Crozier Consulting

Wherever you look, it is impossible not to recognise the massive shift in the way consumers and brands alike are exchanging hard earned money, for goods.

Whilst the rise of e-commerce is something that has been in the making for the last decade, it was during the COVID 19 pandemic (bet you haven’t heard that word in a while) that we saw a seismic change in the way consumers look to purchase products – with almost everything you can imagine shifting to digital. In fact, according to Business Live, the UK’s top 100 retailers saw their online traffic increase by 52% during the pandemic.

Notably, the supermarkets flourished, seeing online grocery sales increase by 94% – and with that a new wave of digital only brands like Getir, came storming onto the scene, actively looking to bring a new level of convenience and customer centricity to the space.

The fashion and beauty vertical also saw a spike in demand of around 32%, as people moved away from bricks and mortar on the high-street, to the virtual realms of online.

And of course, sectors such as homeware saw phenomenal increases in online sales, up to 65% vs pre-pandemic levels, with the UK population discovering a fresh desire to revamp and redecorate their homes…I am sure we all know the feeling having spent months inside!

While the initial lockdown frenzy may have eased, and COVID seemingly a thing of the past, the e-commerce momentum shows no signs of waning. It now accounts for a substantial 31% of all UK retail sales, marking a 39% increase from pre-pandemic levels (Office for National Statistics, 2023). Experts predict this upward trajectory to continue, with e-commerce projected to capture 35-40% of the market by 2030 (eMarketer, 2023).

This digital transformation presents a complex challenge and an unparalleled opportunity for brands; be it shifting to online for the first time, or optimising their current e-commerce capabilities. Those that fail to adapt to the e-commerce landscape risk irrelevance – and we saw that during COVID, when a staggering 89% of retailers admitted their digital infrastructure was ill-prepared for the pandemic-induced surge in online demand (Retail Economics, 2020).

As a result, and something I have witnessed personally, is that we are seeing a significant shift in the investment brands are making into the e-com space. I for one am delighted to see this, because this represents a desire from brands to do things better, and to improve the experience that they have with customers, which can only be a good thing!

But with this increased focus, brings equal risk. A risk that brands, may develop tunnel vision, and take their eye off other critical components of what delivers growth and maintains profitability for them as a business; their broader marketing approach.

And this exact dilemma struck me when working on a project last year, with a well-known retailer, who approached us with a puzzling challenge: Following a bumper period of online sales during COVID, they had invested significant sums of time and money into developing and successfully launching a new commerce platform. However, after 6 months, and significant investment into paid media, the brand in question noticed a significant decline in overall revenue contribution from the e-commerce side of the business.

Naturally, with the new commerce platform being less than a year old, it was easy to assume the decline was a direct impact of these changes. However, we knew there was much more to the story than initially met the eye.

Our initial analysis revealed a 22% year-on-year increase in conversion rates, a positive sign…hoorah!

Hold on, hold on…don’t open the champagne just yet…it wasn’t all hunky dory! What it also pointed out, and something the client had missed, was a concerning 33% drop in website traffic; the first of many warning signs.

To uncover the root cause behind their troubles, we delved deep into the client’s 1st party data, and paid media strategy.

Despite a 20% increase in digital media spend, we uncovered a staggering 7-figure revenue decline across the client’s two primary digital channels. Yes, market factors and post-COVID online sales trends played a role, but they didn’t come close to fully explaining the drastic drop.

Our audit uncovered fundamental flaws in the client’s digital marketing approach.

Notably, reliance on Paid search was at an all-time high, more than double that of their competitor set. Despite this however, search quality score had declined by 43%, CPC’s were in turn soaring and revenue was down by 27%.

Social media fared similarly, with CPMs increasing by 51%, which at first we thought might result in better quality reach and engagement…but a shocking 40% of clicks, failed ever to reach the website.

The root of these issues lay in a combination of basic execution errors and strategic oversights – all of which many of you reading would consider as best-practice hygiene factors. What made this all even more surprising to me, and so disappointing to the client, was the fact that this was all done under the control of a renowned global media agency, which shall of course, to save their blushes, remain nameless.

I felt sorry for the client – they had quite rightly focused on optimising their e-commerce platform, however in doing so, had made the simple but costly mistake of taking their eye off the one thing that fed the e-commerce beast; their paid marketing strategy.

The good news is, whilst this had cost them in the short term, we identified 20+ solutions that would solve these challenges and improve their capability in the digital space, allowing them to achieve more, all whilst spending less. These ranged from low effort, simple in-channel fixes that they could do themselves, through to KPI frameworks, test and learn approaches, as well as simple but effective advances in their cross-channel audience strategy.

What was critical, is that we only suggested things we KNEW they could achieve…and more importantly, things that wouldn’t cost the earth.

So, why am I telling you all this? Well this work highlighted a few things that I think are invaluable to pass on to any growing business. These may seem obvious to some, but it’s worrying, how commonly that they are missed. For simplicity, I think you can break the learnings into four key areas:

1. Keep Your Eye On The Ball(s) – When either rolling out a new commerce platform, or enhancing your current approach, don’t allow yourselves to do so at the expense of your paid and owned media approach. Both components are equally vital ingredients, that feed one another – so don’t take your eye off the ball or lose focus.
   
2. Don’t Underestimate The Value In The Brilliant Basics: In the pursuit of marketing glory, it’s easy to get caught up in the latest trends and shiny new tactics. However, the foundation of any successful digital strategy lies in mastering the basics. A house built on sand will crumble, and a marketing campaign built on shaky fundamentals will meet a similar fate. Having worked across dozens of brands over my career, spanning almost every vertical you can imagine, the ones that have been most successful, have always put this belief front and centre.
   
3. Align Or Decline – Remember The Importance Of A Unified Digital Strategy: Digital transformation is a marathon, not a sprint. Rushing to implement new technology without a comprehensive strategy can lead to wasted resources and suboptimal results. To accelerate your digital maturity, consider a holistic approach that aligns all elements of your business. Rather than deploying your new commerce platform, then thinking about media as an after-thought, (which wastes time and money), Instead think about how you can optimise both at the same time. In doing so, you’ll create a powerful synergy that drives growth and efficiency. Remember, success in the digital world often hinges on a co-ordinated effort.
   
4. Seek Fresh Perspectives, To Achieve Fresh Results – Don’t be afraid to challenge the status quo. In our case study, the client worked with a leading media agency yet faced significant challenges. It was only by seeking an external, unbiased perspective that the root of the problem was uncovered. An objective specialist can bring fresh insights and collaborate effectively with your internal team or existing agency. Remember, a second opinion can be invaluable.
   
   If you’re grappling with similar challenges or suspect your marketing strategy isn’t maximising its potential, Crozier Consulting can help. Let’s discuss how we can accelerate your growth and achieve exceptional results together – GET IN TOUCH BELOW!