Have you ever wondered about the meaning of the many buzzwords in e-commerce and online marketing? When talking to our customers and partners, we noticed how much buzzwords irritate the business. It’s not just online retailers who are struggling with some terms. As service providers in e-commerce, we are also often surprised by the Buzzword chaos, although we are part of it.
Imagine a trade fair: There are stands everywhere and everyone wants to advertise. In order to be heard, however, the suppliers no longer talk in an appropriate tone. They scream in the face of their potential customers and throw words that nobody understands – not even themselves. In the wild confusion, the screams become louder and louder and more aggressive. The potential buyers remain rooted in this chaos and lose the overview. That can’t be good – neither for suppliers nor for customers.
With the number of providers for e-commerce and marketing technologies, it is impossible to keep track. Every company uses buzzwords, whether providers for shop systems, AdTech or inventory management. So far, so good, because every company has to market its products. If a service provider offers popups that appear shortly before leaving the website, it makes sense to call them Exit Intent popups. If a service provider promises to convert potential buyers into customers, he will call this promise conversion optimization.
Annoying for the customers: They can no longer filter out the suitable providers because many terms are used by all providers – often even if it does not apply to them at all.
As if this chaos were not enough, a culture of inflationary use of buzzwords has established itself. But don’t let yourself be blinded: The buzzwords often only describe terms that are outdated in the opinion of some particularly imaginative marketers. Mind you: Mostly the terms are outdated, not the thing itself. And this happens very quickly in the online industry. There is even a buzzword of its own for the phenomenon of actually superfluous buzzwords: Buzzword compliance. Welcome to the world of the online industry!
Why exactly the online business?
Admittedly: Many buzzwords are simply necessary in our business. There are several reasons for this:
- The rapid changes caused by rapid technological progress lead to new functions and associated phenomena, which of course have to be named and defined.
- The online industry is relatively young compared to other disciplines. It is therefore not surprising that there is still no agreement on the most important success factors in e-commerce. This leads to many different opinions and, accordingly, also to terms that serve to differentiate between them.
- Online, the possibilities are simply more diverse and often much more abstract than in other areas. A few examples: Tracking, search engine optimization (SEO), search engine marketing (SEM) and personalization. Terms must be used to make these possibilities tangible.
But this is where understanding stops. What is happening at the moment can only be explained by an out-of-control generation of attention. The desire for more relevance on the market by Buzzword generation turns directly into the opposite: All providers seem to be the same and the chaos and the short life of the buzzwords that has now arisen confuse the own target group so much that they are forced to lose the overview. How could it be otherwise, if not even marketing experts can keep the overview?
Example? In a survey conducted in 2018, marketing experts were asked about the awareness of the term “Martech”. Amazing: 82% of respondents said they did not know the term. This does not mean that the term “Martech” is unimportant, on the contrary. But if your target group can’t do much with a term, why is it used? Right, it’s a buzzword.
Step by step to the Buzzword chaos
Buzzwords don’t fall from the sky. At first glance, this statement seems to be self-evident. At second glance one becomes aware of the absurdity of this phenomenon.
Step 1: Company A wants to generate attention and conjure up a unique selling proposition. So it selects a somewhat suitable buzzword and spreads it. This happens even if the term only describes another term.
Step 2: The more successful company A is, the more attention the buzzword receives. Other providers adopt it because it seems to be widespread. This can, for example, also boost the ranking on search engines in the short term.
Step 3: Company A notices that the buzzword is used too often and is no longer a unique selling proposition. In addition, there are now negative effects on search engine rankings. The conclusion: A new buzzword is needed!
Step 4: This happens so often until there are several terms in circulation for a single phenomenon and nobody knows anymore whether and to what extent these terms differ from each other.
“Lemons” in e-commerce
In his essay, the American economist George A. Akerlof examined the problem of so-called lemons. In the USA, lemons are called cars with lower product quality. In contrast to the seller, the buyer on the second-hand car market cannot assess the product quality due to the asymmetrical distribution of information, or only at high cost. This makes it extremely difficult to distinguish between good and bad cars. Since there is a certain risk of buying a product with defects, most buyers are only willing to pay the price of an average car. However, because sellers of good cars are not willing to sell a good car for the price of an average car, good cars are virtually eliminated from the second-hand car market. This in turn leads to a deterioration in the quality of the cars on the market, so buyers change their price expectations again, the quality of the cars drops again and so on.
Buzzwords can lead to a kind of market for lemons among e-commerce service providers. The asymmetric distribution of information, which has resulted from the Buzzword chaos among other things, makes it very difficult to assess product quality in our industry. A distinction between good and bad service providers is only possible with increased costs and extensive research. Since also inferior and accordingly favorable products are marketed with the same terms, prospective customers are often not ready to pay a higher price. It is no longer about the actual functions, but about the marketing through trendy terms. Service providers with qualitative products run the risk of drowning in the masses under such conditions. As in the used car market, high-quality products can be withdrawn from the e-commerce market very quickly in this way.
What online retailers should do
Nobody wants to get a Lemon. Online retailers should therefore better use the necessary resources under the given conditions in order to be able to assess the product quality, because time-consuming research avoids failures. It is also helpful to select products without a contract term. These can be tested without financial risk and can be cancelled at any time if necessary.
To be really sure, online retailers can compare multiple products through A/B testing. This way, suitable and qualitative products can be determined and failures can be avoided.
One should also pay attention to the transparency of a supplier. The more transparent the payment model is and the more data is made available to the buyer, the more convinced the supplier is of his own product. Signals like that are an indication of good product quality.
What service providers will do
It is not individual persons or companies that are to blame. Attracting attention is a market logic that is good and will not disappear. However, the vicious circle of providers screaming louder and louder is getting cracked because the awareness of target group-oriented communication is spreading. For each industry applies: Actionism in form of the inflationary use of Buzzwords will stop if the offerers get to feel that their target group is annoyed by it. Nevertheless, the industry will need some time until its reflex to generate buzzwords is over.
But as a service provider, we won’t be able to do entirely without buzzwords, because terms like conversion rate, shopping cart abandoners, personalization, exit intent pop-ups and e-mail retargeting describe important phenomena in the online industry and name what we can do: Increase the conversion rate by regaining shopping cart abandoners through personalization with Exit Intent pop-ups and email retargeting 😉