Online commerce, in line with people's e-commerce habits, has changed dramatically during the pandemic. While some have had a windfall, others have met with a setback. On E-commerce Day 2022, INEVO gathered some of the best Norwegian online shops to find out what is going to be growing online in the future, after two years of pandemic. These are the challenges and opportunities we're looking at.
Data usage
Access to data is fundamental to success with your online store. Automation and machine learning have come to be, and the importance of good data is increasing. If you use the data in a good way, it can be an important competitive advantage. If you don't use the data you're sitting on, it'll be worthless.
Vadim Bjarkum from Online trade group describes each data point we see today as a small piece of a larger puzzle. These pieces must be put into system within the organisation to see the larger picture and create value. A common feature of online trading partners on E-commerce Day is that the decisions they make in the organisation are data-driven. Whether the decisions you make are good will depend on the data you input, the measurement you do in the process and the ability of your business to test and learn fast. Here, inspiration can be taken from the Online Trading Group, which has structured their data by breaking down the business’s overall objectives and all costs and revenues to KPIs that can be measured across the business. In addition, if you are good at monitoring and measuring along the way, you can more easily allocate resources where you need to do so when a finding occurs.
On the other hand, the use of data also has some legal aspects to address challenges. Digital marketing will always pose legal risks, but the problem is that many people are not aware of the risks they take, according to lawyer and partner, Vebjørn Søndersred i The law firm Ræder. The truth is, if you were to follow the law of point and dot, you would be out of competition. Several of the American services that many online traders are using today are considered illegal for the processing of Europeans’ data. In order to be competitive, risks should be taken, but it is important to understand what the legal risk involves. Having said that, the guidelines are becoming increasingly stricter, and it may be advisable to get involved in the law to ensure that they are against any legal surprises in the future.
Testing and learning
Another challenge when it comes to using data is whether the data you use gives a true picture of the decisions you make. With ever-ending legal constraints and out-of-date units of measurement, the quality of the data is getting worse. This requires the enterprise to be adaptive and has a culture that allows the employees to try and fail to prevent decisions being taken in the blind.
The next generation of consumers are impatient and require things to happen quickly, which in particular Victoria Hellesø i Foodra Market has been recognised during the pandemic with the flowering of fast-traded food. This change in consumption patterns also makes businesses depend on frequent testing and adaptation in the future and on rapid and continuous action.
Either you work with cro, business surveys or advertising, you're dependent on testing to make computer-driven decisions, especially in the future. This will include the rapid identification of improvement areas and deviations, planning and prioritizing based on data and the overall objectives of the enterprise, and conducting tests and reporting results. If the business is unable to adapt and change quickly, this will be much more expensive in length than failure from time to time.
«“You can’t improvise what you can’t mean”»
This need for testing and monitoring is also increasing the desire to possess as much as possible the value chain and customer travel. Both to obtain sufficient data from each stage of the establishment, but also to prevent en route bottlenecks and to be able to adapt rapidly to consumer requirements.
Internationalisation
Norway is a very small market in international context. With increasing numbers of international players entering the market, competition is only becoming more and more intense between players. However, online commerce has no limitations if the focus is turned globally. According to Kenneth Dreyer of We Are Brands you have every prerequisite for success abroad if you are able to make success in Norway.
The challenges, however, are mainly about differences between countries. You have to adapt to what consumers in the country are used to. Ardalan Fadai from Nets said that simple things like payment solutions and delivery options are easily and easily overlooked, but can dramatically vary between countries (even in the Nordic countries). Now that borders have opened up and many people live more or less normally, it is a great opportunity for Norwegian online traders to turn the focus globally for further scaling of their online store.
Pricing
During the pandemic, consumers have become more price conscious and want to get the most value for their money. In other words, the pandemic has made consumers more rational, at least in accordance with them. On the other hand, Nets shows its “Norwegian e-commerce report for 2021” there are differences between what consumers themselves say and their actual behaviour. Although recent online trade has been slowed down, it doesn't necessarily mean that people are doing less.
Consumers are irrational, which means that good strategies are needed to communicate psychological value to customers. This is a challenge among Norwegian online shops, where more people have ended up in a vicious circle distributing discount codes to generate sales. Norwegian online shops need to be better in the future to set prices that actually communicate customer value rather than assume that the whole market is always price-conscious and rational.
In addition, not all online stores are as good at keeping within the law when it comes to price marketing, according to Vebjørn Sønders red. This includes the requirement to document claims, real pre-price, information on the size of the discount, the basis for the refusal, etc. If you still need to use discount codes as a tool, it is a good idea to get into Consumer supervision guidance on price marketing.
Summary
The future web-trader has taken a footing in the international market and has created a culture of fast learning and testing that bases its decisions on well-structured data across the business. They own large parts of both the value chain and their customer travel, which make them adaptable to making changes in the course and meeting market demand by focusing on customer value rather than economic benefits. They also take risks, but are fully aware of the legal risks they take.