“We will continue to see a convergence of the digital and physical world. Those who conquer that trend will be market leaders” – John Phillips, Pepsico
This is the age of choice where the customer is king and options and avenues for shopping are aplenty. No wonder, eCommerce has seen a consistent growth of 20% YoY for the last 10 years, with B2C spending increasing by 20% in 2014, reaching $1.5 trillion. By 2018, it is expected to cover 30.6% of all sales in North America and 37.4% of all sales in Asia Pacific.
As retailers vie with each other to grab market space, new trends have emerged in the eCommerce space that are expected to change the way we buy and sell things.
Social networks are expected to play a big role in e-commerce in 2015. With more people across the world becoming “socially active”, social commerce is expected to reach $14bn by 2015. People take to social media to talk about a purchase, share an awesome product experience or complain about a product. Companies stand to gain by monitoring discussions around their brand and capitalizing opportunities to create awareness of their products. Companies will increasingly use social media optimization and social advertising to give their brand a broad market; and customer ratings and reviews, customer referrals and consumer forums will decide what is hot and what is not.
IDC research shows that by 2017, 87% of connected devices will be smartphones and tablets. More retailers are now creating mobile apps and re-designing their websites to be mobile friendly—they load faster, are easy to navigate and are customized for mobile. Advent of digital wallets like Apple Pay and Google Wallet are expected to be a huge shot in the arm for m-commerce. 22% of cyber Monday sales and 47% of Black Friday sales in 2014 occurred on mobile devices. However, it is up to retailers to remove challenges in mobile shopping like slow transactions, inconsistent user experience and difficult check out process.
Customers today have the choice of shopping from a mobile, tablet, the good old computer or the physical store. Retailers who can diversify to each of these avenues stand to profit the most. While brick and mortar stores are increasingly tapping into the online market, many e-retailers are also discovering the benefit of physical stores. Giants like Amazon and Zappos that were strictly online until recently, have now opened stores. Physical stores provide a look and feel of the actual product and bring the advantage of instant delivery. They also help to create brand awareness and can give a huge increase in sales when coupled with an omni-channel strategy.
While customers take to omni-channel shopping, companies are striving to provide a seamless, integrated shopping experience across each channel. Online display of inventory available at the local store and in-store pickups for items purchased online have served to merge ‘Click’ and ‘Brick’. Amazon and Google shopping express have partnered with physical stores to provide in store pick-ups. Walmart allows customers to purchase items online and pick them up from the nearest store. Location based advertising sends SMS alerts to customers on sales and promotions in nearby stores. All of these provide customers with a flexible, integrated shopping experience and at the same time, increase footfalls in stores.
Retailers are investing more in analyzing Big Data to understand and predict customer behavior. Big Data analysis helps to segment customers and formulate marketing policies to meet the needs of various strata of customers. Retailers can now take their products to where and when each category of customers is most receptive. Customer preferences, their shopping history, their purchasing power and history of items browsed are used to offer a personalized shopping experience. The result is a better customer experience and higher sales.
Single customer view implies maintaining a 360° view of the customer including their past purchases, their customer service interactions, their interactions in social media about the brand or its products etc. This information can be used to personalize future communications and establish familiarity with the customer. This can help businesses to acquire and engage loyal customers and reap the most of their CRM tools.
As businesses globally jump on to the content bandwagon, contextually adaptive and responsive websites with interesting content will find favor among visitors. Web content that is relevant and informative helps to establish brand credibility and authority. Responsive web design provides an optimal viewing experience across devices. A great website is key to building rapport with readers and attracting existing and prospective customers. Customer preferences are also changing with 52% of consumers preferring to shop at a retailer offering in-store navigation and 59% preferring self-checkout via mobile.
Gone are the days when free shipping was an incentive for purchase. Today, free shipping is considered to be a right than a privilege. This has prompted retailers to bring in a new concept to get ahead of the competition – same day delivery. Google, eBay and Amazon have set this practice of same day delivery with Amazon getting ahead of the delivery war with Amazon Prime Now that assures one-hour delivery in select areas. It is challenging and expensive for brands spread across cities and countries. But consumer expectations are high with one in four shoppers saying they would abandon their cart if same day delivery was not available.
With retailers competing to lure customers with niche services and technology taking shopping to a whole new level, there has never been a better time to be a customer. Those retailers who adapt to the latest market trends stand to gain while others face the risk of fading away.
Image Credit: Maria Elena on Flickr