Businesses grow with e-commerce – Los Angeles Business Journal

In the e-commerce space, brands face challenges in reaching old and potential customers. From ad blockers to the ability to track data, it’s harder for companies to reach the audience they want.

Running online ads has also become more expensive and less rewarding.
Two years after the supply chain crisis, brands are finding that shipping costs are much higher than they were before the pandemic.

Despite this change in the industry, e-commerce remains a driver of the U.S. economy. E-commerce sales in the U.S. reached about $871 billion last year, according to Statista, a figure economists don’t expect to reach until 2023. Globally, total spending on e-commerce last year was nearly $4.9 trillion.

That’s where Tapcart comes in. The Santa Monica-based company designed a technology that integrates with Shopify, an e-commerce platform for online stores and retail point-of-sale systems. Shopify merchants can use Tapcart to connect more with shoppers through the mobile app. They can also sync the backend of their online store and use the online editor to build mobile apps.

“Consumers are using mobile devices. (More than) 90 percent of their e-commerce time is actually on mobile devices, not web browsers,” explained Tapcart founder and CEO Eric Netsch. “This naturally starts to evolve and change the way merchants market to their best customers.”

Eric Netsch and Tapcart employees at the company’s Santa Monica headquarters.

Create an application

Founded in 2017, Tapcart is a software-as-a-service platform that helps brands across multiple industries create mobile applications to help companies reconnect with customers.

“We believe it’s important to have an own marketing channel that you can rely on. Advertise on Instagram or Facebook, you don’t own the traffic, you have to pay for it,” Netsch said. “It’s important to be able to have a website that you own and control, but so is having a mobile experience with a sales channel (such as a mobile app) that you can own, customize and rely on.”

Email and SMS are marketing channels a company can have, and the best way to leverage them for marketing is through text push notifications. According to Tapcart, push notifications increased retention rates by 88% and reduced cart abandonment rates by 30%.

“You own the data,” Netsch said. “Incoming (information) through push notifications, you can use our platform to access and use that data to better drive your marketing campaigns.”

Tapcart earns revenue through a subscription model to access its services. For example, companies such as e-commerce brand Fashion Nova pay monthly subscription fees ranging from $250 to $1,200 or more. Prices could rise if brands push for more use of their apps.

The app store ecosystem and push notifications have become very important to companies like Apple and Google, Netsch said.
“They want you as a business to have an app, want push notifications, and they’ll help you in the process,” Netsch said. “It’s something that people rarely talk about. Usually, ‘Apple is killing the email and advertising business’, but the opposite thing they’re doing is they’re prioritizing mobile apps, and they’re prioritizing Push notification experience.”

“If you’re a business, that’s a good thing because they’ve invested a lot in the app store and push notification technology, and they’re going to continue to make that more accessible and a better experience, not just for consumers. for the brand, and for the brand,” he added.

changing market

Just a few years ago, marketing looked very different.
According to Netsch, merchants rely heavily on email marketing, but the channel is saturated and no longer has the same effect. Email marketing is 45 percent less effective every year, he said.

“Email marketing is starting to be de-prioritized by systems like Gmail and Outlook and other systems that can categorize your mail. So now we see a lot of businesses using email as a traditional marketing strategy, but it’s stuck in promotional labels,” Netsch said. “You may have thousands of emails from your favorite brands that are just locked into that area.”

Last April, Apple released an update that made it harder for the company to track users. Before this update, Apple devices automatically sent an identifier for advertisers (called IDFA), a device identifier that advertisers could use to track in-app activity and how users interact with certain ads.

“In the past, the principle was ‘opt-out.’ If you didn’t like being tracked, you had to drill down into seven levels on Facebook or Instagram and then opt out of being tracked or receiving ads,” said USC marketing professor Gerard Tellis. “The situation is changing. That means by default you are opted out and companies have to make you opt-in to be tracked. It means they have to incentivize consumers to be tracked.”

We believe having your own marketing channel…is very important.
Eric Nage
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According to marketing analytics platform Adjust, about 20% of iOS users cannot be tracked with IDFA because they opt out of ad tracking.
“With Apple removing some of the tracking features, it’s harder to tell if your marketing is working,” Netsch said.

Best of all, the advertising market is more competitive than ever. A few years ago, advertising online was fairly easy and affordable, and businesses of any size could participate.
According to Netsch, the advertising industry, like many other industries, has been affected by the pandemic.

“A lot of the big industry players (once) pulled their ads back, which really gave some fuel for millions of e-commerce brands to start advertising and start competing with each other in this space. So now there’s more competition than ever, and it’s becoming It’s getting more expensive,” explains Netsch.

The biggest and most recent shift, according to Netsch, is that companies like Apple and Google have put limits on performance tracking, which means it’s difficult for brands to retarget customers based on ad performance.

“The dollars you put in Facebook and Instagram, you don’t know if it’s going to work,” Netsch said. “There’s a line there, and (it) adds another big traditional marketing technique for e-commerce brands, which is now getting more inefficient and expensive every year.”

Recently, Tapccart released a product called App Clips, a mini-app that requires zero downloads. It works by allowing shoppers to scan the company’s QR code on a merchant’s website to access the brand’s mobile app without downloading it. According to Tapcart, brands can take advantage of App Clips to reduce the friction of discovering and installing apps, enabling sellers to increase conversions, gain new downloads, and encourage long-term repeat business.

“You don’t go to Blockbuster to rent movies anymore; you can stream them from Netflix and other services when you need them,” Netsch said. “It’s the same concept for apps. And (I) can imagine a world in a year, two, three years, where you never have to hit the install button and download the app again. You can use it when you need to They, we actually support that feature.”

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