The world breathed a collective sigh of relief as the 21st century dawned and the much-feared "Y2K bug" proved to be a completely inconsequential, the world of online retail and commerce marched on at break-neck speed.
The 1990's had provided a solid foundation for what online retail was to become. Allowing the online purchase journey - once clumsy and rife with security issues - to become a smooth, secure, and user-friendly process.
A reluctant and fearful public had begun to embrace the online shopping experience, and the possibilities seemed endless. Speculation ran rampant about where the online retail industry was heading and exactly what heights it was actually capable of reaching. As social media sites like Myspace began to proliferate among the coming-of-age digital generation, the internet itself began to reveal it's hand. Many began to look to the future and imagine what wonders this incredible communications medium had in store for us.
But few could've imagined the heights that social media sites and mobile technologies were to reach in the decade to come. The digital revolution was beginning to take shape, building the momentum that was to see it change everything.
The Evolution of the Online Purchase Journey – Part Two: The New Millenium
The New Millenium began at 00:00 on January 1st, 2000…
It was the year that was to give us Mad Cow Disease; Tiger Woods’ first Grand Slam win; the first of approximately 3,509 X-Men films and Coldplay.
Meanwhile, at Amazon.com, a patent for the concept of the “affiliate marketing” process had been submitted to the US patent office.
Affiliate marketing – the process of adding banner advertising to any blog post, article, or website offering an available and/or related product to any internet post/site, including a link to the product manufacturer, wholesaler, or retailer’s website, and offering a commission on any sale resulting from said advertising to the “affiliate” who authored the blog post, or owned the website, which resulted in the sale – would go on to change the path of the online purchase journey to this very day.
Although it should be noted that some small-scale affiliate marketing operations pre-date the Amazon patent, Amazon’s involvement and embracing of the concept launched it into the mainstream and turned blogging and niche website management from what had previously been a hobby into a career and business opportunity few had envisioned.
The birth of affiliate marketing represented a watershed moment in the evolution of online content. Websites which had generated strong followings as internet popularity grew suddenly found themselves in the position to be able to generate an income (in some case quite large incomes) from their labours of love, and many who had not previously felt the need to put content online suddenly wanted in.
The true explosion of the internet was about to begin.
M Night Shyamalan made his last watchable film “Signs”; Nickelback’s “How You Remind Me” was inexplicably named Billboard’s top single and the United States’ “War on Terror” began in earnest in response to the World Trade Centre attacks the previous September.
Meanwhile, in a significant e-commerce power-move, eBay purchased PayPal for $1.5 Billion, bolstering it’s stated mission to create an efficient global online marketplace.
Canadian programmer who’s brainchild “Friendster” launched in the Spring and was to become the first “social media” website to reach the heights of one million users, going on to register over 3 million users within its first few months of being launched.
Despite their huge success, Friendster would never reach the dizzying heights of the social media giants that were to follow (the site peaked at 115 million users in 2008), nor would the site ever manage to become a commerce platform. However, Friendster’s inception and widespread public acceptance hearkened in a new internet era that was to change the way the next generation of users interacted with the world wide web entirely.
The age of Social Media was about to begin.
50 Cent’s “In Da Club” was the song the world heard everywhere it went; Apple launched iTunes; Michael Jackson got arrested; Amazon.com posted its first (of many) annual profit and the internet’s social media era began in earnest.
MySpace.com – a social networking site that allowed its users to build their own mini-websites within its platform, connect and communicate with their friends, and share media like photos and music publicly – built upon the concept originally developed by Friendster and became the blueprint for the web’s social media sites to this day.
Sadly, Myspace – spurred on by greedy and impatient investors wanting to monetise the site as quickly as possible – eventually acquiesced, to its own detriment. Clumsy and awkward banner advertising was added to the site, alienating and annoying its users, diminishing the sites USP and eventually, opening the door for the social media site that was to become the internet’s biggest ever website; Facebook.
“Friends” ended forever; Google’s IPO raised $1.67 Billion; Usher dominated the airwaves and an unlikely cabal of Harvard students was about to make “social media” the biggest digital buzzword of all time.
Facebook, was in its infancy, cast as the unwanted and unloved little brother of the social media champions of the day, Friendster and Myspace. Unlike Friendster and Myspace, however, Facebook’s platform included advertising as a key aspect of its user experience and platform from the beginning. This seemingly small difference would prove to have a major impact in the battle for growth and market share between the social media sites of the first 10 years of the new millennium.
With an audience limited almost exclusively to American college students, Facebook generated its early revenue through “flyers”displayed on its homepage, mostly advertisements for parties and social events targeted at specific college campuses and sold for $10-$40 per day. Although users were unable to interact with Facebook’s ads yet, the “banner” style placement of the ads, alongside (and consistent in appearance with) the rest of Facebook’s homepage, would prove to be a great innovation, as such advertisements were less intrusive and disruptive to the site’s user experience.
Seeing Facebook’s advertising potential with young audiences, a burgeoning online poker website began pondering the possibilities of striking a deal. Affiliate social media banner advertising was about to become a key part of the online purchase journey.
A surprisingly cogent (pre-Kardashian) Kanye West was making musical magic; terrible remakes of King Kong and The War of the Worlds left audiences wondering if Hollywood had lost its damn mind and Facebook’s first affiliate marketing deal was launched in earnest.
Partypoker.net and Facebook came to terms on a deal which would pay the young website, with its quickly growing user base of college-age Americans, $300 for each user who signed up via Facebook and added at least $50 to a gambling account. This process was made possible by making Facebook’s banner ads interactive (clickable) for the first time, linking the sites users directly with partypoker.net’s website. As the partnership began to pay significant dividends on both sides, providing partypoker.net with 200 new users each month, and Facebook with $60,000 in monthly affiliate income, other advertisers began to take notice.
Major brands like Victoria’s secret and Apple quickly jumped on the Facebook affiliate marketing banner ad trend, and by year’s end Facebook generated almost $10 million in affiliate marketing income to go with it’s now 5 million strong user base.
But Facebook wasn’t alone. Across the internet, affiliate marketing schemes and clickable banner advertising became the digital marketing strategy of choice, generating an internet renaissance of creative websites and social networks. Video sharing site YouTube entered the fray, and began, for the first time ever, to compete with Television as the spare time black hole of choice among the western world’s young citizens.
By 2006, Twitter had arrived on the scene, and global affiliate marketing revenues had reached $6.5 billion. The internet retail marketplace was booming, and the global proliferation of internet technology had created a smooth and seamless online purchase journey that made online shopping a ubiquitous part of everyday life.
But another development was about to turn the e-commerce industry, and indeed the internet itself, on its head once more.
The Simpsons finally made a movie; Rihanna became a megastar; construction of the New Wembley Stadium was finally completed and a new product from digital giant Apple was about to change the world.
Although internet access via mobile phone had been in existence for some time, mobile online interfaces had remained clumsy, slow, and inefficient, keeping the public largely restricted to their desktop computers for most of their internet use. With the advent of the iPhone and its touchscreen technology, however, a massive public shift towards mobile internet use moved from a lofty technological goal to a clear inevitability in an instant.
As global mobile internet use exploded over the next several years, responsive design (design which renders clearly and functionally on any size of screen, be it desktop or mobile) occupied the minds of every company doing business online.
By 2009, Facebook, which had embraced and optimised for mobile internet from an early stage, claimed its rightful place atop the social media heap, and Facebook advertising completed its transition from “nice to have” to “online retail essential”.
This transition cleared the path for other social networks like Twitter and YouTube – which had themselves built huge user bases in the intervening years – to develop and refine their own advertising and marketing products, which both did gleefully (successfully in the case of YouTube, clumsily in the case of Twitter).
In addition, growing global popularity of the “smartphone” and the development of touchscreen technology gave birth to a whole new industry – The App. Company apps offered new and interesting ways for customers to interact with brands (and vise versa), but sadly, retail companies once again failed for the better part of 5 years, to capitalise on the app’s potential.
And so, in an increasingly crowded online (and now mobile) retail marketplace, with an audience who’s attention span was getting shorter by the day and social media platforms that were beginning to claw back control over how advertisers made use of their valuable advertising space, things were beginning to get a bit stale.
Channing Tatum delighted audiences the world over in Magic Mike; “Gagnam Style” struck viral gold, becoming the most watched Youtube video of all time; Barack Obama became America’s first Black President (for the second time) and Facebook launched “Mobile Ads”.
These mobile ads appeared in news-feeds and appeared almost identical to all other content posted on the website. This was necessitated by the fact that the Facebook’s users had begun to interact less frequently with the site’s traditional banner advertising. Why? Because doing so was too disruptive to the user experience, since being redirected to an advertiser’s website for 30 seconds had become an intolerable intrusion to online life. Other social media sites quickly followed suit.
As global online retail sales topped the $500 million mark for the first time ever, many brands paused and enjoyed a well-deserved pat on the back. “Consumer Durables” items like designer clothing, home electronics, gadgets, and collectibles were now moving online in massive numbers.
As online retail in these sectors continued to trend upwards, traditional FMCG (Fast Moving Consumer Goods) brands their retail counterparts (like large supermarket chains) moved to build and optimise online shopping as a key aspect of their marketing strategies moving forward.
But for brands and retailers in the FMCG space, the move to digital retail and a practical online purchase journey would prove to be a bumpier ride than it had been for the consumer durables crowd.
Online videos of a meteor exploding near Chelyabinsk in Russia (which injured nearly 1,500 people) went viral; Pharell Williams leveraged his fame into massively popular collaborations with Daft Punk and Robin Thicke; “The Wolf of Wall Street” gave us all several new reasons to dislike the mega rich; and somewhere in Scotland a group of tech wizards was preparing to lead the FMCG online purchase journey to the promised land.
Large supermarket chains, whose clunky online shopping experiences were failing to generate user interest and revenues to match those of their consumer durables counterparts, struggled in their role as middle man between FMCG’s brands and their customers.
The logistical and practical benefits of allowing retailers to sell FMCG products, coupled with the seemingly impossible concept of FMCG brands selling direct to consumers, kept the FMCG brand/big-box retailer relationship intact, however clunky and inefficient such processes may have been.
As Amazon Fresh began moving slowly to bring it’s vast online retail knowledge to bear on the world of online grocery and FMCG, (Amazon completed a 5 year beta testing phase in Washington State and Moved into California in June of 2013) the gaping hole in online purchase journey for FMCG brands and retailers became one which needed to be filled as quickly as possible.
Meanwhile in Scotland, Digital advertising specialist Richard Kelly, frustrated with the inefficiencies in the FMCG online purchase journey, launched Adimo. Kelly’s third party online purchase journey optimisation tool promised to streamline existing purchase journey processes within the FMCG sector and open doors to new, innovative approaches to help FMCG brands market themselves more effectively online.
The FMCG brands’ valuable customer purchase data, once strictly the domain of retailers (and often sold back to brands by those same retailers at a premium) could now be accessed and analysed by those same brands at their convenience.
While the retailers would maintain their role as middleman in FMCG online transactions, the FMCG brands could now slide into the driver’s seat and take back control of their online marketing and purchase journey destiny.
Adele’s “Hello” (pronounced “hallo” for some reason) reminded the world that calling one’s exes years after the relationship ends is never advisable; the latest Star Wars film attained new and strange merchandising heights (Star Wars oranges, anyone?)
and the Pampers corporation was getting ready to sell a whole lot of nappies in one week.
Pampers Wonder Week, an online and in-store retail collaboration between Pampers and Adimo, combined the best aspects of smartphone technologies, company apps, and rewards programs with a seamless online purchase journey to move diapers in bulk on a large scale in an extremely successful cross-channel marketing promotion.
While this collaboration was certainly not the first (or last) such campaign to combine the key elements included, this campaign, and 2015 as a whole, saw the online purchase journey and digital advertising itself, take a huge step forward.
FMCG brands, previously mired in the old approach of planting a seed in a customer’s mind via advertising, then hoping that that seed would germinate the next time that customer went shopping, was left behind in the dust. The link between digital ads and the revenue they generated, previously so difficult for FMCG brands to track, could now be analysed and optimised in real time
This development hearkened in a new era of slick online advertising, where online purchases could be made anytime, anywhere, and with minimal user experience disruption. Online FMCG revenue began trending up in earnest at last.
And what is left to the world of eCommerce and digital marketing in this exciting new era? Opportunity.
For those willing to embrace the new and improved online purchase journey, eliminate a stages of the sales funnel, and try something new, the sky is the limit. In all likelihood we stand at the precipice of record-setting online campaigns and intriguing new approaches to digital advertising and online retail marketing strategies.
Brands in both the Consumer Durables and FMCG spheres are beginning to wake up to the possibilities, and to understand what third party tech has to offer in terms of helping them convert prospects and generate new revenue streams.
The only question from here is which ones will grab the brass ring and which ones will be left struggling to catch up.