eCommerce – Why digital marketing is important for small business

This blog post is a transcript of the Complete Small Business Show. This is Episode 5 / Series 2 // How To Advertise A Small Business Online – eCommerce – Why digital marketing is important for small business.

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Gus Ryan:  In the late 1990s, Amazon disrupted the book business, and the fear was bricks and mortar shops would soon be forced out of business because of online competition. Throughout the 2000s what we actually saw was retailers moving online to complement their bricks and mortar business. How big is eCommerce in Ireland or the world, or how serious is it a deal these days?

Rob Beirne (Account Director at Wolfgang Digital):  You said a really good phrase there, “to complement” the business.

And I think that’s something that people are coming to realize more and more, is that eCommerce is something that you can use to amplify what you’re already doing.

If you’ve got several bricks and mortar stores, your website’s not going to cannibalize the sales from those stores.

There’s often a perspective out there that the website is almost a competitor to your bricks and mortar stores.

In reality, it’s like a catalogue for your business. You’re allowing people to do a bit of research on what they want to purchase, check the prices, all those kinds of things. And you’re giving people the options so they can continue to go into the store as they always have done, or they can purchase from your online.

We found that the impact on your in-store sales from your website is often incremental. In a lot of cases, in nearly all cases, the website adds to what’s happening in-store.

I had a look back at some of the metrics the IAB released in 2017. So these are the most up to date ad spend metrics we have. And online ad spends that year was just under half a billion euro, which is enormous. That’s just the ad spend.

Gus Ryan:  And that’s for the whole world?

Rob Beirne:  That’s just Ireland.

Gus Ryan: Oh, just Ireland? Okay.

Rob Beirne: Just Ireland.

I think it’s somewhere around 5% of overall advertising spend in Ireland.

And if you think about how much people are spending, half a billion being spent on the ads, that doesn’t bear in mind how much money’s coming back through the sales. You’d hope that if people are doing their jobs right, that that would be a multiple of that half a billion number.

So it’s a massive, massive market in Ireland, and is really important both for making sales online but also driving footfall and sales in-store.

Gus Ryan:  Are some businesses better suited to eCommerce than others?

Rob Beirne:  Yeah, every business is different. Some of them would fit perfectly for eCommerce.

There are things that you have to think about when you’re setting up your eCommerce business. You need to have in-depth knowledge of the logistics of your business.

You know, things like your profit margin; a business with a bigger profit margin can afford to spend a little bit more to generate a sale. What is the average order value, how much it’s going to cost you, how long it’s going to take for you to deliver a product?

These are all really important things to consider. And it’s why we find, for example, businesses that are selling their brand products can often do very well because

1. they’ve got a good profit margin on it because they’re making it themselves
2. there’s nowhere else they can get it.

Some industries will be more competitive than others. Some products will be more competitive than others. All of these things need to be borne in mind.

But I genuinely believe that 95% plus of retailers would benefit from having an eCommerce website, even if that’s just the incremental impact on what’s happening in their stores.

 

Gus Ryan:  So you mentioned retailers there. Are there any specific retailers do better than others? Or any products that do particularly well online?

Rob Beirne:  I work with a quite large electrical retailer, and the example I always like to use is the difference between buying a toaster and buying a TV.

If you’re buying a toaster, you pretty much want to know one thing: is my toaster going to turn bread into toast? That’s all you need.

So people will generally be more than happy to go online, have a look at the toasters that are on offer, pick one that’s in their price range, and get that delivered, easy.

Whereas, if you think of a TV,  that’s a very different product.

People want to be able to touch and feel and have a look at their product before they buy it.

This is ideally going to be the TV they’re going to be looking at for the next 10, 15, 20 years.

So they want to see exactly what the picture quality looks like. What’s the difference between UHD and HD 4K? Am I able to see the difference? How big are 42 inches sets? Is it going to fit into my living room?

And it’s also going to be a much higher value product. So for that reason, people are more likely to want to go and have a look at it.

So not every product is going to be as suitable to eCommerce as all the rest. But again, that’s the kind of situation that I mentioned where you’re very much driving in-store value by having that information on your website and having all of the specs of the TV, the price of the TV, all these kinds of things.

So people can do a little bit of research before they go into your store.

Gus Ryan:  And for businesses that are more service-led then, that don’t have a physical product to sell, what kind of things can they do to drum up business?

Rob Beirne: There’s plenty of things you can do there.

It’s just as important to have that online presence because those are the kind of businesses where there’s a lot of questions, there’s a lot of stages in a decision-making process, all the way up from the first research phases to actually submitting a lead, to then going on to actually become a customer, there are all sorts of different stages there and there’s different information people want to know.

Being able to help people and being able to give people supportive content, being able to answer questions before they’re even asked, can be a really valuable way for you to build up trust in your brand, but not only build up trust, but to put yourself top of mind when someone’s then ready to get in touch, is ready to inquire, and is ready to become a customer.

So it’s not just eCommerce who online can be important for. There’s a lot of other types of business that can benefit from having a well-optimized and up to date website.

Gus Ryan:  So if somebody has products and is thinking about going online, hasn’t built their website yet, could you just give a couple of quick tips on what you’d need to consider if you want to set up an eCommerce business?

Rob Beirne: Absolutely. Yeah.

The first thing you need to be thinking about, and this kind of goes for every business, not just online, but you need to have a very clear idea of your costs and your limitations.

That’s going to impact your whole strategy when you start to go online.

Once you’ve figured that stuff out, the next thing to consider is, what kind of platform am I going to use?

There are all sorts of different eCommerce platforms out there. You can take a look at the likes of Squarespace or Shopify, which are very, very simple to set up, they’re built in such a way that anyone can do it. And so they’re perfect for someone who wants to test the water or just give it a go.

Do a bit of research on that and find one that you think will be a good fit and you find it easy to make changes.

Beyond that then, I’d be looking to set up social media pages, the likes of Twitter, Facebook, Instagram, so you can increase the visibility of your brand.

And then an important part of it is making sure you set up your tracking. Set up a Google Analytics account. That’s a free tool that you can use to set up tracking on your website.

That allows you to do is keep an eye on, how many sales am I getting? Where are the sales coming from? Are they coming from Google? Are they coming from social media? And that allows you to look at areas that need improvement, it allows you to look at where you should be putting any marketing budget that you have.

So if you notice after a month that you’re getting a lot of sales from your Google Ads, for example, and you’re not getting so many sales from your Facebook Ads, you might say, “Okay, well let’s move some of the budgets over to Google. Let’s get a better return on our investment.”

If you can continue to build your return on investment through this kind of optimization process, in the future that should allow you to expand your marketing budget and to expand your marketing channels, so you can start to activate new channels and you can start to test a little bit more.

And as you grow, you start to learn more and more and more. That’s what we’re always trying to do, test and learn, test and learn, test and learn.

The more you can do that, the better. So making sure that you’re set up with tracking, making sure that you know what you’re tracking and that you know what your targets are, what you’re tracking things against, in terms of judging the success of what you’re doing, are all crucial to the success of any eCommerce business.

Gus Ryan:  And you mentioned paid ads or paid promotion. Presumably, if you’re selling something online, you’ll need to run ads to promote this.

Rob Beirne:  Yeah, for new businesses it’s hard to get to where you want to be in terms of, everybody recognizing my brand, and that ‘I’m the one’ that they come to. That’s not the reality for a new business.

In 99 times out of 100, Google Ads will be your most efficient marketing channel, because you’re hitting people while they’re searching. So it’s right down the bottom of that purchase funnel.

These people are a warm audience and are ready to buy.

And then once you get that working, once you get that delivering a good return on your investment, you might, invest some of your profits into the likes of say social media, or email marketing, or any other sort of channel where you can get a bit of coverage.

Google search ads are not going to do much for you in terms of awareness, but social media can.

Different channels have different functions, it’s worth bearing that in mind.

And it comes back to what we were talking about in terms of testing, learning, tracking, and then comparing that to your target metrics.

You want to be specific with your targets as much as you can. And that’ll allow you figure out whether what you’re doing is working or not.

Gus Ryan:  That’s great, Rob. So for companies that are involved in eCommerce, what are the two or three online trends that they should be paying attention to right now?

Rob Beirne:  There’s a couple of things that we’re seeing happen at the moment in the digital space.

One of the big ones is the fact that the digital marketing duopoly, as we like to call it, between Google and Facebook is starting to erode a little bit with Amazon coming into the game. Amazon is making a very big play now to get a little bit of that eCommerce business Google have dominated for so long.

I think we’re going to see eCommerce retailers moving some of their marketing budgets onto Amazon and start selling products through Amazon and the paid Amazon ads over the coming years.

Another interesting one is the attribution. So this is a bit of an obsession for me at the moment because Google is going through a project launching an attribution tool, which is going to help people to see exactly what’s working on their website.

Attribution is the model that shows you the impact or the results of your digital marketing efforts.

Up until now, it’s always been the last click. So whatever the last click on the path to purchase was got all the credit.

Google started to move that a few years ago within their Google Ads platform, allowing us to test out different attribution models. So we could say, the first and the last click get the credit and it’s split evenly.

Or, if you wanted to, all the credit goes to the first click.

They’ve also got data-driven models as well, where their algorithms calculate how much credit goes to each click.

But this has always been platform-specific. We’ve always been able to see it within Google Ads, but it’s only for Google ad clicks.

Where we’re starting to move towards now is, we’re starting to see attribution across different channels. So, someone sees a Facebook ad, they click on that, then they go to Google, they click on a paid ad, and then they go to Google again, they click on an organic listing.

Previously Google analytics would have given all that credit to the organic listing at the end, but now they’re starting to split that up. We’re all going to have a much clearer view of exactly how each element of our marketing mix is affecting the overall results.

Where this gets interesting then is online to offline tracking, or we often call it ROPO, Research Online-Purchase Offline.

The ROPO effect brings us on a full circle to what we were discussing at the start, of the impact your website’s having on your in-store sales.

We as digital marketers are always banging on about how everything we do is trackable, but we don’t know what’s happening when someone sees an ad online and then goes in-store to purchase.

We’re not giving ourselves enough credit in a lot of ways. And this is going to change.

We’ve done some of our studies in Wolfgang and our tests, for every €1 in revenue generated online by your digital marketing campaigns, there could be as much as €6 coming in-store, which is like a massive blind spot. So that’s going to be a big one.

The last trend I just wanted to touch on then, was what we’re calling the no click SERP results.

When someone goes to a search engine like Google and they make a search, I’ve seen data, a really good study from SparkToro, which found that about 40% of searches ended in someone not clicking on anything in 2016. So they didn’t click on an ad and they didn’t click on an organic listing.

But two years later, February 2018, this had grown from 40% to 60%. This is now the majority of people are no longer clicking on any website.

Gus Ryan:  But why not? If they search, how come it doesn’t end up in some sort of a click?

Rob Beirne:  It’s a great question, and the reason is that Google is starting to pull information from websites and deliver this to their users without the user ever needing to go to the website.

There are loads of examples of how you might’ve seen this in the wild yourself without even realizing.

Like one thing I look up often would be football results or fixtures.

If you go to Google now and you type in “Premier League fixtures”, you get all the fixtures. You don’t need to go to the Premier League website to find this information. Google gives it to you.

If you search for a recipe, Google will give that to you in Search Engine Results Page (SERP).

If you’re going on a trip to Galway and you search “guide to Galway”, you’ll get some information about places to visit in Galway in the SERP. Google is starting to pull information from websites and give it to people on the SERP.

So that means that people no longer need to go clicking for what they’re looking for and that this means that fewer clicks are happening.

This is having a transformative effect on SEO as an industry at the moment, in that there’s less opportunity for us to get people to the website organically.

Google has expanded its Google My Business account profiles. Now you can see Google reviews, you can see all sorts of different bits and pieces in there, particularly around location-specific searches.

So for hotels, for example, they have a location score where they’re rating where the hotel is located.

Google is trying to give as much information and keep people on Google pages as much as possible as opposed to sending them to websites, which is kind of causing a little bit of friction, I guess, between the website owners and Google.

It’s going to be a really interesting one to see how that progresses. And it’s going to be a real challenge for website owners in the long run and SEOs in particular.

Gus Ryan:  Okay, great. Rob, thanks a million for your time.

Rob Beirne:  Cheers, Gus.