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Online Selling Trends 2014: Challenges and Opportunities

Each January we ask a panel of industry experts about the challenges and opportunities they see for online sellers in the New Year. This year, we began by asking some online sellers for their perspective – links to the first three installments follow at the end of today’s article.

The Online Selling Trends feature goes beyond the usual sound bites and promotion and is an opportunity to hear thoughtful answers about issues facing online sellers.

Today, we start off with an introduction to the members of this year’s panel with a description of what they do, followed by their answers to the questions, “What are the biggest challenges facing online sellers going into the New Year?” and “What are the biggest opportunities for online sellers?”

In future installments we’ll hear what the panel has to say about marketing tactics, Amazon – friend or foe, Google PLAs, and free shipping or no free shipping?

An Introduction to Panelists

GoDaddy SVP of Productivity Apps Steven Aldrich 
I lead Productivity Applications for GoDaddy. We have over 12 million customers and are tirelessly working to tilt the global economy toward small business. Our services empower people to easily start, confidently grow and successfully run their own ventures.

I have been an entrepreneur multiple times, despite advice from my Dad, a professor who researches start-ups who told me that the likelihood of success was low. Outside of GoDaddy, Steven is President of the Board of the Bay Area Glass Institute (BAGI.org), a non-profit glass studio, and enjoys spending time with Allison and their son, Jackson, at many sports and arts events.

Endicia General Manager Amine Khechfe
As general manager and co-founder of Endicia, I spend my days thinking about how our technologies can make ecommerce and shipping easier for our customers. Our goal is to make the shipping portion less complicated so customers can focus on growing their business. This includes working with our team to ensure we continually innovate our shipping software.

I also spend a great deal of time connecting with customers to discuss their shipping challenges and successes. Their feedback influences a lot of our software innovations, and I love being able to troubleshoot and offer advice that helps streamline the shipping experience.

StellaService CEO Jordy Leiser 
StellaService is dedicated to creating a world with better customer service – helping businesses achieve it and consumers find it. We’re the first and only independent provider of customer service ratings and syndicated customer service performance data for online retailers. Via a national network of full-time digital mystery shoppers, StellaService tests the customer service and fulfillment abilities of businesses on a daily basis.

This empirical, unbiased data powers Stella Metrics, the only platform for monitoring, benchmarking and improving the end-to-end service experience of online retailers across scores of operational metrics in key areas such as chat, email, phone, social media and fulfillment. The largest retailers use StellaService data to make smarter business decisions.

Challenges and Opportunities in the Year Ahead

EcommerceBytes: What are the biggest challenges facing online sellers going into the New Year?

GoDaddy SVP of Productivity Apps Steven Aldrich: Continued consolidation of buyers to the biggest marketplaces Amazon and eBay – they were the top two ecommerce destinations during the holiday shopping period. To grow, it will be necessary to have a presence on one of those sites or put significant effort to create sustainable traffic to your own online presence.

Mobile product search will continue to grow making a mobile-enabled website critical to get found. This requires additional investment in your website and ecommerce infrastructure to optimize the display of your products on a mobile device and make purchasing easy.

The increasing speed of delivery for online purchases – moving from next day to same day – is raising the bar on customer expectations. Amazon continues its investment in distribution centers which are now within 100 miles of more than half of the 20 largest cities in the US, eBay Now is in four major cities, and Google is testing “Google Express” in the San Francisco Bay Area.

Endicia General Manager Amine Khechfe: Last year, I talked about marketplaces and how important it is for online sellers to gain visibility and differentiate themselves on these big platforms. This year, I think we are going to see marketplaces take over.

More and more online sellers are looking to expand their audience and grow their business, and one of the best-known ways is through marketplaces. But it doesn’t come without challenges – one being the ability to stay true to who you are as a business, and another being the need to continually offer unique products or differentiated service to successfully compete. I think we are going to see a lot on marketplaces (and perhaps some frustration from merchants) in 2014.

Another trend we’re seeing is that traditional retailers are flexing their ecommerce muscle. There are increasingly more big-box retailers offering free shipping and in-store returns for online orders, which I think can turn into a threat for online sellers. Many customers find it easier to drop by the mall to return a product than contact a seller for a return shipping label.

As a result, online sellers should become more flexible and streamlined with their return policies – maybe proactively offer return shipping labels with all orders sent out.

In the shipping world, we are going to see greater demand for next-day delivery – maybe even same-day – which can turn into a challenge if online sellers do not have the correct resources in place.

StellaService CEO Jordy Leiser: We have a poster hanging in our office that reads “Great customer service is simple. Be fast, friendly and helpful.” And, that’s the challenge. Be fast, friendly and helpful.

We understand that the concept is simple, while the execution is not. This is why we deliver to our clients true business performance data that enables them to understand both the speed and quality of their customer service. What’s more, we provide the same data on their competitors, which gives them a reliable benchmark for setting internal goals.

Retailers must pick those operational metrics that need improvement, track them diligently and implement changes that will result in happy customers.

EcommerceBytes: What are the biggest opportunities for online sellers?

GoDaddy SVP of Productivity Apps Steven Aldrich: Ecommerce volume continues to grow at more than 3X the rate of retail sales but still only represent 6% of the total. So there is lots of growth ahead for online sellers. The basic formula for retail success has not changed for centuries: unique product offering, clear brand and pricing alignment (low cost/value vs luxury/premium good), great customer service, and location, location, location. These apply equally to online and off-line retailers.

I don’t claim to know enough to spot the next big trend, but here are three areas to explore:

1) Excitement has been building among consumers about handmade goods. Etsy crossed $1B in sales in 2013, crowd funding sites have been boosted by several high-profile projects, and a growing number of workshops like TechShop that provide access to equipment to build unique/custom products. Do you have custom or handmade products today and are you touting the story of their production? Can you add custom or handmade goods to your inventory or create them?

2) If you have both an online presence and a physical location, use 2014 to test services that differentiate your products from others. There are new ways to use the growth in local search to get found. We’ve seen a big jump in interest in discovery marketing from a company we’ve bought called Locu. Can you offer hands-on training at your location for new customers? What events can you promote online and host to bring prospects and customers into the store?

3) The rise of image-driven marketing is another way to promote your products. Instagram, Pinterest, and even Facebook provide a mix of organic and paid search options and can make a difference in your business by finding new buyers.

Endicia General Manager Amine Khechfe: I see cross-border trade as one of the most exciting trends of 2014. We will see an easing of complexity, especially between the United States and Canada, which will simplify international commerce (including returns) and benefit companies with business in both countries.

Another area where we are seeing a lot of opportunity is in mobile. Take this past holiday season – tablet-based sales grew 3% while phone-based sales grew 6% over 2012. It’s time for online sellers to look into optimizing their storefront for the mobile shopping experience.

StellaService CEO Jordy Leiser: Consumers are realizing that the product they want is available at many retailers and all of those retailers are price matching. So, with price and selection being equal, there has to be a differentiator.

We believe that differentiator is customer service.

Let’s be honest, Amazon Prime has set consumer expectations. We all want orders to arrive in two days. Delivery speed is just one metric, there are hundreds more that are an opportunity for retailers to stand out in crowded field of competitors by going above and beyond with customer service.

See Part One, “Rising Cost of Shipping Presents Challenge”; Part Two, “Standing Out in the Crowd,” and Part Three, “Fakes Spell Trouble for Vintage Goods.”

And stay tuned for the next installment of Online Selling Trends 2014.

Ina Steiner on EmailIna Steiner on LinkedinIna Steiner on Twitter
Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.