Back in 2010, I wrote about the upcoming ecommerce boom in the Middle East, despite the many omni-present barriers at an infrastructure, institutional and talent level.
Five years later, ecommerce and digital commerce are growing faster than ever.
Billion dollar valuations, disruptive business models, and US seed capital are all signs that the industry is maturing fast. Attend one of several regional tech events and one hears buzz words such as optimizing the funnel, reducing leakage, and reducing friction as ecommerce pushes organic growth.
Let’s take a closer look at all three.
Optimizing the funnel
Understanding customer behavior is the key to optimizing the funnel. This implies a customer should be able to quickly find, decide, and purchase what they want.
Mobile apps are great for these single purpose purchases: download a few cinema apps and one quickly sees which apps have designed a smooth user journey to drive towards purchase, while others require a PhD to navigate.
While the permutations between cinemas, movies, and timings can be complex, understanding the purchase decision is key. Do consumers prefer to search ‘cinema first’ or ‘movie first’? Is 'Gold Class' a key behavior to entertain? Are kids going to the movies? These are all key questions to answer to build an optimized in-app purchase experience.
Another relevant example is a UAE utility bill payment site that has moved the ‘Online Bill Payment’ link directly onto the home page and now pre-fills the payment amount - small changes but big impact.
A key success factor in optimizing the funnel is to understand where customers are abandoning before purchase.
Tracking and reducing leakage is what the best sites and apps are increasingly focusing on. Abandonment can be due to several factors along the funnel such as low purchase intent, navigation confusion, no purchase interest, or fear of payment.
US research into app behavior shows that customers often research products online, add items to their cart to calculate shipping, then visit brick and mortar stores for comparison. Amazon has made great strides to offer an experience to compete with in-store purchases, such as same-day shipping and the 1-click checkout for improved convenience.
An ex-CTO of a Dubai ecommerce site revealed his strategy for scaling retention activities the later the customer abandoned a purchase.
For example, if the customer views certain items on the site, re-targeting is used to show specific ads to the user as he traverses the web. If the customer abandons a cart before attempting payment, the site follows up with an email, and personalized future email campaigns. If the customer faces payment issues, an outbound customer service team calls to troubleshoot in near-real time.
Purchasing consumers result in loyalty, potentially creating a repeat customer. Repeat customers are the lifeblood of a successful e-commerce business.
Friction is becoming one of those buzz words that we hear about consistently in the online world.
A great example is the ‘login screen’, a common step in any shopping experience in the Middle East. While necessary for nascent ecommerce companies to build up a customer database, this annoying step adds frustration for many consumers.
An emerging trend is it to offer a guest checkout option, where just an email is required. After a successful purchase, the consumer is emailed with a coupon to complete a profile on the next purchase. Super experience!
As ecommerce businesses continue to focus on funnel optimization and reduction of leakage and friction, this ultimately drives an efficient, competitive business from within the region.