Five Commerce Trends for 2018
Digital is without a doubt the growth driver in the retail industry as a whole. Merchants seeking validation for investments in online and mobile offerings need look no further than the recent holiday season: Cyber Monday alone generated more than $6.5 billion in sales, more than $2 billion of which were transacted via mobile devices.
But in order to make all those purchases, shoppers do a lot of what feels like work. They enter and refine search terms, trawl through reviews, interpret sizing charts, remember passwords, and enter ZIP codes. Even browsing for holiday picks using an online gift guide requires shoppers to classify and segment their lists and explicitly select a recipient category, a price range, or a product type.
It’s a far cry from the fun of exploring shops full of interesting finds, or taking in holiday window displays with friends in a festive downtown. Yet replicating this sort of delight in discovery is precisely how merchants can create meaningful relationships with shoppers in 2018, and thereby thrive amidst stiff competition.
After all, few merchants can afford to compete on price or product selection against the likes of Amazon, which offers 300 million SKUs and frequently undercuts the competition when it comes to product discounts and free shipping offers.
Instead, merchants should strive to redefine the experience altogether. Worthy brand interactions that delight through serendipity and, equally important, background the tedious details will win business and foster loyalty in 2018.
Key acquisitions in the past year exemplify this need to move beyond product and price. Ikea’s acquisition of TaskRabbit holds the promise of seamless post-purchase service when it comes to actually assembling those bookshelves. Shared-workspace startup WeWork purchased Meetup.com to forge new online/offline connections. And, of course, Amazon’s own investment in the grocery chain Whole Foods speaks volumes about the importance of brick-and-mortar outlets.
Of course, most brands don’t have the resources to buy businesses outright to create new synergies. But with personalization technologies becoming ubiquitous, merchants can now work behind the scenes at every customer touchpoint to restore fun for shoppers. Among the strategies to consider:
Retailers will live or die on customer experience. Digital business leaders know that growth in 2018 depends on delivering memorable experiences across every digital touchpoint. As the amount of data available about consumers continues to grow, so do consumers’ expectations that merchants will take into account past brand interactions to serve relevant shopping experiences. Close to two-thirds of shoppers said they’re willing to volunteer more data about themselves if doing so results in a better shopping experience. Not surprisingly, then, more and more merchants will turn to data, commerce AI and sophisticated personalization to increase conversion across the lifeycle, drive memorable brand experiences and grow digital revenues.
Think beyond product matching to improve Findability. Search results are an ideal way to introduce predictive content that goes beyond a set of products matching a keyword. Merchants can now personalize results to display relevant buyers’ guides and user-generated content alongside relevant product picks. Search input can also diversify: given that the majority of interactions with brands now occur on mobile, merchants should avoid forcing shoppers to peck out text on mobile touch keypads. Visual search technologies are on the rise that use camera phone photos to match lipstick colors or pick couches to fit a space, as are voice-recognition mechanisms on both mobile phones and digital personal assistants.
Go concierge, whether through subscription picks or in-store service. Online-only brands like Stitch Fix and Trunk Club have pioneered new business models that deliver highly personalized products and standout service based on the profiles shoppers create. Newer startups such as True & Co. use algorithms rather than human stylists to generate picks, and automation of personalized assortments is likely to become more widespread as businesses scale. Merchants needn’t develop subscription models to take advantage of this one-to-one tailoring technology; in-store or online concierge services and customer service reps can also make use of detailed profile data.
Double down on loyalty programs to deliver relevance. Merchants have increasingly focused on retention, and for good reason: returning buyers comprise just a third of customers, but account for fully 42% of online revenues, according to Forrester. Through loyalty programs that enable use of a single user profile across touchpoints, as well as exclusive tools in merchant apps and VIP services in stores, merchants can gather more robust data than ever and deliver ultra-relevant experiences that foster a continuing bond with the brand.
Uber-ize fulfillment processes on mobile and elsewhere. Uber’s popular ride-sharing service backgrounds all the hassles of taking a taxi, from hailing a ride to splitting with payment with friends and hesitating over a tip. Merchants should emulate this model by proactively smoothing logistical snags along the omnichannel path to purchase.
The checkout process for returning customers can be personalized and streamlined thanks to stored payment data and addresses, while automated replenishment subscriptions eliminate the need to reorder in the first place. In-store pickup of items reserved or purchased online should be seamless, with proactive mobile alerts letting shoppers know when orders are ready and helping them navigate stores to the pickup counter. Flawless execution of these experiences demonstrate a commitment to efficiency and proactive service, and earns brands plaudits for user-friendliness.
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