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[PODCAST] IRCE 2016: ‘An Opportunity to Think About What’s Next’

Rob DePersia

Few people know e-commerce like Zak Stambor, Online Marketing Editor at Internet Retailer magazine. While reporting the latest industry news, Zak speaks with a wide assortment of retailers and marketers — providing him with a truly holistic understanding of this exciting space.

At next month’s Internet Retailer Conference & Exhibition (IRCE) in Chicago, Zak is presenting “The State of E-Commerce Search,” which kicks off the Google & You workshop. IRCE is one of e-commerce’s biggest events, and Sidecar will also be there, dispensing product advertising tips and hosting the Google Shopping Live event with our partners from Google.

Last week, Zak joined me for a pre-IRCE podcast interview. I picked his brain about some of the hottest topics in e-commerce today.

We discussed IRCE 2016, the ever-changing Google SERP, tactics for search success, and why mobile is still a challenge after all these years. Our chat is the perfect primer for IRCE. If you’re not going, check it out anyway for a quick survey of today’s e-commerce terrain.

Listen to the full podcast here or read the transcript (edited for brevity and clarity) below. And stay tuned to our blog for more updates on IRCE!

0:35 What topics will dominate the conversation at IRCE this year?

5:55 How has Google evolved over the years and what have e-commerce retailers done to adapt?

8:40 What tactics and strategies are common among the e-commerce retailers that are most successful on Google today?

11:41 Looking ahead, what new opportunities in Google search do you see on the horizon?

15:10 How have consumers’ expectations and behaviors around e-commerce changed over the last few years?

17:30 What are you looking forward to the most about IRCE 2016?

Transcript

Rob DePersia: To start, could you talk a little bit about the IRCE conference and the topics you see dominating the conversation at this year’s event?

Zak Stambor: Yeah, so anyone who doesn’t know, IRCE is a mammoth show focused all around e-commerce every year that takes place here in Chicago, where Internet Retailer is based.

And it’s a funny thing, because every year, we end up talking about a lot of the same companies: Google, Facebook, Amazon. But every year, there’s a slightly different context in which we talk about these companies.

So for instance, there’s Facebook. In terms of talking about Facebook, you have to look at the broader company of Facebook, as well as the social network itself. So, that’s Facebook, Instagram, Messenger, Audience Network, and so on …

So with each of those platforms, Facebook has been really aggressive in seeking to crack the e-commerce puzzle, so to speak.

Just last week, Facebook announced new targeting features in custom audiences that let retailers target consumers based on things like how many times they engage in a specific behavior, like visiting a category page on a retailer’s website.

We end up talking about a lot of the same companies: Google, Facebook, Amazon. But every year, there’s a slightly different context in which we talk about these companies.

At the same time that they rolled that out, [Facebook] extended the reach of dynamic ads to Instagram.

So that’s Facebook, so much stuff going on there.

Or, we could talk about Google for a minute. Google’s just constantly adding new advertising options, new advertising features, changing the way advertising operates on its platform.

So for instance, in the third quarter, it added a text ad slot to the top of mobile search results, and it enlarged the size of Product Listing Ads. In December, it added Product Listing Ads to Google image search results on smartphones.

And then there’s desktop search, which still accounts for 58% of impressions. Google, in the first quarter in February, removed text ads from the right side of desktop search results pages. This is another thing that retailers, and marketers in particular, have to think about and adjust for.

And finally, the third company that we’re always talking about is the most dominant e-commerce company around, and that’s Amazon, which is just constantly pushing into new areas that force other retailers to adjust in some way.

IRCE gives you an opportunity to think about what’s next, what’s happened in the past year, and what does that mean for my business?

Something that I think that is particularly interesting is what it’s been doing with Amazon Echo and its Alexa voice-based search program. And what can that mean for other retailers?

One retailer in particular that has worked with Amazon to enable consumers to buy via Alexa is 1-800-Flowers. It’s allowing consumers to buy flowers through their Echo device.

And I think it’s something that’s just really new and interesting, and something that everyone needs to be thinking about in terms of what’s next.

To zoom out for just a second, what is so interesting and exciting about IRCE is it gives you an opportunity to think about what’s next, what’s happened in the past year, and what does that mean for my business.

RD: Looking back, from your perspective, how has Google evolved over the last few years, and what have e-commerce retailers done to adapt?

ZS: Yeah, so Google is facing the same challenge — or same challenges, I guess I should say —  that the entire industry is facing. And that’s what does the shift in consumer behavior to smartphones mean for the way we do things?

When consumers are no longer conducting most of their searches on a desktop, that changes things, particularly since people are still completing their purchases on desktops over 50% of the time. So things are in flux, and Google’s trying to figure it out.

And as a result, Google is changing. Like I said before, they’re rolling out new advertising options, new tools, new ads, changing the ads, changing the options, changing the tools. And that’s true both for desktop and mobile devices.

And as Google does this, retailers have pretty much no choice but to adapt or risk getting left behind, even if that means that they have to spend more money.

When Google makes a change to drive people to click on ads, rather on organic listings, people do that. Google is really good at figuring out what it can do to change consumer behavior.

For example, when Google added more ads to mobile search results last fall, marketers in turn increased their paid search spending 164%. And that helped paid search clicks rise 131%.

The reason retailers can’t afford to ignore Google’s changes is that while paid search clicks significantly rose, organic clicks didn’t. They rose just 4%, and just a couple quarters before, the growth was 63%.

And as Google does this, retailers have pretty much no choice but to adapt or risk getting left behind, even if that means that they have to spend more money.

When Google makes a change to drive people to click on ads, rather on organic listings, people do that. Google is really good at figuring out what it can do to change consumer behavior.

Now, it’s easy to say, “Spend more.” It’s not my money …  

But no retailer has an unlimited budget, and so what we’ll hopefully dive into at the workshop is ways retailers can think about getting smarter and more strategic in how and where they’re allocating their resources.

RD: From what you’ve seen, what tactics and strategies are common among the e-commerce retailers that are most effective on Google today?

ZS: It’s a competitive landscape out there. A data point that is actually from Internet Retailer data is the fact that the 10 largest paid search spenders among the thousand merchants ranked in the Internet Retailer top 1,000 accounted for 38% of paid search spending last year.

And the percentage grows and grows each year. And so that means that it’s tougher than ever for a small or mid-sized or even a large — but not gigantic retailer — to compete.

And so the best search marketers in e-commerce — or at least the ones who are driving the most return for their investment in paid search and driving the largest amount of traffic from search ads — are being smart about where they’re allocating their resources.

In other words, they’re picking their spots carefully.

It’s tougher than ever for a small or mid-sized or even a large — but not gigantic retailer — to compete.

They’re trying out many of the new ad options coming from Google that take into account things such as the consumer’s location. And they’re monitoring and tweaking their search campaigns constantly to optimize them. Or others are just finding ways to leverage the data on their customers to gain an edge.

Let me give you an example. US Toy Company digs into the online traffic data that they gather from their onsite search to see what products consumers are searching for — what words they’re using — and that enables them to unearth the long tail keywords that they can then use to drive people to their site via paid search ads.

They could have something far more specific, like “yellow rubber ducks.”

And that also enables them to optimize their site for [organic] search, because they know what people are actually looking for.

So it’s all about being smart. Finding ways to have an edge.

RD: I’m curious about the future. Looking ahead, what new opportunities in Google search do you see on the horizon?

ZS: I think this is a good question. And if I had a great answer, I would probably be doing something other than what I’m doing, because I would be taking advantage of that. But there’s always a first mover advantage, always.

The retailers that figure out how to win when Google makes its next move will gain an edge and additional sales. That means being aggressive in trying out new tools and ad formats, and options.

The best search marketers in e-commerce … are being smart about where they’re allocating their resources.

And there’s a big opportunity, for instance, when Google rolls out something like its customer match tool, essentially its version of Facebook custom audiences, which is the tool that enables an advertiser to match up the information that it knows about its customers, and to find those people when they’re on Facebook.

So there’s an opportunity when Google comes out with something like that.

And I think the big opportunity here, and in the future, is mobile, which doesn’t feel quite as new or sexy as it did just a few years ago, because for years, we’ve been talking about, “When is the year of mobile?”

We’ve seen the year of mobile be the past few years, depending on what you’re talking about when you’re talking about “the year of mobile.”

But in a lot of ways, mobile search still remains a work in progress. There remains to be seen a retailer that has really figured out a way to drive the actual sale — and not just the click — consistently, with mobile search.

And in a way, that requires, and is dependent on, really changing consumers’ behaviors. But I think that’s where the next frontier will be.  

Mobile search is still in early days. And I think we will see some changes happen with it. But I think that’s really where the answer is: figuring out mobile. Which I know doesn’t sound sexy, but it really is the next big thing, even though it has been the thing that we’ve been talking about for some time.

There remains to be seen a retailer that has really figured out a way to drive the actual sale — and not just the click — consistently, with mobile search.

And to build on that, part of it is just understanding consumer behavior better and understanding how consumers interact with the various devices that they’re using, because people are using more devices than they used to be, and that goes along with how they shop. They’re shopping on more devices.

It’s figuring that out, tying everything together. But it’s also just getting them to buy when they’re ready to buy, rather than them then going to the desktop.

Rob: How have consumers’ expectations and behaviors around e-commerce changed over the last few years?

ZS: I think what we hear a lot within the industry is a buzzword called “omnichannel.” We hear about omnichannel all the time. And I think it’s the right track, but you have to do it correctly, because the way consumers think is not “mobile,” “desktop,” “store,” “marketplace.”

People don’t think that way. People don’t put that much thought into how they’re buying from J. Crew. They just know that they want to buy a shirt from J. Crew.

That’s a challenge that just about every retailer is facing: How do you put together an experience where it doesn’t matter if it’s mobile, desktop, or a social ad that’s shoppable?

And that means while they’re on the train headed home, they can find it. If it’s stopping at the store just down the street from their house, it’s all the same. So that puts a lot of burden [on retailers]. It’s easy to say, “Just link it all together,” but it’s actually tremendously difficult to do so.

That’s where we see the challenge that just about every retailer is facing. How do you put together an experience where it doesn’t matter if it’s mobile, desktop, or a social ad that’s shoppable?

So it’s thinking holistically, and I think most retailers are still challenged by it. Most, I should say, nearly every retailer is challenged with this. But they have to figure it out. Because if they don’t, consumers are going to go somewhere else.

RD: Finally, I’m curious, what are you looking forward to most about IRCE?

ZS: I always look forward to just hearing from the retailers themselves at IRCE, because I talk to retailers literally every day.

But it’s nice to just have it all gathered in one place and be able to just have these types of conversations, like what sorts of things are challenging, what sorts of things have you figured out perhaps a bit better than a year ago?

So that’s I think the value of any conference — where not just the presenters, but the conversations that you have with the people around you, are tremendously valuable. They can be tremendously insightful in helping you think about things in a different way, and in a way that perhaps you hadn’t even thought about in the past.

When you gather more than 10,000 people together, you’re bound to come across some very interesting people, and that’s what I think is just tremendously valuable at IRCE.

I’ll give you just one example: over the years, we’d come across people who didn’t work for retailers per se. They worked for manufacturers.

They were really B2B players. They were distributors. They were suppliers. They were manufacturers, that sort of thing. And they didn’t really operate a consumer-facing website.

And for years, we would ask these people, “Why are you here?” We were thrilled that they were there, but we didn’t quite understand it, and then we started asking the question, “What are you seeking to gain from that?”

There’s been a tremendous shift in the B2B market online. And B2B e-commerce is a tremendously large space, way bigger than the B2C market. And we figured that out just by talking to people at the show.

As a result, we now have a website with two editors who focus entirely on B2B e-commerce. The website is B2B E-Commerce World, if you’re interested. We have a guide, where we rank the largest players in the space.

It’s a tremendously vibrant, dynamic market that we learned about at the show, and it just came from having these sorts of conversations.

When you gather more than 10,000 people together, you’re bound to come across some very interesting people, and that’s what I think is just tremendously valuable at IRCE, or like I said, any big conference like this.

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