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    E-commerce has been growing rapidly and playing an increasingly larger role in the consumer experience. In fact, by 2021 more than ¼ of the world’s population, some 2.14 billion people, will be shopping online. Their online purchases will account for nearly 20% of retail sales worldwide. Some experts predict that this number will increase to more than 95% by 2040.

    Add to these figures the changes in consumer behaviors and preferences brought about by the sudden and rapid spread of COVID-19 and it is easy to see the massive opportunity for e-commerce retailers.Yet in the face of increased competition, larger ad spends, and potential uncertainty in global markets, e-commerce retailers will need to leverage data and innovative digital marketing tools to capitalize on these unique opportunities. In this article, we will explore some of the challenges that e-commerce retailers face—and some of most effective digital marketing tools you can use to solve them.

    E-commerce marketing challenges

    Unfortunately, success in e-commerce marketing is not as simple as running several ads or driving a larger number of visitors to online stores. Rather it is about showing the right advertisement to the right user at the right time and on the right channel. And then there is the fact that you need to do it better than your competitors, provide a superior shopping experience to actually close the deal, and maintain the trust of your customers to keep them coming back.

    Let’s look at some of these challenges in more detail.

    1. Dealing with competition

    With so much money to be made it is not surprising that e-commerce marketing is increasingly cutthroat. In fact, retail is by far the largest digital ad spending vertical, accounting for 21% of the annual total in the U.S. It exceeds the second largest vertical, financial services, by $8.61 billion per year. Online retailers employ a balanced approach, essentially splitting their budgets between display and search ads.

    Depending on the vertical, e-commerce marketers can spend upwards of $40 or $50 per click for a high-value search term. Even if you were able to outspend your competition that does not guarantee that your advertising dollars will lead to sales. Rather if you fail to do the other things well you may quickly find your ad budget exhausted.

    2. Identifying and reaching your target audience

    Many e-commerce ad campaigns fail because they do not identify and reach the correct target audience. A target audience is a group of potential customers that are likely to buy a product or service from you. Your audience generally shares common attributes like geography or demographics.

    It is essential to conduct research at the outset to define your audience. Moreover, you must gather and analyze customer data to refine your target audience over time. For example, by using customer data integration tools you can extract data from all customer interactions into a single platform to provide a holistic view of who your customers are.

    3. The customer experience and conversions

    As more and more customers turn to online shopping, they expect innovative and enjoyable experiences. The customer journey now spans multiple channels. A customer might encounter a product on a social media platform. Research that product on a mobile device. And ultimately purchase it at a later time on a laptop. Omnichannel marketing will become the new e-commerce norm. Again, using customer data integration tools to seamlessly track customer behavior across devices will prove indispensable.   

    E-commerce, more so than other verticals, experiences notoriously low conversion rates. Research shows that the average conversion rate for e-commerce websites in 2020 is 2.86%, significantly lower than the global website conversion rate of 4.31%. A big challenge that e-commerce retailers face is abandoned shopping carts. Some 69.57% of customers leave a website without purchasing the items saved in their carts.

    While a large portion of that number is attributable to customers that are not ready to make a purchase, other factors like poor checkout experiences and a lack of transparency cost retailers countless dollars each year. Digital marketing tools like abandoned cart follow-up emails can play a significant role in recapturing a percentage of these lost sales.

    4. Retaining customers

    Many e-commerce marketers make the mistake of overlooking their current and former customers. Yet research shows that about 1/3 of consumers would rather buy from a website they have bought from previously. In addition, a poor customer experience will overwhelming lead to a customer shopping elsewhere (80% of respondents).

    So, marketers must utilize digital marketing tools that keep customers engaged and coming back, and retailers must provide excellent customer service to avoid the loss of repeat business.

    The Playbook: Choosing the right partners and digital marketing tools

    Retailers are often overwhelmed by the sheer number of e-commerce solutions and vendors out there. It is a matter of finding the ones that work best to help your company meet its unique needs and challenges. For example, when selecting customer data integration tools, it is important that the solution integrates with the third-party tools and platforms that you use.

    E-commerce digital marketing tools

    Taking your e-commerce marketing efforts to the next level is about leveraging the right digital marketing tools. Here are some tools that you can begin using today to drive quality traffic to your website, provide superior customer experiences, and get the most out of your data.

    Chatbots

    Chatbots are a powerful automation solution that ecommerce stores use to streamline workflows and provide excellent customer service. They are powered by artificial intelligence (AI) and can generate leads, provide 24/7 support, and even upsell and cross-sell other products or services.

    When implementing a chatbot solution, it is best to start small. Identify your goals and consider what basic features you want it to have. Choose a chatbot platform that allows you to customize it to meet your needs. It is important to test your chatbot extensively prior to launching it in real-time.

    Even then, expect there to be some issues. Make improvements as needed and continue to monitor your chatbot for areas that can be fine-tuned. Consider adding more complex features and capabilities once you have acquired some experience and eliminated operating issues. 

    Some of our favorite chatbot solutions:

    • Drift
    • Intercom

    Two of our favorite chatbot solutions are Drift and Intercom. Drift provides chatbot tools that are fully customizable and easy to implement. They provide advanced direct targeting features and industry leading customer support. Like Drift, Intercom offers companies simple code-free customization to design bots that meet their unique business needs. Intercom’s chatbot solutions connect directly to existing tech stacks, helping companies to automate their processes.

    Customer Relationship Management Software

    Customer relationship management software (CRM) allows you to manage all your contacts while leveraging data to build comprehensive customer profiles. CRMs help to increase sales through automation and omnichannel communications. They also aid in customer retention since merchants can provide better customer support and regularly engage users across devices.

    Perhaps most importantly, CRMs provide superior customer data management features. With a CRM you can identify common attributes among your customers for use in future marketing campaigns. Moreover, you can segment customers by attributes to provide highly targeted and relevant advertisements that drive sales.

    Our picks for CRM software solutions

    • HubSpot
    • Braze

    Our two favorite CRM software solutions are HubSpot and Braze. HubSpot is well known throughout the digital marketing world. They offer a free version that may include enough features for small business owners. HubSpot has also recently added a new content management system to its platform that gives users even more tools. Braze helps businesses to streamline their communication with their audiences across multiple channels based on factors like user behavior and custom data points.

    Paid Media Marketing Campaigns

    Running paid media marketing campaigns on both search engines and social media are a powerful way to drive high quality traffic to your online store. Marketers can leverage the big data capabilities of platforms like Google and Facebook to deliver highly targeted ads. For example, targeting parameters include demographics as well as psychographic factors like interests, hobbies, and personality types.

    Paid digital marketing ads are also cost-effective and can be tailored to fit any budget. Consider that the average price-per-click across all industries for Facebook ads is just $1.72. The best strategy is to start small. Create a campaign with no more than 15 or so keywords. The reason is that when running test campaigns if you incorporate too many keywords it is difficult to gather meaningful data.

    Run your ad campaign using a limited initial budget to gather data. Identify which keywords are performing best. Exclude keywords that are performing poorly. Identify the attributes of the users clicking on your ads. Use this information to expand your keyword list and to target users in future campaigns.

    Paid media marketing requires continuous data collection and analysis, and adjustments to campaigns to improve results. With customer data integration tools, marketers can analyze data across all channels to drive superior performance.

    Some of our favorite paid media marketing tools

    • Google Adwords
    • Facebook
    • Taboola
    • Outbrain
    • Acquisio

    Google Adwords dominates when it comes to search ads, controlling about 70% of the market. Those new to Adwords can learn how to use the platform through free training courses provided by Google. Facebook is the largest paid social media platform. The platform provides an extensive set of targeting features. Users can learn more about their audience, as well as implement retargeting campaigns, by installing Facebook Pixel on their website.

    Businesses can also use Taboola and Outbrain to advertise to their audience on relevant third party websites. Or a tool like Acquisio to simplify campaign management through artificial intelligence.

    Business Intelligence Dashboards and Data Storage

    A business intelligence dashboard (BI) is a powerful tool that is used to create data visualizations based on key performance indicators (KPI). BI dashboards are fully customizable, allowing ecommerce marketers to display data relevant to their products or services. Effective BI dashboards include an easy to use interface and allow users to integrate data from many different third-party sources.

    The primary goal of a BI dashboard is to take complex data and display it in a way that facilitates informed decision making. For e-commerce marketers, this means viewing the performance of different ads, products, and offers; as well as compiling customer profiles and determining their ROI. Perhaps most importantly, data must be securely stored and accessible by your team at any time and from any location.

    Some of our favorite BI Dashboards:

    • Resonate
    • Google Analytics

    Resonate is a powerful tool that allows users to integrate data from many third-party apps. This data can be used to create highly detailed reports based on the selected metrics. Google Analytics is a free solution that allows users to represent and view data in ways that are easy to understand like charts, lists, graphs, and pie charts. The best part is it is completely free.

    Search Engine Optimization

    Many ecommerce marketers make the mistake of focusing exclusively on paid media marketing strategies to drive traffic to their online stores. While this strategy does offer excellent returns, they are missing out on a significant segment of potential customers that visit stores through organic traffic.

    Search engine optimization (SEO) is a method that digital marketers use to rank well on search engines. Being successful at SEO requires consistency and adhering to certain best practices. For e-commerce marketers, some best practices include:

    • Researching and incorporating high value keywords
    • Offering user-friendly website and landing page designs
    • Incorporating alt text, metatags, and shortened URLs
    • Allowing customer reviews for social proof
    • Having a social media presence
    • Regularly creating original content
    • Being sure to reduce tag bloat

    One of the best ways to increase organic traffic is by writing optimized product descriptions that are easy for users to read and understand. Much like paid forms of advertising, SEO requires the regular collection and analysis of data to implement changes to increase performance.

    In conclusion, use tools to support your analytics

    E-commerce marketers and retailers experience a mix of unique challenges and tremendous opportunities. The list of possible tools to build your marketing stack seems, at times, endless. Seizing the opportunities at your fingertips, however, requires that they consistently reach their target audience at the right time, on the right channel, and using the right message.

    Fortunately, there are some powerful digital marketing tools that provide scalable and cost-effective solutions to significantly grow your business. (And we didn't even touch on data storage, which we've previously written about as a critical component long-term analytics plans.)

    Yet no digital marketing strategy can be successful without access to and the ability to analyze quality data. Customer data integration tools allow companies to centralize data collection and route it to various third-party sources (marketing tools, data storage, etc.).

    Finding one intuitive and easy-to-use platform that integrates with all your preferred tools gives e-commerce marketers access to incredibly powerful insights.

    Dave Paprocki

    Written by Dave Paprocki