Innovative or Unlawful? Marketing Tactics in eCommerce
This is part of an ongoing series of conversations with an eCommerce amateur (who shall remain nameless) and one of DFO’s most knowledgeable (and patient) pros.
Today, Pascal Rossol (P) talks eCommerce marketing, compliance and where they’re both headed.
Q: The New York Times recently covered some of the tricks eCommerce sites use to get consumers to purchase things. What does this say about the eCommerce industry, writ-large?
P: That it’s evolving rapidly! When evolution occurs, boundaries get pushed – and sometimes overstepped (both knowingly and unknowingly). Frankly, there is little to no regulation currently in place for a lot of the items discussed in this article. The industry has become very focused on conversion rate optimization (CRO); in the last five years, technology has made it very easy to run the kinds of tests needed to maximize conversions (even for those with a limited understanding of both technology and CRO). When CRO takes precedence, important objectives such as customer satisfaction and compliance can take a back seat.
Q: What type of manipulative marketing tactics have you seen in your time working in the industry?
P: As much as I’d like to say that “I’ve seen it all,” I still come across new tactics frequently. I’m even surprised from time to time when I shop online. That feeling of “being sold” and realizing it a split-second later is, as Mastercard would say, priceless.
The ones we see daily are in the FOMO/scarcity category. They include things like countdown timers, unlimited “limited time offers” and exaggerated before/after pictures. To be fair, not all of these are illegal and are often perfectly acceptable practices if worded correctly and based on facts, i.e. actual sales events, stock levels, customer feedback, etc. Brands should be allowed to say when they have a popular product flying off the shelves.
Q: Customers can walk away from purchases at any time. I’ve shut the door on plenty of vacuum-cleaner salespeople. Are we “pearl-clutching” here?
P: The average vacuum cleaner salesperson has been around for a while now; almost everyone has gotten used to their tactics. I think we will eventually see a similar pattern in online shopping behavior. Customers will become numb to certain decision-influencing techniques. In the meantime, regulators will have to step in to set clear guidelines and enforce them where necessary.
The New York Times article is interesting because the brands mentioned don’t seem to much care about being exposed. The ThredUp FOMO bar is highly effective; it would be easy for them to build a similar feature with accurate sales data (while still respecting consumer privacy).
Q: What does all of this say about where eCommerce compliance is headed?
P: It’s becoming enforced from many different directions. Traffic sources like Google and Facebook have built their own compliance technology and hired armies of staff to enforce their standards. Old school legislation and lawmaking still plays a role, but it can’t keep up because of the volume and speed at which eCommerce moves. It’s interesting to see how other parties are stepping up to the plate to keep advertising in check.
Look at how payment processing has evolved. Large processors and card brands (PayPal, Visa, Mastercard, Amex, etc.) are much more involved in compliance regulation on the merchant side of the business. They do their due diligence prior to a brand or store being launched and make it clear that the merchants will see a series of portfolio recurring audits.
We’re also seeing additional compliance efforts coming from advertisers of all sizes who want to ensure their brands last. Consumer review sites play a much larger role now than ever before in the online purchasing process; consumers feel empowered to share their opinion.
Q: What does eCommerce compliance look like in 5-10 years?
P: I think a lot of it will fall under the category of “overall buying experience.” Customers will see more automation, which will weed out the bad apples. Mistakes by brands will be scrutinized and lead to increasing fines by regulators under the permissive of protecting consumers online, but also in regard to privacy.
Q: Is there a need for consumer education as it relates to marketing tactics?
P: No doubt, but I wouldn’t limit it to just marketing tactics. It’s an interesting time right now because we’re dealing with two very different groups in need of education: those that have a credit card (and may or may not have money to spend), and those that wish they had a credit card. In my mind, this can be simplified to the old and the young. One generation is blind to the tactics being used on them; the other doesn’t know the difference. I’d posit that there’s a much larger conversation to be had around what it means not only to buy online, but to simply be online.
Q: How can advertisers best adjust to the changing landscape? Is there a middle ground?
P: There is one simple trick that can solve this once and for all (see what I did there?). Seriously though, there’s one concept we’re pushing and that is the need for substantiation. Can I substantiate this claim, feature, comment or consumer review on my sales funnel? Answering YES to this question provides adequate cover in most cases. At the end of the day, creative solutions can and should be found to innovate. Good advertising needs to be able to push boundaries.
Vice President, Client Success Pascal.email@example.com