Online shopping is growing at a rapid pace globally.
All demographics are showing strong uptake using digital channels to browse and access products and information for online sales. This is resulting in huge revenue gains for many brands with strong digital adoption. Predictions expect global eCommerce sales to top $4.2 trillion USD in 2020.
There are, of course, many advantages to shifting heavily to eCommerce, including owning the end-to-end experience, being able to analyse user data for strategic planning, and offering customer-focused experiences that fit your brand specifically.
The digital direct-to-consumer (DTC) model has made it easy for customers to find products and cheaper for companies to sell through, which sounds like a win for both sides. But the rapid adoption of this trend has led to a saturated market and major players like Amazon create significant challenges for DTC brands.
There are several trends that we see kicking off in the eCommerce ecosystem. These will mould how brands capture, engage, and sell to customers in 2020 and beyond. Brands will need to find new ways to compete with eCommerce giants like Amazon and Alibaba, likely on a more personal level.
Personalization remains an important, almost necessary, component of good customer experiences in eCommerce. Recent data shows personalization efforts can reduce bounce rates by 45%.
The problem that brands are finding in personalization is the ability to commit to it. There are steep costs for building a personalized experience for customers. Whether it's investing in a customer data platform or taking time to build and then maintain a database, the resources required are more than many companies have.
Our advice here is to talk to the experts and plan out a crawl, walk, run strategy to reduce the investment. The purpose of this is to define your persona, map the customer journey, and build less complex logic for success.
Utilizing data/AI to understand your customer.
Data has quickly become the source of truth for many businesses. With a strong foundation of customer data, teams can focus on the micro-moments to foresee customers tendencies and action patterns.
Using data for eCommerce helps you manage inventory, supply chain, forecasting demands, better pricing strategies and sales strategies. Ecommerce retailers use these micro-moments to create and test hypotheses and see results fast. In the past, this was often considered A/B testing but companies are moving faster than this now and are analysing several tests at once through personalisation platforms.
Building on from the previous trend, personalized experiences need data. Customers are willing to give a lot of data to brands if it means experiences are improved in a way that feels personalized to their situation and answers their specific needs.
A good recommendation here is to understand what data you need to create valuable insights and reporting. The tough thing with data is it’s hard to go backwards. Often the level of detail you go into at the start will ripple down to the success you have in the future. You should also consider the tools and platforms you are using today. If it’s likely you’ll replace or remove legacy solutions within the next one to two years, then there’s no point in creating a new data management strategy around it. If this is the case, using overlay tools such as heat mapping will help to offer more qualitative data over quantitative.
A Microsoft study finds 54% of users believe digital assistants will help them make purchases within 5 years. Voice is rapidly becoming relevant in shopping but not always in the way you might think.
Voice commerce will not only play the role of shopping assistant—"Hey Alexa, order me more shampoo"—it will also be part of product discovery and customer education. Brands are starting to adopt and get ahead of the trend by dipping their feet into voice tech.
For some, this could be as simple as assessing web content for voice SEO. Recent research found 31% of smartphone users worldwide use voice at least once a week, and additional research states it is expected that 50% of all online searches will be voice-based by 2020.
Voice is already becoming a part of our everyday life (“Hey Alexa, what’s the weather?”). That’s why some predictions anticipate global voice commerce to be worth $40B by 2022. This means, showing up first on voice search and having branded voice experiences will be a huge advantage as this trend develops.
Our advice here is to optimize for voice SEO and to do it quickly. This is something very few brands are doing today but could deliver some quick wins for those that do.
Another great area to focus on now would be creating a skill that builds voice awareness for your brand. Build organizational confidence with a small investment now— it could return multiples when a voice purchasing skill is released later on.
The final trend is less focused on customer experiences. We’re talking about the headless approach, which revolves around the architecture set up for eCommerce. Headless allows an eCommerce platform to be completely decoupled from the frontend interface. This adopts an API-first approach connecting backend services to create a scalable platform.
What does that mean for your business?
A headless strategy allows your business to push new content, pages, or product info without any code. The true benefit to this is from an extensibility perspective— adding a new presentation layer requires little to no change to the backend strategy. These layers include voice, CUI, IoT, smartwatches, web, and even progressive web apps.
The added advantage of a headless platform is enabling best-in-class microservices. Rather than investing in an out of the box solution, you can pick and choose the perfect tools to fit your needs.
Retail will likely never disappear as a purchasing channel. But what’s clear today is that digital is trending to be a primary purchasing channel, and it will only continue to grow in importance. In time, physical interaction points (i.e. brick-and-mortar stores) will play the role of product education channel over purchasing channel. Exactly how omnichannel experiences will flex to meet these trends to benefit multi-channel experiences remains to be seen. But one thing is certain: E-commerce is here to stay, and strategy and innovation will be the key accelerants to success in the eCommerce world.