Ecommerce’s last two years should arguably be measured in dog years, with the pandemic accelerating digital commerce at an incredible clip. But now that in-person shopping is returning, some retailers are noticing a dip in their digital sales, along with the related difficulties of inflation, stock market declines, and supply chain headaches.
I’ve seen this movie before: I’ve worked in technology long enough to have experienced the industry’s ups, the downs, and sideways moves. I was at Amazon in the days when many people questioned whether it had any kind of workable business model. (The answer, then and now: Focus with intensity on serving customers well, and a good deal of the business model fixes itself.)
Today’s retailers face similar uncertainty, unpredictability, and second-guessing. And yet, difficult times can also be generative and productive, and merchants can take steps not just to survive the current climate but also to prepare for the next big ecommerce wave.
1) Conversion is key
For most retailers, the biggest purchasing pain point is still the final step: Checkout. Even in 2022, the average cart abandonment rate in ecommerce is a head-scratching 70 percent. That adds up to a staggering $1 trillion in lost annual revenue!
Millions of merchants create great products, build a captivating web presence, attract customers, and get those customers to do a difficult thing—decide to purchase!—only to have the transaction fall apart at the end. Or to put it simply: Seven out of ten people decide to buy an item—then don’t buy it.
Why does this matter now? At a time of pressure on ad and marketing budgets, companies must tighten up conversion, close the sale, and make every dollar count. Conversion is a fixable problem that’s causing big losses—and now’s the time to focus on it and fix it.
2) Perfect the customer experience
The digital customer experience matters more now than ever. There are few second chances in online shopping, and customers have become accustomed to seamless, fast purchases.
Consider something as simple as checkout speed. At Bolt, we noticed that speeding up checkout even slightly improves conversion in a big way. For instance, Bolt One-Click Checkout is 47 seconds faster than guest checkout—and when we ran the data, we saw a staggering 47 percent conversion lift with Bolt One-Click Checkout shoppers compared to guest shoppers.
Especially in our high-speed internet era, people want what they want when they want it—and not a second longer. Thus, the time to refine your shopper experience is now. But with tech budgets shrinking, how do you do that? For starters, don’t plan an expensive, seemingly endless platform migration. Instead, prioritize “quick wins” and easy integrations that improve customer experience with minimal cost. Those quick fixes and small improvements can add up to a better overall experience.
3) Cut costs (strategically) by choosing flexible partners
Down times are when every tenth of a percentage point matters. If you haven’t already, get a handle on what’s driving costs. For instance, are you stuck in a long-term payment contract with an unfavorable fee structure? Can you negotiate or change providers? These little cost papercuts can add up, and businesses ought to examine their third-party contracts closely.
Another place to act: Fraud. Merchants sometimes treat fraud as a side effect of business—the ante at the table, if you will. But when every dollar counts, fraud costs and chargebacks should be fought head on.
All of that requires flexible partners. As you’re signing new agreements, prioritize technology partners who can be flexible—and who won’t lock you into an onerous fee structure during unpredictable times.
4) Know your shoppers
Repeat customers are essential—in both good times and bad. And yet, many merchants admit that it’s harder than ever to build long-term customer loyalty. With the privacy changes to Apple, Android, and the upcoming “cookie apocalypse,” merchants are struggling to track and know their customers.
Even before these changes, merchants ran into hurdles building store-specific accounts for customers, because of the added friction of account creation. There was a tough trade-off: Close the short-term sale, or build a long-term relationship.
The ideal solution: Account creation on your site, but sans friction. You want shoppers to feel as though they’ve had a seamless experience, but also learn enough about them to drive marketing, targeting, and repeat sales. Find tools that will help do that, and then invest in them so that you can grow with your customers over the long haul.
5) Place strategic bets on innovation
Don’t pause innovation until the economy rebounds. Yes, the next few quarters will be difficult, but as history shows—and as I’ve seen up close—entire industries and technologies can be created during downturns.
Earlier in my career at Amazon, we invested tens of millions during the height of the dot-com bust. Not all of those investments bore fruit—hence the now-famous Barron’s headline “Amazon Dot Bomb”—but many seeds of later Amazon successes were planted at a time when other companies pulled back. That gave Amazon an edge when internet commerce revived.
Now is the time to take strategic bets on innovation. That’s what we’re doing at Bolt, and it’s what’s driven several of our latest moves and acquisitions. As a start-up, we’re used to doing more with less—and we know that down markets present an opportunity to put that scrappiness to the test.
A final thought: In thinking about the future of ecommerce, look at trendlines, not headlines. In 2010, ecommerce accounted for around 4 percent of retail sales; today that number is closer to 13 percent. Not a single indicator suggests that the line will slope downward anytime soon. Retailers are embracing digital tools more, not less; post-pandemic customers have grown more accustomed to digital shopping, not less.
All of which points to a simple, but important, conclusion: Prepare for what’s to come. Right now is the time to take stock of your digital experience,and improve it so that you can take advantage of the next wave of growth. Down times build great businesses—and now’s the time to build.