The Coming Irrelevance of SEO
In business, the longer you have to plan for change, the less disruptive it tends to be. In e-commerce, the most profitable times tend to be finding how to generate sales before the competition figures it out and copies you. The intrepid businesses that identify these opportunities and start embracing them early on will almost certainly be tomorrow's most successful retailers.
Sep 20, 2011 5:00 AM PT
Before planning the next set of revisions to your e-commerce website, you might consider that consumer behavior is changing -- and search engine optimization (SEO) is becoming less important. Thanks to improvements in trust and safety, as well as predictability enhancements that brands like Amazon and eBay have brought to the space, consumers simply aren't turning to Google to purchase products.
Instead, they are going to trusted marketplaces that offer a safe shopping experience. Consumers, especially younger ones, are less likely to go to unfamiliar websites -- preferring sites like Facebook and Yelp, which leverage the knowledge of crowds to influence their decisions. This behavioral trend is starting to translate to e-commerce sites as well, as online shoppers crave predictability and familiarity.
Following are some tips companies should consider when planning their e-commerce strategies over the next several years.
The Changing B2C Marketplace
There are a number of reasons that consumers are shying away from using Google to search for products -- from concerns about privacy and security (identity theft), to unknown customer service levels, to the inability to read impartial reviews and assess accuracy claims.
On the flip side, marketplaces like Amazon offer a consistent user experience, with secure payment methods, a common wallet and address book, an online purchase registry, predictable returns and customer service, reliability ratings for each vendor, and seemingly impartial reviews of products.
When coupling those benefits with Amazon's competitive pricing and nearly limitless selection of products, there become fewer reasons to buy items elsewhere. Business owners need to take steps today to ensure their items are available on each applicable marketplace.
Online retailers like Buy.com, Sears.com and Newegg Mall have almost identical business models to Amazon's -- and many of eBay's changes over the past two years have put it more in line with Amazon's fixed price purchasing experience and consolidation of listings.
Nextag recently launched its own "CPA Marketplace" targeted at advertisers -- and it's reasonable to assume that sites like ShopZilla, PriceGrabber, and Shopping.com (an eBay company) will get into the space. Other players, like Overstock, HSN, Target and Walmart all have programs that allow them to approve vendors that could easily be converted into a marketplace with minimal effort.
On the Google side, the company is making changes to its GoogleBase and Google Checkout platforms. While these changes appear to be targeted to improvements in the mobile shopping experience, it's very likely Google isn't going to sit idly by and let the product-search portion of Google's AdWords advertising revenue slip away.
Google's primary role in an online shopping experience has been to help the consumer locate a site that sells items for which they are searching. Once major retailers like Amazon offer virtually every product sold, however, it nearly eliminates Google's role in the shopping experience. Businesses that are highly dependent on search engine results for their revenue need to start considering alternative marketplace channels in anticipation of these buyer changes.
Tips to Consider
Taking into account the shifting marketplace, there are several factors companies should consider when planning their e-commerce strategies moving forward.
1. Begin using as many marketplaces as possible to get your rankings established.In business, the longer you have to plan for change, the less disruptive it tends to be. In e-commerce, the most profitable times tend to be finding how to generate sales before the competition figures it out and copies you.
Start developing marketplace feedbacks today. If you sell mostly high-priced items, consider looking for some lower-priced items to increase sales and generate more feedback.
2. Get your back office in order.
In the past, it was price, promotions and ranking that drove sales. With a marketplace, reliability and predictability, rather than price alone, drive sales.
3. What is the repeat customer strategy on your website?
If you rely on free SEO-driven leads, you can expect that source to produce less and less each year. Start planning for the drought now by investing in some conservation programs, such as rewards/loyalty and follow-up marketing systems.
4. Start planning sales measurement.
If you don't already have good metrics and dashboards to segment sales per marketplace, it's time to start thinking about it so you aren't running blind. Tools like Google Analytics don't offer any functionality when it comes to marketplaces, so investing in a business intelligence (BI)/decision support system (DSS) that can merge website sales data with sales data from multiple marketplaces will be one of the most important tools to help plan inventory.
5. Remember -- marketplaces are also your competitor.
Many marketplaces, including Amazon, are also retailers at the core. Their profits provide fuel to build out their own warehouses. These marketplaces already have their own business intelligence tools to help them make smart decisions about what inventory to carry. They also have detailed access to your inventory levels and sales data. These retailers have no qualms about selling directly against you; it's just part of business. For this reason, it's important to diversify sales channels as much as possible.
The technical challenges involved in executing a strategy that includes a website with multi-marketplace syndication can be numerous, especially because it is an emerging field where there are no clearly defined rules or best practices.
The intrepid businesses that identify these opportunities and start embracing them early on will almost certainly be tomorrow's most successful retailers.