Looking Back to Get Ahead in the New Year

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As the world has learned to coexist with the pandemic and move towards the ”next normal”, eCommerce growth has begun to stabilize. On a global scale, Insider’s most recent Global eCommerce Forecast predicted that 2021 would end with approximately $4.921 trillion spent online, while spending in the United States peaked at $768 billion, according to a Statista report released in January 2022.

Even with the resurgence of in-person shopping since the height of the pandemic, eCommerce penetration has kept a positive trajectory. McKinsey found that consumer online penetration in October 2021 remained about 30 percent above pre-pandemic levels in the U.S., meaning that the overall exodus to digital storefronts will continue into next year.

With the table thus set for the continued importance of online shopping, it’s an ideal time to start planning your annual eCommerce strategy. Our recommendation is that whether you experienced success in 2021 or need to go back to the drawing board, the road to improvement lies in effectively using the experiences and data of the previous year.

So, where is the best place to start? We recommend that you refer to this article as you begin to analyze your 2021 commerce performance. The following sections encompass key metrics and KPIs that shed insight on your wins and losses over the course of the past year.

Reviewing 2021 performance

Reviewing your 2021 performance can be done relatively quickly if you focus on the right KPIs and customer behaviors at each stage of the buyer’s journey. The framework outlined below identifies some key considerations for surfacing both potential problems and hidden opportunities.

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The Customer Experience

Customers will continue to demand a higher level of personalization and satisfaction throughout each stage of the purchasing process. Whether that includes curated product recommendations or having the ability to complete the shopping experience across multiple channels, it is paramount that companies focus on personalization to retain new and existing customers in an era of shaky brand loyalty. A McKinsey and Retail Industry Leaders Association Report further concluded that 76 percent of consumers switched retailers or changed their shopping behavior during the first year of the pandemic.

Even though tailoring the customer experience is a highly discussed topic, only 15 percent of retailers have fully utilized omnichannel personalization. Therefore, your company is (or could be) positioned to lead the pack by prioritizing personalization when evaluating your past year of performance.

When you evaluate your customer experience, here are some things to consider:

If you answered “No” to any of these questions, you have identified an opportunity to improve customer experience. As you integrate personalization into your upcoming plans for the year, you can learn more about key elements of an engaging customer experience from the following Adobe Commerce blog posts:

Order Fulfillment

The pandemic has uncovered just how much customer expectations around fulfillment have increased; and conversely, how much patience has decreased. A three-month McKinsey study in late 2021 concluded that when faced with ‘out of stock’, only 13 percent of customers will wait for the item to come back in stock, while 70 percent opt to switch brands instead. Given the long-term reality of global supply chain issues, it is crucial that companies adapt to these changes by providing alternative options for customers, or at the very least, remaining transparent when shortages inevitably occur. Forrester emphasizes the importance of centering the customer in their 2022 retail forecast, predicting that brands could lose up to 50 percent of sales on backordered items if they take no action to alert the customer.
Here are a few questions to ask yourself as you evaluate your company’s ability to handle out-of-stock situations:

If you’ve covered these bases, but still receive negative feedback from customers, consider taking a look at your operations to find opportunities to stabilize your supply chain, so that items run out less frequently.

Traffic and Conversions

Traffic and conversions are what separate a good site from the ones that are truly successful. In addition to preparing a well-rounded and fully functional customer experience, you must also ensure that your website is attracting the right visitors and leading to purchases. In the first eight months of 2021, Adobe’s Digital Economy Index found that conversion increased to 4.1 percent on desktop and 1.9 percent on smartphones, which is indicative of a higher quality customer experience. It’s important to look at your traffic and conversions for all of 2021 (and even 2020) as well as during peak seasons and sales events. Here are some KPIs to consider:

In general, pay attention to the extremes at both ends of the spectrum—big successes and big failures—and look at them from as many dimensions as possible. If you end up with a lot of unanswered questions, you may also want to identify new KPIs to track over the current year. You can dig into this topic more by reading any of the following articles:

Infrastructure Performance

How quickly your webstore can load pages and process transactions is critical to both your digital customer experience and your sales. Buyers tend to leave pages that take too long to load, and slow page load speeds can also hurt your Google rankings.

To gauge how well your infrastructure is handling both normal traffic and transaction surges, look at two kinds of metrics:

If your metrics seem OK, but you have received negative feedback from customers, you can also work with your IT and development teams to test your website’s speed. This blog post can also help you ensure your infrastructure is ready.

Sales Events (Peak Season)

When you look at your sales data for 2021, identify any particular days or time periods in which traffic and sales are exceptionally high. Preparing for these sales events (which may also be your peak season) is especially critical because they often represent a very large share of your annual revenues. Examples of sales events include Black Friday and Cyber Monday, Valentine’s Day and Easter for chocolate companies, late spring for swimwear companies, and so on. B2B companies can also have peak seasons that are tied to customers’ fiscal quarters or years.

After you identify these sales events and other planned periods of high traffic, take a deep dive into the strategies that worked—and did not—in 2021 and plan for this year’s biggest selling opportunities right now. This includes defining your eCommerce experience, developing marketing and sales strategies, and identifying KPIs. Review the following posts in Our Peak Season Performance blog series for help getting started:

What If You Sell to Other Businesses?

B2B businesses that sell to wholesalers or via distributors may have some special considerations. As noted above, their sales may not be related to holidays at all, but rather to quarterly budget deadlines and procurement cycles. Also, many businesses have reduced spending in the face of ongoing economic uncertainty, which means they need to find creative ways to increase revenues.

Two digital strategies businesses may want to consider in 2022 are:

Taking Action

As you complete your look back on the previous year, you may see some obvious places to make immediate changes. For example:

We hope you’re feeling inspired to take a closer look at your eCommerce results from 2021, as well as your overall online customer experience. This 360-degree website assessment is a great place to start.