What does the future hold for e-commerce?
05 December 2012
2012 was a tough year for the high street, with retailers around the world struggling to drive sales and many high street stores shutting their doors. By contrast, the digital high street saw resilient growth. In fact IMRG anticipates a further 12% increase in sales over the Christmas period, taking the predicted value of the UK online retail market to £77bn ($124bn) in 2012.
Over the last 12 months, online retail propositions have grown in sophistication, moving away from price driven transactions towards richer branded shopping experiences. Most shoppers now carry a virtual shop in their pocket, in the form of a tablet or mobile device. With so much choice a few clicks away, encouraging customer loyalty and nurturing shopping experiences will be essential for retailers as we move into 2013.
Six key trends that will fuel e-commerce growth in 2013:
1) Bringing a personal touch to loyalty
Some things in retail haven’t changed; the secret to success is still engaging customers to keep them coming back to your brand and recommending it to their friends. Social channels have made it possible for retailers to not only enter into personal dialogue with fans but reach friends of fans too. However, when it comes to driving ROI from loyalty in 2013, engagement will be the buzz word, rather than fan count. Ultimately it’s not the number of fans that makes a difference, but how vocal they are.
2) Curated commerce
Getting a second opinion before committing to a purchase is nothing new, but now rather than taking a friend shopping you can take your entire social network with you. Services such as Pinterest and The Fancy are quickly becoming popular social media tools, allowing users to organise their favourite items into themed collections that they can share with friends. Not only does this fuel personal expression in shopping, but other shoppers will use these collections to inform their own purchase decisions. Retailers must take note and we expect curated collections to be a key trend in 2013.
3) Changing the way we pay
The choice of payment methods that retailers can offer to consumers seems to be constantly evolving and it’s often make or break in a purchase decision. Alongside the growth of mobile transactions, NFC, and contactless payment methods could dramatically change how people pay for products. Services like PayPal and Apple’s iTunes have already begun to centralise payments on mobile, but the next step will be services such as Square that offer sellers the ability to receive card payments with their existing smartphone and a simple plug-in device. This freedom to accept payments either online or in-store will be invaluable for merchants of all sizes in the coming years.
4) The rise of the specialist retailer
Whether it’s brick-and-mortar or online, there has been a trend in recent years for consumers to move back to specialist retailers that can often offer a better-informed and personal service. Moving away from mass-market retailers, to specialist retailers that cater to a specific range or area of products, be that fashion, jewellery, or photography equipment.
5) Increased Video Use
One of the reasons video wasn’t incorporated as frequently into ecommerce websites in the past was that it would significantly slow down the site, and this is still a concern for many. However, as internet speeds become faster across the world, retailers will cease to be restricted by broadband rates and will have the freedom to use increasingly rich media content. We expect video reviews and the virtual un-boxing of products to become more prevalent across retail sites in 2013.
6) Increased mobile integration
Whether it’s a mobile-optimised site or dedicated app, most retailers are coming to terms with the need for a smartphone or tablet solution. However, mobile can offer much more than this, in the next year we expect to see more integration in-store, through the use of apps, QR codes and augmented reality experiences as well as shifts in the payment tools available from NFC to Apple’s Passbook.
In any retail business, the customer is central to success, and mobile and social uptake provides retailers with the opportunity to engage with consumers on a more personal level. In the year ahead, innovating the ways in which we build brand loyalty in an increasingly multi-channel retail environment will be key, as well as ensuring the platforms we offer are seamless.
As an industry we need to refine the shopping experience online, and engage consumers with more tailored campaigns and offers to continue building consumer confidence in mobile as a device to make transactions and also utilise social shopping platforms to give the next level of recommendations as social shopping becomes entertainment.
Adam Stewart, marketing director, Rakuten’s Play.com