Even when economies are looking to go into recession all across the world, it is still possible to hyper-charge growth for your e-commerce business. But you need to rethink your strategies to do so.
We have seen incredible growth in e-commerce since the pandemic shut down physical shopping. But now, we are witnessing a stop to the growth and a whole new plate of challenges in online shopping.
It has been increasingly expensive to buy ads, the conversion rate is down, and the shopping spend by consumers is slowing down, and in some cases even reclining.
New reality new opportunities
But it does not necessarily have to be a bad thing for your webshop.
During the pandemic, the market was ripe for many new stores to grow. Some jumped at the free-for-all party of new customers shopping online. E-commerce took some massive steps in a very short period of time.
In fact, according to McKinsey, we saw a 10-year leap in just 3 months at the beginning of the pandemic in the US. And similar trends were showing across Europe and much of the western world.
This all increased competition in the market. Plenty of new players came to play. And many of the older ones decided to increase their budgets and get in on the action.
However, this has once again shifted. We are seeing blocked ports, supply lines under pressure, record-breaking inflation rates, and a war in Europe. All something that influences the purchasing power and confidence amongst e-commerce shoppers.
So instead of seeing increased competition, we are looking at two groups of stores. Those who fight to survive, and those who look to hyper-charge growth for their business with better data. Meta’s introduction of CAPI might just be the gamechanger in data-driven e-commerce.
How to grow your e-commerce business in a recession:
In order to grow your company in a recession, you need to look inwards and see what you have to work with. Especially your data can prove to be a goldmine of not only knowledge but untapped potential to increase revenue and growth.
That is why you need a data warehouse that can give you a unified view of the business, so you can get the most out of your data.
One way of getting that unified view and the foundation needed to succeed in a recession is through an e-commerce customer data platform (CDP). But before we dive into what it is, and why it is, let us have a look at ways you can grow your business. Especially when others are fighting for survival.
Here are 3 ways to use data to grow your business in a recession:
1: Improve the customer journey
In order to deliver the best experiences for the customer, you need to understand who they are, where they come from, and how they interact with your brand.
A Customer Data Platform can facilitate the comprehension of an ideal customer experience that is expected of you throughout their journey with your brand.
This is possible because a CDP can use data to clarify how users behave and react to interactions on your website and all other channels in relation to your brand.
By having this information at hand, you can make decisions that ensure your e-commerce always adds value to your customers. This means that no matter what stage on the lifecycle they are at with your brand, you can deliver actually what they expect of you.
Luckily CDPs provide information that is hugely relevant to planning and executing experiences that will delight and retain customers.
It also gives you insights into when and how these experiences should occur in the conversion funnel.
2: Smarter segmentation of audiences
Customer Data Platforms have unique advantages in creating customer audiences and segmenting them based on your customer data. With the best quality of data in first-party data, CDPs can make it easier to activate your audiences.
Having a CDP based on first-party data also means you won’t have to rely on cookies. A big topic that will cause another shift in e-commerce in the coming years, as they start to get phased out.
A cookie-free contingency plan is key if you plan to stay efficient on Meta’s platforms as well as on Google with the death of cookies in 2024. And what better way to get that than with a CDP built for a cookieless future?
Without a CDP, marketing teams often work with outdated segments, overspend on advertising, and send non-personal, irrelevant messages.
If you truly want to connect with your customers, you need to personalize your messaging. It starts with having a CDP being able to synthesize raw data into traits, behaviors, and actions of every single customer.
By using artificial intelligence and machine learning, CDPs are ready to go through behavioral, transactional, demographic, and many other types of diverse information to unleash untapped marketing potential.
This allows you to work with segments that are incredibly precise and further boosts your opportunity to use them for marketing efforts such as lookalike audiences on different platforms.
3: Look-alike audiences
If you’re in marketing you have probably used or at least heard about Facebook lookalike audiences. To the non-initiated, Lookalike Audiences are basically telling Meta to find audiences, who are similar to your existing customer segment. This is obviously a powerful tool to broaden your segment and find potential customers.
Lookalike audiences are not a new thing. Facebook first introduced the feature in 2013 and after that, most major ad platforms have made similar features. The way it works is that it takes your best customers and uses an algorithm to find similar people.
Lookalikes are one of the most effective ways to grow your customer base. Especially in recent years, machine learning has become so powerful that data-driven marketing is a must for any modern marketer.
But how do you get the most out of it? 3 General rules to remember are:
- The better data you use lookalikes on, the better the outcome.
- Keep your data up to date when using lookalikes. The best data is the newest and therefore the most precise. Real-time data is worth its weight in gold.
- You have better data than you think. You just need to run it through the right “machinery” to take it to the next level.
Better data with a CDP and CAPI
As we mentioned before, getting that quality data that can help you take advantage of Meta’s features often times comes from a CDP. And for e-commerce, there are only very few options available if you are not a massive enterprise. The reason is that most CDPs are incredibly complex and take a long time to implement.
The biggest players have gone all-in on this. Using millions and millions on a CDP. But the smaller stores are still struggling to find ways to work with a CDP. And they are falling behind, quickly. Especially as the pieces of the cake get smaller, and the bigger players grab larger and larger chunks of the market.
But there are options for those without big budgets who want to boost their e-commerce growth.
Meta has introduced Conversions API (CAPI). And with it is once again possible to create strikingly precise advertisements on channels like Facebook. It helps solve the recent changes to how advertisers receive and process conversion events through first- and third-party data.
You no longer have to shoot blindly when advertising. Like it has been the case since iOS14.5 ran a rampage through the e-commerce world.
By enriching Meta with data from your CDP, you are able to use much more precise insights into your customers, their journey, and how they act on not only your website but all your other data sources too.
This means you will be able to feed this data directly to your Meta channels, and have strikingly precise advertising on their platforms.
I talked to Meta and discussed the role of CDP when it comes to advertising and CAPI. They said:
Meta – on using a CDP with CAPI.
“CAPI uses client’s servers with a wider array of data to create better targeting (eg, your webshop, email system, website, etc). This gives a more holistic and accurate view of the customers’ journey.
By using a CDP, you are able to give Meta even better data through first-party interactions from all your data sources, to build a complete view of the customers in depth. This in turn greatly improves campaign relevance and performance.”
Data infrastructure greatly accelerates e-commerce growth
Luckily there are solutions to solving data infrastructure issues. This includes implementing a CDP and a data infrastructure needed to compete against bigger stores again. And it can come at a fraction of the cost of what the enterprises are doing.
A customer data platform is software that collects, aggregates, and organizes customer data across a huge variety of different touchpoints from each customer. This data can be used by other software systems and for marketing purposes.
CDPs collect, analyze and structure into a persistent, unified customer database that is easily accessible to other systems.
From here a CDP can build customer profiles based on a mix of data from all sorts of sources including your website, transactional systems, email, social media activity, and much more.
These customer profiles allow e-commerce stores to create a personalized experience for each customer, automatically, at scale.
How to use these insights to super-charge e-commerce growth
You have probably heard the saying – “you can not manage what you can not measure”
A Customer Data Platform can present you with a full overview of all the data you need to boost your e-commerce growth.
Think of all those investment shows where contestants stand and pitch their business to a bunch of investors. Investors always ask the same questions about the same metrics and KPIs. And the contestants always respond with estimations and guesses of how it actually is in the business.
They don’t have that full overview of their customer, product, and marketing data. And that means they don’t have a full understanding of how their business is going, where they can improve, and how to measure their e-commerce performance.
Better insights to boost e-commerce growth and revenue
A CDP dashboard such as the one from Custimy gives you exactly that. An overview and easy way to measure how the business is doing. No siloed data, just an actual overview of everything going on, put into a simple to use and easy to understand and act on-
We call it the holistic overview of your business, and it answers questions such as conversation rate and average return rate on products. It also gives an overview of total sales, customer lifetime value, cart abandonment rate, and much more. All so you can measure how the business is performing and everyone in the organization knows what is going on.
From there it is easier to make decisions on where to cut the budget, where to increase it, and how you can provide more value for your customers.
The market demands smarter decisions, you too can take them with a Customer Data Platform.
In Custimy’s CDP you can activate your data, simply by pressing a button. The activation layer makes it super easy to get exactly the data you want, where you want it. Just with a few clicks, you can activate the best data right into Meta.
No need for any complexity, get the most out of CAPI with Custimy.io and supercharge your e-commerce growth.