With another potentially banner year for online retail just beginning, Jordan Pini, head of e-commerce EMEA at media agency UM, has identified the seven strategic trends for e-commerce that retail brands need to grasp in 2019.
Building a strong commerce experience for customers, particularly online, has never been more critical. If a customer has a great experience with a brand app, that becomes the new benchmark which they expect, even demand, from every other brand touchpoint they have moving forward.
Evolving an e-commerce strategy in 2019 means understanding the top shopping trends across the media and advertising landscape: their potential audience reach today and tomorrow, their maturity and what brands will have to do to take full advantage. We’ve highlighted a Top 7 that are likely to notably impact how businesses plan their e-commerce strategy over the coming year:
Trend 1: Voice commerce
Growth in voice-controlled purchasing, fuelled by Alexa.
Currently, only 2% of global Alexa users report using v-commerce tools regularly, with most looking for ongoing deals and monitoring order status via voice instead. This is because we typically like to see imagery of products before we buy them, and the extent of smart speaker functionality is difficult to know without trial and error.
But as screens are added to smart speakers and the experience is fine-tuned, transactions via voice are expected to grow significantly, generating sales worth $40bn by 2022 as against $2bn in 2018. Brands need to optimise their voice strategy to include relevant purchase, payment, delivery and re-order information. That will ensure organic visibility, deliver a strong user experience and drive sales from voice interactions.
Trend 2: Experiential commerce
Using Augmented Reality (AR) technology to bring products to life in a more immersive way, connecting through to transaction.
The aim of experiential strategies is to connect digital to physical, providing a differentiated and unique consumer experience as well as gathering valuable data that can be used to customise future interactions.
Our research has suggested that 70% of consumers are expecting retailers to launch an AR app within the next six months, and 40% say they would pay more for a product they can experience through AR. On top of AR itself, brands can utilise a variety of technologies to enhance in-store or online commerce experiences, ranging from smart mirrors and image recognition to live streaming and virtual reality.
Trend 3: Democratisation of product
Products personalised by brand ‘super fans’ who share, promote and sell to their peers.
Brands are inviting their biggest fans to have a deeper connection and be more involved through owned apps and private social media environments, and sometimes even to create new lines of products.
This can enable peer-to-peer commerce with special editions, like the Xbox Franchise model that recently saw custom controller sales increase by 350%. Brands should consider how they can activate their biggest fans to help pioneer new product development and be part of the influential marketing mix.
Trend 4: Retail 2.0
Traditional bricks and mortar are expanding online while online giants like Alibaba & Amazon buy into physical space.
New age online marketplaces are approaching physical stores quite differently to traditional retail. Fuelled by data and technology, in-store experiences are becoming customised, purposeful and immersive.
The idea is to provide a multi-sensory experience for consumers, getting hands-on with high quality relevant products, aided by knowledgeable sales staff and fulfilled on the spot or via the online convenience provided by their platforms. Brands need to consider the strength of their reviews and first customer experiences with products, in order to ensure visibility on the new shelf.
Trend 5: Subscription everything
Consumer brands position themselves as a ‘lifestyle’ service as well as a product.
In an effort to build a stronger relationship with consumers and capture mounds of rich data, subscription models are arising in previously unexpected categories, ranging from Nespresso and Threadbox to Uber and Just Eat.
These models allow consumers to forgo large upfront hardware costs, protecting against price fluctuation or saving on recurring purchases, and we expect these services to continue to expand to more categories like video games, apparel, and child and baby items. Brands may need to rethink their business models to understand what products could be more profitable and relevant when sold as a subscription.
Trend 6: Connected commerce
Every touchpoint links through to another personalised purchase opportunity.
With the rise of connected data sources and more sophisticated analytics, omnichannel marketing has become a key focus of many leading global brands. Three-quarters (73%) of consumers are using multiple channels to do their shopping, and those interacting with an omnichannel experience spend 4% more in-store and 10% more online. A cohesive journey across channel and devices can significantly increase ROI.
Brands should develop connected consumer journeys, understanding all available touchpoints in the owned, earned, shared, paid ecosystem to deliver personalised experiences that are shoppable at any moment.
Trend 7: End-to-end social
Users can discover, research and complete a purchase without ever leaving their social feed.
While ‘Buy Now’ buttons are nothing new in social media environments, 2018 saw shoppable ‘tagged’ posts explode, with Instagram reporting that 41% of brands advertising on the platform had tried the new format.
Social platforms continue to create engaging ad formats that blend high quality brand content (especially video) with shoppable features. So in 2019, brands should utilise new catalogue-like formats and curated product lists to drive purchase objectives, often fulfilled via third parties, all within the social platform.
By Jordan Pini
Head of E-commerce EMEA