Last week Facebook started to roll out Facebook Shops. In the first roll-out retailers will have the possibility to create their own store on the Facebook platform. Potential customers will be able to browse products on Facebook, while the checkout will still happen on the website of the company. However, in a not too far future the whole purchase journey could happen on Facebook/Instagram (inspiration -> product browsing -> checkout -> payment).

Facebook is not alone in making an effort to control larger parts of the purchase journey. Amazon is hiring in Sweden and in April Google announced that it will be free for merchants to sell on Google (starting in the US).

In China (2019) almost 9% of the total estimated e-commerce sales ($723 billion) happened on live streaming e-commerce platforms, such as Taobao. TikTok also launched an in-app shopping feature in August last year.

Offering in-app shopping is most likely not the only effort these players will take to control the full customer journey. Facebook recently acquired GIPHY. One reason for this acquisition might be the data. 50% of Giphy’s traffic comes from Facebook apps already, and after this Facebook will gain knowledge on what GIFs people are sharing in all the other apps that use Giphy’s database, such as Snapchat, TikTok and Zoom. Speaking about Zoom and Facebook/GIPHY: They recently hired the ex-Facebook security chief Alex Stamos and announced the 21st of May: ”To ensure strong privacy protection for the users of GIPHY on Zoom Chat, Zoom is disabling the GIPHY integration on May 21, 2020” …

There is no doubt that the above initiatives and trends will affect the Nordic (and rest of European) e-commerce landscape tremendously.

But what could it mean for web analytics, marketing evaluation and CRO, in particular? Will pure online-players become the new omni-players?

Companies selling products both online and offline, naturally have bigger challenges when it comes to measuring the impact of marketing and tracking across the full customer journey. Omnichannel-players also often have more siloed organizations, with marketing and analytics departments often divided by channel (online/offline). As the e-commerce landscape becomes more fragmented, pure online players will face the same challenges as omni-players. They have had it easy  by having a majority of the relevant behaviour, marketing, and sales data in Google Analytics, but with this change decisions will be needed on how and where to store relevant behaviour, marketing, and sales data going forward. This won’t be an easy task, and it will be interesting to see how pure online-players will build their organisations going forward. We have outlined four challenges that companies are likely to face in the near future:

  1. The measurement of the “traditional sales funnel” will die
    Today most e-commerce put a lot of faith in measurement of the onsite-funnel. Metrics such as product page views, add to cart or checkout – per product or product category are important indications on what products are trending. But how accurate will these signals be if 50% of product page views or add to carts move to another platform? Currently a traditional funnel can look like: multiple ad impressions/clicks->product page view->add to cart->checkout-purchase. Going forward the funnel might look more like: ad interaction ->checkout on-site->purchase on-site or ad interaction ->checkout on 3rp party site->purchase on 3rp party site. Today the inspiration “happens somewhere else” while the last part of the journey happens on-site. However, in the future it might be the opposite: The customers might visit the companies website to gain trust while they are finalizing the purchase in the app they find most convenient to use.   

  2. CRO as a discipline will need to change completely
    The simplified current responsibilities of a marketing department is to drive high quality traffic to the site, while the CRO/Ecommerce team is responsible for converting the traffic. But what happens when a big portion of the online sales happen somewhere else, on a platform (such as Facebook) currently “managed” by the marketing department/agency? Will the marketing department also take over the CRO-responsibility since they have deeper platform competence? Or will the CRO specialist need to broaden her scope/competence? Instead of only focusing on on-site optimisation/experimenting, will more time be needed on, for example feed optimisation?

  3. Evaluation of marketing investments will become (even) harder
    The recent privacy and browser regulations (GDPR, ITP) have already made path based attribution more challenging and unreliable. When the e-commerce landscape gets more fragmented this area will be even more challenging. Simplified, there are two routes going forward. Either make a big effort in enriching the purchase paths, by for example getting as high an identification rate as possible (rely on userId over clientId – cookieId in GA) and send in transactions that happen on other platforms to Google Analytics. Or take the other approach which is to not rely on paths, but instead try to identify which variables have an impact on sales (regression analysis/Marketing mix modelling).

  4. Blurred lines between marketing, sales, influencers and customer service
    Facebooks says Messenger and WhatsApp will be critical components of their e-commerce ecosystem. Customers will be able to contact representatives from the company or even purchase directly in WhatsApp. And in December last year they acquired a live-stream startup. A challenging, but crucial component of the strategy going forward will be for companies to master the synergies between customer service, marketing, influencer activities and CRO.

Strategically, boards will have a difficult decision to make in terms of how to approach owned vs 3rd party channels. There are obvious advantages to owning the customer interactions. We’ve already seen cases on Amazon where businesses relinquish control over their e-commerce by teaching customers to shop from Amazon and find themselves completely dependent on the platform. For some companies, the choice to try out more sales-channels will seem obvious, and we would advise those businesses to have a solid plan in place for how to grow the total number of customers, not just move them from point of purchase A to B.

Matilda Jansson Partner & Head of Specialists