Product Optimize Summit/2020: Experience Driven eCommerce—Rise to the Occasion
Stephan Millies, Principal Product Manager of eCommerce, WP Engine will discuss recent market shifts, which segments are thriving, and how WP Engine eCommerce clients are successfully navigating these uncharted times by adopting a data-driven strategy to activate new channels, promotions and products. What’s worked, what hasn’t and how to apply the insights.
Stephan Millies, Principal Product Manager of eCommerce at WP Engine discusses:
- How business owners have moved online to navigate through times of complexity, urgency and uncertainty.
While overall spend is down, online sales are up 20-40% compared to the previous year – that is very well above the typical 10-15% annual growth rate for ecommerce.
Full text transcript
– It’s my pleasure to welcome you here at the WP Engine Summit 2020, all digital this year.
Excited to have you here at our product optimize session, “Experience Driven eCommerce: Rise to the Occasion.”
My name is Stephan Millies. I’m on WP Engine’s product team, and I specialize in eCommerce.
I’m very excited to share some of our findings. Welcome to our session. The subtitle of this session is “Rise to the Occasion.”
Well, what exactly is the occasion? And how do we rise to it?
The retail industry of 2020 has seen dramatic shifts. Brutally disruptive on every angle, supply chain, consumer behaviors, a massive shift in spendings hitting each vertical.
Even the dynamic eComm world hasn’t seen this concurrence of uncertainty, disruptions, complexity, and urgency.
My goal for this session is to share some data on what’s happening, and some ideas how to
navigate online businesses through these rough waters, ideas like this restaurant owner had when she hung shower curtains between tables and got a lot of free PR for it.
Our agenda for this session, we’ll take a very quick look at the disruption in the markets. There’s winners and losers, and they both face unique challenges.
How do businesses react? At WP Engine, we have seen our lighthouse clients pivot in many creative and thoughtful ways. I’ll show you the examples and the tools they used, how they stayed in touch with suppliers and customers, and how we stayed in touch with them. And we’ll look at the metrics to measure success.
Now this is obviously a lot to cover. I’m glad that we have some extra time to chat in about 15 minutes, and in the product channels later.
With that, let’s take a look at what happened. The last months have seen an unprecedented shift in consumer needs and their behaviors.
Stay-at-home orders, social distancing, working from home arrangements, and job losses impacted where people shopped and what they purchased.
While overall spend is down, online sales are up 20 to 40 percent compared to the previous year. That is very well above the typical 10 to 15 percent annual growth rate for eCommerce.
Zooming in from overall retail into eComm, here’s a look at the winners and losers by vertical.
And we’re comparing May data with January 2020. Consumers spent twice as much online for groceries. Other changes were not as foreseeable.
For example, when gyms closed, people started ordering sports equipment to train at home.And it was almost impossible to find a decent home gym in April.
Actually, it took me a few weeks to get one myself. And the working from home arrangements triggered a spike in orders for electronics, for example.
Many started gardening projects and invested in whatever else made stay-at-home more comfortable or entertaining.
That’s all pretty understandable, but why did cosmetics sales double? We’ll take a closer look at that.
Sales in makeup here shown in red went down about 50 percent during the first weeks in February.
The segment then recovered and it now outperforms pre-lockdown sales by two X.
Skin-care, however, shown in the gray graph, seems to cover a more essential need and grew steadily.
One reason, these stores often offer hand sanitizers, which may lead to additional cosmetics sales.
And here’s how a WP Engine cosmetics store managed to get ahead. Our client, Biosilk, pivoted very fast, and they started selling sanitizers early on, just like some whiskey and vodka distilleries pivoted when restaurants closed and the need for disinfectants became more urgent.
Biosilk went one step further and they added skin-care ingredients and offered many sizes and variations.
To align with the brand, they positioned the sanitizers as a skin-care product, rather than a healthcare item.
They also added customer reviews, and they featured them prominently to ignite trust for this new product line.
Some of our clients tried a similar pitch with masks. Smashitsports.com specialized in baseball gear, sourced masks that matched their audience in design and used them as an anchor product, not so much for profit on these line items, but to drive traffic and show responsiveness to their shoppers’ needs.
These tactics worked very well for them and customers shopped for masks and ordered bats and gear, as well.
These were examples from some of the 10,000s of S and B stores that host with us.
But there’s also a lot to learn from big box retailers. HEB, for example, Texas’
favorite grocery chain, and ranked number one in the country, showed role model preparedness and agility during the last months.
They constantly stayed in sync with their suppliers in China, later in Italy, who were already exposed to that new situation.
On the local level, HEB understood that restaurant suppliers will have overstock. So they sourced from them everything: food, trucks, and drivers.
They focused and simplified. HEB reduced hundreds of meat varieties, for example, to 50 items to simplify along the supply chain and to use all facilities without any down times.
The chain also anticipated 20 times the traffic at their centralmarket.com domain, which is hosted by WP Engine. Our support and customer experience teams made sure that the site kept up with the random curbside pickups and deliveries, all without a hitch.
Well, as you can see, in the quote on blue here, even HEB’s best in class prep did not help them foresee one thing. What was all that toilet paper hoarding about?
Two strong instincts accelerated each other here. For one, the strong urge to regain a sense of control over something, as trivial as it may be, a displacement activity that gives a calming illusion of preparedness.
This reflex was then accelerated by seeing others buying tissue in pallets, adding a very real fear to miss out.
And as extreme as this is, there are good reasons to understand shoppers’ reactions and how to trigger these instincts, nicely of course, in everyday eComm strategies.
For example, in flash sales, which is what our client, Mike’s Organic, is doing. They sell only once a week, on Friday nights, and that aligns with their stock flow and with the brand’s core, which is freshness.
Giving that sense of urgency often motivates customers to see what all the buzz is about, and they convert at a higher rate.
There are many other used cases. Limited editions, overstock, a new product line, an off-season sale, you name it.
At WP Engine, we help merchants scale up for such traffic spikes, often triggered by celebrity
endorsements or TV promotions.
We then often recommend Queue-it, a virtual waiting room page that guards your site or your cart from crashing, and it also creates a transparent first come first serve experience for the shoppers.
And by the way, we’re currently piloting a set of plug-ins that help with performance, with traffic, and with order spikes.
And I’ll tell you a little more about that in our Q and A session later. Another critical success factor, especially in current times, is communication.
Just Fruits and Exotics is a nursery and gardening business in Florida. They faced multiple challenges at the same time. A strained supply chain and bakery, whether they can keep the store open, a lot of customers online and on location.
When the store owner learned that his business was considered essential, he took extra steps to ensure that his clients are informed about all policy changes, but most importantly, he signaled what didn’t change.
You see a slide from their homepage, and “We Are Open!” is the core message. He clarified that most plants are available, and they sold out earlier than ever before during the season.
I’ll share some examples of their communications. The newsletters open rate increased by a third. Here’s a snippet of it.
They also placed ads on Facebook and due to the many business closures, these ads provided more mileage for his budget at the right time.
Consumers had extra time to work on gardening. It was a perfect opportunity not only to message to existing users, but also win new clients at this time.
Facebook offers a tool called Lookalike Audiences and based on email addresses you provide, they find similar members and show your ad to them.
To reduce his support team’s work load, the store also had communication throughout the site
on delivery times, pickup options, and other FAQs. In these crazy times, shoppers are unwilling to take any unnecessary risks, which leads me to returns policies.
Their importance is often underrated. Two of three shoppers are discouraged from buying if they have to pay for return shipping or for any other fees.
And they particularly don’t want to wait in line at a postal office to buy postage right now.
So view returns not as a failure, but as a chance to get it right the second time.
41 percent of your shoppers actually return for an item from the same shop.
Design a policy and a process that is easy for your shoppers. It should be competitive and prominently visible throughout the entire store funnel.
Look for a shipping solution with a Branded Returns Portal in the WooCommerce Extension store.
For some stores, it will be perfectly okay to deduct a label fee from the refund.
Many shoppers are more concerned about the hassle than the actual cost of the label.
Another trending topic, gift and gift card sales. eGift sales are up 44 percent.
Gift card sales online even 54 percent. And that is great for every merchant’s cash flow, and as Blackhawk Network sales data reports, often used for weddings, charities, to show appreciation for healthcare workers and other uses.
Well, there are quite a few boxes to check until a store is 100 percent ready for gift shopping. Offer and promote gift cards, eGift cards, gift wrapping, baskets.
We’ll cover the how in a moment. Cover gifts and returns policies. How are gift orders refunds handled? What is the timeline for that?
Offer reliable delivery options for last minute gift shoppers, such as second day shipping. And show your shop ranks when consumers Google for gifts.
Use social media channels to promote your gift ideas, or even better, how they were received. Gift orders are also a great opportunity to turn the recipient into a new customer.
You can add a special offer, a flyer, or a fridge magnet to the box. Here’s the easy part. Gift cards are easy to add to the store. Depending on your audience and products, look at both physical and eGift cards. Some plug-ins bundle coupons and other features with it.
Shipping actual gifts can be more complex. It’s about choices, presentation, availability, reliable delivery, and returns policy. All of that needs to be clearly signaled throughout the store and in particular throughout the checkout.
WooCommerce Checkout Add-ons is a plug-in that can serve multiple purposes such as gift wrap offers and extra insurance.
But it can help to stand out even more and show options to gift wrap the items on the actual product page level just like here in the slide.
The plug-in here shown is Gift Wrapper and that will do that for you on the product page.
Here’s some of these takeaways as a toolbox. In disruptive times, it’s a good idea to create a cross-departmental task force, just like HEB did, and prepare for different scenarios.
Look at data, your own and your industry’s, and track results for changes. And it may be tempting to solve problems based on urgency, but the best solutions will often be the ones that work beyond that new normal.
Take advantage of the Woo plug-in marketplace. Try a news plug-ins out; they’re free to test for 30 days. Track the entire store funnel. Often checkout is the weakest link.
And finally, make site performance your priority.
Almost every eComm KPI is heavily impacted by your store performance, which leads me, not surprisingly, to what we do at WP Engine.
We press ahead to bring exceptional digital experiences to life.
We not only host 10,000s of online stores around the globe; we also have the ambition to provide metrics-driven holistic solutions for your stores.
And I hope this session pressed ahead in that sense.
Thank you very much for rising to the occasion with us today. And thank you for your time. I’m looking forward to your questions and your comments now or later in our product chat rooms.
– Hey, everyone, Monica Cravotta here live and in person from my home with Stephan Millies, live from his home in Austin.
Stephan is the Principal Product Manager of eCommerce for WP Engine, and we’re excited to be with you today and answer your questions from his session, “Experience Driven eCommerce: Rise to the Occasion.”
So we’ve got a handful of questions for you, Stephan.
Are you ready?
– Yes, hello everybody.
Thanks for taking the time.
– You know, if we were live and in person, I would say and try to get a show of hands on sprechen sie deutsch? (Stephan laughs)
But I don’t know if any of you are listening from Germany. Stephan is obviously German, but let’s talk eCommerce.
Stephan, are there any tips that you have for driving more traffic to my store?
– Great question.
Yes, there’s a few things that of course, make sense to do.
One of my favorite advices, and I’m not sure if it’s even perfectly in line with the marketplace rules always, is that you should go multi-channel and you should, of course, try products and offers out on Amazon, eBay, many other marketplaces that specialize in whatever you are selling, and one idea, then, is to route traffic to your store for the next purchase is to throw some box stuffers into the parcel or have some fridge magnets or make a special offer.
That would be one tactic to route traffic that you achieve on the marketplace to your store for the next sale.
Another tactic is, like I mentioned in the slides, gift cards is a great tool, because it’s always a triangle relationship that you are creating.
So if you’re selling gift cards to one client, that client might give them away and bring you a new user into your store.
Another obvious tactic is a referral program, so if you have happy customers, use their word of mouth, invite them to invite users to your store.
Obviously you can buy ads on social media. Facebook has a great program called Lookalike Audiences, and the cool thing about that is you can upload your newsletter email distribution list and they will look for similar audiences that are a good fit for your store.
And a lot of that can be tried out for either no or little money to make sure it fits your portfolio of tools and your budget, obviously.
– Awesome, Stephan, thanks. Can you tell he’s a seasoned eCommerce pro?
So, here’s some interesting questions for you. Stephan, on handling returns, so are there some tools that you would recommend and just general best practices for handling returns?
Returns, and I’m really glad for that question, because it’s often an overlooked topic and many merchants, particularly on the newcomer or entrepreneurial stage, they often think that if I make it hard for people to return stuff, then I lower my return rate and that’s great; and that’s not so great on the bigger picture, obviously.
I would go as far as saying that your returns policy is basically the manifestation of all your brand values and the whole personality of your store and of your brand comes to life either in a very restrictive and difficult to handle policy, or in a generous, nice, inviting, and trust-creating policy, so it really starts with who you are and what you wanna be and who you’re competing with.
And unless you have products that are very unique and hard to get and you’re one in a million, then you have to compete with other return policies.
So what I think, there’s different ways to handle returns obviously.
Often, and the nice thing is, if you make it easy for your clients and shoppers, it’s also the easiest on you, so there’s no trade-offs.
What a lot of merchants do is they pre-print labels and put them into the boxes and the label only gets charged if it’s being used.
That is one very convenient way for the customer and you don’t have to deal with approvals for returns and RMAs and so forth.
The tool that I like best, however, is the one that also makes you look the most professional and that would be using a returns portal, a third-party tool, that looks up the order, where a shopper can pick what is going to be returned.
They enter the reasons why they’re returning stuff so you can make improvements based on that feedback.
You can kill skews that are not performing well on returns and you can make your own assumptions on what might be a better replacement.
Or you might change the description of an item, if it constantly gets returned because it doesn’t do what you’re promising, then there’s obviously a problem to fix.
So these analytics are very important, and you look like a million dollar store, because you have a returns portal that is branded like your store and it makes a very professional experience.
So one of the plug-ins in the app store that allow for that in the WooCommerce Plug-in website is from ShipStation.
There’s other solutions for that as well, and I think that is the most professional way
to handle returns, but start with a good policy, a policy that you, that has the authenticity of your store and all the personality of your brand and that reflects that and make it visible throughout the store, because it is probably one of the most underestimated conversion drivers that you have a policy that creates trust.
Long answer, I’m sorry. (laughs)
– That’s great; it’s a very rich answer
with a lot of great tips on how to look bigger than you are.
Everyone wants to–
– Everyone wants to do that, right?
So, okay, here’s a question for you, Stephan, that’s related to performance.
In your presentation, what were you talking about in terms of plug-ins that can improve performance?
– Yes, so first of all,
if you remember Annan’s presentation or if you haven’t seen it, one datapoint was the average WordPress site has 16 plug-ins.
What we see across the firm is that the average WooCommerce store has 36 plug-ins.
So you already have a much larger complexity of plug-ins, and some improved performance, but most don’t, and my first advice would be to look into your plug-ins, run the plug-in manager that Annan spoke about, have a good hygiene around plug-ins, uninstall the ones that you haven’t been using.
Less is really more, so that would be my number one advice. Specifically for WooCommerce, look at managing card fragments and disable them with a third-party tool or with ours, and we have a beta launching soon, and if you wanna be part of that beta, you can try our tool.
On that, there will be another plug-in that makes a lot of sense to use and for performance reasons.
The third one that I would recommend is WP Optimize, which is more a broader tool that also helps compressing images and it increases performance from that point of view, and of course hosting plays a big role and we wouldn’t be here if that wasn’t a big part of that, too.
– Yeah, Stephan, you mentioned the solution that we have in beta right now that is designed to help with eCommerce performance.
– If someone was interested in being part of that beta, what’s the best way to connect with you for that?
– Pick me up on LinkedIn or [email protected]e.com would be also an email address that we can look into, and then we’d make a phone call assessment, go through the details.
We have different things in the kitchen cooking and not everything is a fit for everybody but we’ll make sure that you get on the best path to more performance or to other tools that we’re looking into.
We’re having two layers of approaches. One is we’re building our own software to improve performance and help stores grow and have more runway on WooCommerce.
And the other approach is that we make third-party tools more accessible and more effortless to use in connection with your WooCommerce store.
So both approaches will be playing a part of that.
– Okay, okay, great.
What are your favorite Woo plug-in extensions? If any?
– Favorite in terms of helping eCommerce grow and value, I like subscriptions.
I think that is, specifically now in corona times, a functionality that helps merchants smoothen out the ups and downs a little bit in their cash flow.
So I think subscription is something to look into. Like the presentation said, gifting in general, everything around gifts is more important than ever in times where people can’t meet, but they want to stay in touch and connect and build bridges with mail basically.
So sending out gifts and being ready as a store for that, I think, is very critical.
There’s so many plug-ins, it’s hard to mention just a few. Everything that makes your life easier and your process faster and cheaper, like I said, shipping a big part of that, returns a big part of that, all these plug-ins make a lot of sense.
But don’t overdo it. 36 is already a big number, and like I said, it’s just the average.
– Right, right. There’s a theme for plug-ins for you, Stephan.
What is your recommendation of the best plug-in to customize a shopping cart?
– I have not had that much first-hand experience in comparing different ones. I just use one, and I was not 100 percent happy, so I would hesitate to make a recommendation.
I think what matters is in the checkout that you are able to customize the things that matter and that you have a professional branded experience that you mention your returns policy, that you have testimonials, that you have options for currency if you go international, so I can speak to those options and those features that I think a good checkout experience should entail, but I would hesitate right now to say this is the one plug-in that does it all.
– Yeah, well, that’s okay. I think you just provided a good checklist of what to look for, so that’s great.
What are you most excited about with eCommerce and all the shifts that you’ve seen going on today?
– There’s a lot to mention. Wow, where to start? So I think one takeaway is that now even audiences that were hesitating so far to go online and buy are now going online whether they want to or just have to.
And I’m thinking specifically of elderly people, senior citizens, who are at high-risk and there’s just no other choice for them than to go online, so I think the bar is now higher than ever to provide those best in class experiences and make it more effortless for the shoppers, so I think that’s a huge opportunity and something I’m excited about and it matters always, but it matters now more than ever because, yeah, there is no alternative for some than to go online.
Other, like I said, subscriptions, I think, is something that many, including myself, underestimated. People buy subscriptions for things that you would never think they would, but they do.
So we see a lot of clients using that. I think about 20, 25 percent of our high traffic eCommerce stores have subscriptions enabled or some sort of subscriptions as part of their inventory.
That’s another thing that I think is something even stores that don’t think that they’re a candidate for should try out. And since I love data, I think anything that you can AB test on WooCommerce is awesome, too, so find different ways to organize and design your checkout, and maybe one page or three page checkout, different options to go through, and figure out what works best for your business.
I think that’s another thing that can be a hobby and cool to work on.
– Stephan, I think we may only have 30, 45 seconds, so this’ll have to be a zippy answer on your part.
– (laughs) I’ll try my best.
– Why WordPress eCommerce?
– It has the most freedom to create the innovation and the design experience and the digital unique experience that you want to do.
It comes with some extra burden. We’re trying to make that easier and easier so that you don’t have to have that trade-off between freedom and chaos or complexity.
But the sky’s the limit, and I think WordPress is the way to go.
– Excellent. Well you guys, guys, gals, women, men, (Stephan laughs)
and those of you who identify as one or the other, thank you for being with us for our breakout sessions.
We’re gonna close this one out, and you are gonna move into flex time, where you can go check out some demos.
You can engage on Slack with Stephan or other product managers or you can check out their very cool sessions from all of our platinum sponsors. Thanks again for being with us today.
– Thanks for your time. See you there.