4 Challenges for Mid-market Ecommerce in 2018

Changes in shopper behavior, improvements in technology, and pricing policies meant to “protect” small, brick-and-mortar retailers all represent significant challenges to mid-market ecommerce and mid-market omnichannel retail businesses in 2018.

These businesses will need to (a) understand voice search, (b) evaluate investments in voice applications, (c) assess machine-learning implications, and (d) adjust purchasing and marketing practices to address EMAP — electronic manufacturer approved pricing policies.

1. Voice Search

The popularity of voice search will significantly change search engine marketing in the next few years.

Mid-market ecommerce and brick-and-click retailers understand shoppers are increasingly using voice to search the internet and applications, but in 2018, those businesses may not know how to optimize for voice search or market to shoppers though virtual assistants or the voice-enabled internet of things.

Uncertainty — about optimizing for voice search or the role that virtual assistants play in that search — could put mid-market ecommerce retailers at a competitive disadvantage relative to large, well-funded, omnichannel retailers that have been investing in and researching voice search for a few years.

Think about competing with Amazon for shopping-related searches on Alexa.

To face and overcome this challenge, mid-market retailers need to optimize for voice search early in 2018, recognizing the differences in query length, keyword choice, and shopping intent. Natural language and answering questions will become a lot more important for search-engine-optimization success.

It may well be the case merchants will need to add more content to product detail pages or consider optimized page structures.

2. Voice Applications

Closely related to voice search is the increase in the use of voice-enabled and voice-based applications.

Virtual assistants (such as Google Home, Amazon Echo, Microsoft’s Cortana, and Apple’s HomePod) and internet-of-things devices (such as the Apple Watch or an internet-enabled Samsung refrigerator) can do more than just search the internet.

These voice-enabled devices can access applications, too, such as those developed for voice and, in some cases, for shopping.

This combination of a virtual assistant, a voice application, and an enterprise retailer can be hard to beat for customer loyalty and customer experience.

In 2018, mid-market retailers should make significant technology investments, building in-house application development teams capable of creating and deploying applications for virtual assistants and the internet of things.

3. Machine-learning

Machine learning has been a hot topic in 2017, and interest in it will only increase in 2018. The technology has promise for ecommerce and retailing, including:

  • Intelligent, automated customer service,
  • Improved site search,
  • Better, personalized on-site merchandising,
  • Data-driven, market-based pricing,
  • Fraud detection,
  • Automated product ordering and replenishment.
  • Improved business intelligence and predictions.

The challenge with machine learning is not the technology itself or any of its possible uses, but simply that large, enterprise-level retail businesses will be better suited to use machine learning and, therefore, may be able to gain a competitive advantage over mid-market companies.

Here again, these mid-market retail businesses can address this challenge with an investment in application and software development. A second key will be to build on relatively low-cost open source projects.

4. EMAP Restrictions

Mid-market retailers are often most successful when they serve a specific niche market segment. Effectively, this can make these businesses “specialty” retailers.

The problem in 2018 is that the majority of “specialty” retailers may not yet be involved in ecommerce or may not yet be successful at ecommerce.

Instead of improving their online sales capabilities, a number of these brick-and-mortar, specialty retailers have appealed to their suppliers, asking them to “protect” their sales. The result has been the development of so-called EMAP or “electronic manufacturer approved pricing policies.” These policies require retailers to sell products at a higher price online than those same products can be sold for in a physical store.

In the pet food and pet supply industry, as an example, several manufacturers have introduced EMAP policies that will take effect in late 2017 or the beginning of 2018. In one extreme example, a well-known pet food supplier is requiring merchants to sell its products for 30-percent more online than in a physical store.

These policies could make some specialty retailers far less competitive online. To address this challenge, mid-market, multichannel sellers have a few options.

First, push back on manufacturers. EMAP policies are bad for consumers and bad for retailers. It is a step backward.

Second, change suppliers. Look for ecommerce-friendly suppliers instead. There are many good choices.

Third, introduce a membership club for shoppers. Some EMAP policies allow exceptions for shopping clubs or similar business models that require consumers to pay a membership fee, such as charging consumers $1 per year to join, to then save 30 percent on their dog food orders.

Armando Roggio
Armando Roggio
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