By Jonny Steel, Payoneer
Consumer spending over Black Friday and Cyber Monday in the U.S. totaled more than $4 billion in 2014 — and continued at increased levels throughout the holiday season. While many retailers rely on the holiday shopping season to drive sales, there are endless opportunities to maximize sales throughout the year. And big-name retailers aren’t the only ones shoppers are turning to.
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Online marketplaces such as Amazon, eBay and more recently emerging sites like Wish enable small e-Tailers around the world to profit from the increase in online spending. There are more than two million third-party vendors selling on Amazon. And while Amazon saw an approximate 20% growth of year-over-year net sales in Q4 2013, the sales growth of third-party sellers over the same time period averaged between 40% and 50%.
To help e-Tailers implement strategies that will generate a boost in sales throughout 2015, Payoneer has outlined several key trends specific to e-Commerce and online marketplaces:
- International Consumer Potential Is Growing:
On Nov. 11, 2014, Singles’ Day in China, online retail giant Alibaba reported $9.3 billion in sales in a period of just 24 hours — more than was spent during the entirety of Cyber Week in the United States. The economic impact of international shoppers is crystal clear, especially in the Asia-Pacific region. The Internet has created an opportunity whereby pretty much anyone anywhere in the world can sell to someone else on the other side of the globe. The combined power of online marketplaces and technologies such as Payoneer’s cross-border payments platform enable even the smallest seller in places like China, Japan, South Korea or Australia to easily reach customers across the US and Europe.
Tapping into the global market also opens up the opportunity to reach international buyers during their shopping holidays post-New Year. For instance, Russia will celebrate the holiday season into the New Year with key shopping days including Men’s Day in February and Women’s Day in March. China will also be celebrating the Chinese New Year in February. Thinking globally can help small online merchants continue momentum well after the U.S. holiday season has ended. In addition, we’re seeing a trend of local holidays spreading internationally. Not long ago Black Friday/Cyber Monday was only found in the U.S. as part of the Thanksgiving festivities. More recently, the shopping day and special deals have spread to markets like the UK even though Thanksgiving is not marked there. Likewise, Single’s Day is gaining momentum outside of China and is likely to grow significantly worldwide in 2015.
- Average Online Order Value Is Shrinking:
Online shopping has drastically lowered the cost of physical goods around the world, and this downward pricing pressure on everything from apparel to electronics will continue in 2015. While Singles’ Day brought in an unprecedented volume of sales, the average Alibaba order was only $33.50. Shoppers have come to expect dramatic price reductions and deals, and smartphones in hand mean those deals are only a couple taps away. To stay competitive, e-Tailers should ensure they are remaining visible with discounts.
In the weeks of post-holiday shopping, marketplace sellers should create a sense of urgency around offers, such as, “Today only, buy two items for the price of one” or “Order by 5 p.m. and receive free two-day shipping.”
During the New Year, small merchants can extend an individual touch with personalized “thank you” emails to customers who purchased their items over the holidays and offer exclusive promotions or targeted offers based on their previous purchases. E-Tailers can also extend the reach by offering referral codes to reward customers who spread the word about their products. Companies like Dropbox and Facebook have illustrated the incredible power of word-of-mouth generated growth, and e-Tailers need to leverage the power of both mainstream and niche social media networks to encourage sharing.
- Discovery Shopping Pushes More Consumers To Mobile:
Shoppers are increasingly taking to mobile marketplaces to discover new products and find deals, and this trend will continue in 2015. Between Wish, Fancy and Wanelo, last-minute shoppers will turn to these mobile marketplaces to find personalized, unique items that they can purchase with one tap.
For example, Wish uses matching technology to deliver a visually engaging, entertaining and individualized shopping experience, which drives a very high engagement rate among its users; repeat customers make up approximately half of all purchases. E-Tailers on these mobile marketplaces are likely to see repeat customers following the holiday season and throughout the year. In December, Payoneer began facilitating payouts for merchant suppliers on Wish, enabling them to instantly receive payments directly to their Payoneer accounts and have multiple ways to withdraw funds in local currencies.
- High Shipping Costs Are A Deal Breaker:
According to a survey released this year by UPS and comScore, half of consumers would choose a slower transit time if it meant they received free shipping. Free shipping is incredibly important to today’s online shoppers, but luckily many online marketplaces have improved their shipping networks. For example, Amazon now offers “Fulfillment by Amazon,” a network of advanced fulfillment centers with free shipping.
E-Tailers selling through online marketplaces should ensure they are present on platforms that offer free shipping and quick fulfillment. The most important thing to remember as an e-Tailer is that if you ensure quality service and speed of delivery, first-time customers are far more likely to become repeat customers in the coming year.
The New Year offers countless opportunities for independent e-Tailers to capitalize on the meteoric rise of e-Commerce sales. By adapting to key trends such as international consumers and associated holidays, shoppers’ tendency to spend less, mobile shopping and preferences toward free shipping, marketplace e-Tailers can position themselves for success throughout 2015.
