Warren Buffet once stated that you can only see the naked swimmers when the tide turns. The tide could be turning soon, as there are fewer restrictions in some states.
It seems like the pandemic was a ‘golden age” for e-commerce. Last year, consumer retailers have launched curbside pickup to ensure that products reach consumers safely.
What will the “new normal” look like for eCommerce? Cloud believes four major trends will disrupt the landscape and reshape it in 2021. How can you keep momentum in these shifting sands of change?
The Pandemic Upstarts
The U.S. Census Bureau reports that in 2020, applications for employer identification numbers (which are required to start a company) passed 3.2 million. This is up from 2.7 million in the previous year. These could include the next Dollar Shave Club or the next Clubhouse.
There is always competition around the corner. A firm’s unassailable position can be eroded by a new entrant. It’s easy to invest too much in marketing and not properly evaluate performance. However, investing in the future is not worth the effort. VW spent $20bn last year on innovation, while Tesla’s launch cost only one-third. Do not feel like you are playing catch-up. This is your chance to gain a better understanding of your customers and your long-term marketing strategy.
The Roaring Twenties Revisited
All the talk about all shopping going online led to Best Buy seeing its profits rise by $88m in 2020, which allowed it to offer wage hikes to all employees. Your brand’s product can compete with other brands in the same category as the act of living. Professor Nicholas Christakis, a Yale social epidemiologist, believes that we will see a return of the Roaring Twenties.
There is both opportunity and danger, no matter if you are an online-only company or a brick-and-mortar retailer. You should ensure that you have the infrastructure to link your online and offline data. To differentiate, however, you need to find the right way to connect them.
Restrictions, red tape, and regulation
Google had earlier this month announced it would remove all third-party tracking from its properties. Apple just released its new iOS with greatly enhanced consent mechanisms. These changes will have an enormous impact on how we purchase and measure media. We are also seeing major standoffs between Facebook, Apple, Australia, and the CMA, as well as between the CMA, the entire industry, and Google.
I am looking forward to a world in which hundreds of unspecified, nontransparent data points will not be arbitraged to inform targeted targeting. Although this will make our jobs more difficult, I believe it will make us better. It is important to invest in people and not data sets. Great planning and great thinking are what will make media more effective. This will have the added benefit of more money going directly to content creators, which will be good for society and will placate regulators.
Dotcom Bubble 2.0
Goldman Sachs predicts that the US will see a hiring boom in the coming year. This could lead to unemployment dropping to pre-pandemic levels. Joseph Briggs, a Goldman economist says that the reopening of stores, fiscal stimulus, and pent-up savings will drive strong demand growth. This is a very optimistic view considering that neighboring countries in the UK will lose 200,000 jobs this year. We have not even mentioned the political uncertainty that comes with elections. This makes you wonder if Goldman Sachs’ optimistic forecasts are responsible.
As the demand for their products increases online, many businesses will find themselves over-indexed in the performance market. But, the rollercoaster ride will end and people will need to make hard decisions about what they want to buy and how much. People are more inclined to spend on brands they care about. You need to make people care. Not only do you need highly efficient PPC, but also great creativity and experience. You should not invest too much in media and capabilities.
These are just generalizations. Each solution is unique and each category is unique. If you want to keep momentum and not get caught swimming naked, there is a principle that applies: Plan for the future, not today.