Connecting with Gen Z and a new role for content: How ecommerce marketers must adapt

As online retail adapts in the face of current headwinds (including shipping and acquisition costs, and softer demand), Econsultancy asked a group of ecommerce leaders how businesses can build resilience longer term.

Whilst omnichannel innovation and a focus on CLV have always been on the docket for many retailers, our panel also highlights the radical changes that Gen Z may bring to marketing, as well as the evolving role of content within the purchase journey.

Despite UK ecommerce being up 17% from 2019 to 2022 according to IMRG’s Online Retail Index, ecommerce numbers are often viewed in the light of pandemic spikes. Accordingly, UK online retail sales fell by around 10.5% in 2022, and sales are reverting to the pre-2020 trend line. As Xeim Engage MD Richard Robinson puts it, “long-term prospects can never be as exciting as short-term gains,” as retailers battle with shifting consumer behaviour (and dwindling online conversions).

At Econsultancy Live last month, Robinson discussed the outlook for ecommerce with Ben Carter, chief marketing officer of Carwow; Deirdre Mc Gettrick, founder and CEO of Ufurnish; and Ottokar Rosenberger, CEO/NED/Adviser.

Ecommerce brands need to connect with Generation Z in more meaningful ways

Younger consumers will hugely impact ecommerce in the near future, suggests Ottokar Rosenberger.

“I think they’re going to change a lot [of things],” he said. “They have an extremely different approach to brands… 50% of Gen Z will definitely switch brands if they find a better or cheaper solution. Even if they have a favourite brand, 60% of them will check out other brands as they go.”

Consequently, said Rosenberger, “the classic loyalty programmes we have today aren’t going to cut it for them. But they have a strong belief in community.”

Instead, Rosenberger believes that retail brands need to connect with Generation Z in more meaningful ways, particularly in the age of influence.

[Gen Z] have an extremely different approach to brands

“So what does that now mean? We are going to have to deal with a world where you can de-influence things. Somebody goes on TikTok and says ‘don’t buy this’ – [that’s] very powerful. We cannot sit here and demote that but actually lean in – this is how they are getting their cues.”

“We were used to a world where it was 1% creators, 9% comment and 90% watch,” he said. “But I think the percentage of creators is going to be much much bigger. Many more people will produce content, many more people will get it out there much simpler and much faster. It’s going to come into the hands of individuals,” he said. “I have a 21-year-old son who is a published artist on Spotify and not even a musician. He just does it, and I’m like ‘wow you just published seven songs and they’re out there’. It’s fascinating what’s going to happen there.”

‘Engaged ecommerce’: content takes a bigger role in the customer proposition

“I think ecommerce is in a really interesting place,” said Carwow’s Ben Carter. “It is tricky at the moment… but I think we are now in this era where it’s not just about chasing the quickest conversion – it’s about what I call ‘engaged ecommerce’. It’s about how you create this real sort of engagement experience.”

For Carwow – in a sector defined by a considered purchase journey – online content remains a powerful tool.

“We’re very lucky at Carwow, we have a very big content business sitting next to our transactional business. We have the biggest motoring channel on YouTube with over eight million subscribers, so we’ve got a lot of content and we use that to drive commerce. I think increasingly you’re going to see ecommerce retailers starting to integrate more and more content into their fundamental customer proposition.”

It is about driving engagement as much as driving conversions. And it’s also about useful ecommerce as well.

Carter also cites generative AI as an exciting opportunity, and one that could change the way consumers approach online shopping in future.

“We’ve got huge amounts of written review content. We rely on reviews and what people are saying about cars and who is buying what. So for a ‘car ChatGPT’ to give you those answers while you are browsing is going to be incredibly powerful. So, I think it is about the survival of the fittest. It is about driving engagement as much as driving conversions. And it’s also about useful ecommerce as well,” he summarised.

The road to profitability dictates a focus on lifetime value

As well as physical retailers pivoting online, Covid led to a boom in ecommerce start-ups, with many investors keen to capitalise on surging ecommerce sales. However, Ufurnish’s Deirdre Mc Gettrick highlights the shift in the last 12 months, perhaps characterised by the struggles of quick commerce startups, where growth is no longer being prioritised at all costs.

“We’ve gone from an era where money was pretty much free and it was all about growth at any rate – it doesn’t matter if you are acquiring customers for £50 that you’re going to make £10 from in their lifetime – it doesn’t matter,” she explained. “That’s completely changed over the last couple of months and I actually think it’s a good change overall because how can you have a long term sustainable business that doesn’t actually make any money? So, you’re seeing that come through a lot and it’s not only growth companies from Series A or the IPO – it’s even companies that are beyond that.”

Ben Carter agreed, citing how new metrics are emerging as a result.

“Before it was like, get someone on your side and get them converted as quickly as possible. But actually, now, metrics like dwell time and engagement are becoming really important because investors have gone from saying we still want growth, but we want a road to profitability, and to be profitable in the next 10 to 12 months,” he explained.

“Lifetime value and engagement is so important – it’s not just about acquiring a customer at any cost, converting them and off they go, it’s about making them feel part of the brand. That’s why I think this introduction of content revolved and immersed around commerce is something that’s going to become a real thing.”

…it’s not just about acquiring a customer at any cost, converting them and off they go…

Carter also cited the traps that some retail brands still fall into with a tactical rather than a strategic approach to communications.

“I think there is a lot of one-dimensional marketeers who put something thing live and then move onto the next thing but actually – and again it ties back to what the future looks like – marketeers need to be three-dimensional,” he said.

“So, launch something, optimise, iterate it, keep looking at the outside world and how that’s impacting the campaign. As marketeers, we’ve become a bit lazy and just assume… here’s a media channel, put something out, off it goes. But actually to really realise the value of that investment but also, more importantly, the value of that engagement from the customer, we need to become much more three-dimensional.”

Changing outdated mentalities, digital innovation, and the long and the short of promotion

Innovation is key, suggests Ufurnish CEO and Founder Deirdre Mc Gettrick, suggesting that there is an opportunity amid today’s challenging environment to “do something differently.”

“The way I describe it is like a tale of two cities,” she said. “There is the old world and there is the new world, and there are people that are evolving in ways that you didn’t think possible. In retail, when you look at a lot of the names that were there [before]… Debenhams, Next… but look at the difference. Next has thrived – which is a very similar business [to what Debenhams was] – and so it is about how do you stay ahead of everybody else.”

Indeed, Next has shown resilience in the face of wider economic uncertainties, recently reporting a quarterly sales fall of 0.7% – better than the 2% fall predicted. The brand has a history of innovation with a strong omni-channel proposition and a pioneering third-party brand strategy.

Mc Gettrick also suggests that brands fall into the trap of focusing on short-term sales rather than real customer engagement, which can be detrimental to both.

“One thing I’m fascinated by is the amount of times I get pushed [a product] and I don’t need it. But then all of a sudden, it’s relevant, and I’m like ‘what’s the name of that company?’. So, it’s about how you can gently be like ‘hey I’m here.’ You can get people offside very quickly by being too in their face.”