now, Pay Later” (BNPL) option to their online checkout should look no further than the example of Keyzar Jewelry⁴. The company, which began on Etsy two years ago, added Shopify and PayPal’s installment payment options when it launched its own direct-to-consumer website in January 2021. Following customer demand, it later added Klarna, too.

The impact was instant: within 30 days, customers began making higher order value purchases, whilst conversion rates increased around 30% in the first month. Overall web sales increased by about 14%⁵.

The jewelry company’s decision to introduce a BNPL option was largely influenced by the demographic of its employees. “We realized we’re all in our 30s and tend to be broke — but that doesn’t mean we don’t want or deserve a fine piece of jewelry we can be proud of,” CMO George Pich says⁶. “We decided to think of ourselves as the jewelry brand that cares and understands millennials and Gen Z. [Through an installment payment plan], you can still get the proposal you want, even if you don’t have a big budget.”

Globally, the BNPL market has grown quickly over the last several years. It’s estimated that by 2026, 1.5 million consumers across the world will use a BNPL solution, helping the sector take a 24% share of physical goods purchases by value⁷.      

Amazon.com Inc has announced it will close all 68 of its physical bookstores, mall pop-ups and “Amazon 4-star” locations – which sell a selection of the site’s highest-rated products – across the US and UK. The online retail giant will instead focus on its grocery sectors – Amazon Fresh and Whole Foods Market – and continued investments in Amazon Style and Just Walk Out technology. “We remain committed to building great, long-term physical retail experiences and technologies, and we’re working closely with our affected employees to help them find new roles within Amazon,” the company said in a statement⁸.  

It’s an ironic twist that the company has struggled to make a success of its bricks-and-mortar retail experiments due to the unrivalled popularity of online shopping – a movement it was responsible for starting. Amazon’s “physical stores” revenue made up just 3% of its US$137 billion in sales last quarter⁹, with the majority coming from its Whole Foods subsidiary. The company completed the US$13 billion acquisition of Whole Foods Market – which has over 450 locations – in 2017.

The holy month of Ramadan begins in less than a month. Kicking off at the start of April (dates vary slightly by country), around 1.6 billion¹⁰ Muslims across the world are expected to join in the 30 days of reflection, contemplation and celebration.

For online retailers, there’s a unique opportunity to tap into the burgeoning Muslim economy – and with observers buying gifts and food in the weeks leading up to Ramadan 2022, now is the time to prepare your business. Fortunately, we’ve created an in-depth Ramadan guide to help you understand the opportunities: how people like to shop, what they’re buying, and where from.