Greg Zemor, co-founder of marketplace distribution solution Neteven, discusses how e-commerce is changing and how businesses can benefit.
Compared to sectors such as 3D printing and social media, the online retail sector is the village elder of the tech world. The first online shopping system was conceived in 1979 and Thomson Holidays installed the world’s first business to business shopping system in 1981. Obviously, the systems conceived in the 1980s and 1990s bear little resemblance to the e-commerce systems available to businesses today. However, by continually leveraging new technology to create better offerings to consumers, the e-commerce sector has grown exponentially. The question for those within the e-commerce industry and the wider business community is what the next few years will look like for the sector and how can companies stay ahead of the curve.
The most prevalent trend at the moment is the rapid growth of e-commerce on mobile (m-commerce). More and more consumers are making online purchases via their smartphones and tablets. In 2014, European m-commerce is expected to increase by 53%, which is more than triple the 16% growth rate recorded in 2013 for the European e-commerce sector. For retailers, this presents both a challenge and an opportunity. An omni-channel approach, i.e. making your business present on every consumer channel and on a variety of marketplaces, is now essential for retailers wanting to stay competitive and visible. This omni-channel approach requires time, money and a sound strategy. However, the dividends, for a company that ticks all of the right boxes, are huge. Hitting all the right channels, especially on mobile, opens the door to a massive consumer base.
Most major marketplaces (e.g. Amazon, eBay, Zalando, Rakuten, Spartoo etc.) have adapted to the m-commerce trend by creating mobile friendly features. These features provide retailers with an opportunity to leverage the technology on a marketplace by integrating their product catalogues. As a result, retailers do not need to create their own expensive apps or worry that their own website is optimised for mobiles or tablets. They also don’t need to invest millions in marketing expenses to be visible since marketplaces drive the traffic for them.
This growth of m-commerce is as much to do with the prevalence of smartphones and tablets as it is a result of better shipping, sales cycle management solutions and payment options. The recent advent of marketing and sales management technology has allowed even the smallest retailer to spread their products online via a host of marketplaces and also have their stock, marketing, customer service and delivery all handled externally for a relatively small cost.
The scalability of marketing and sales management technology also means that these services can grow with online retailers and adapt as their needs change or they wish to enter new markets. After all, it’s worth remembering that European online retail is not a homogenous block – the value of e-commerce markets in the north and west of Europe is much greater than the south, central and east of Europe. Shoppers in each country use different marketplaces and have different browsing habits.
Looking ahead, retail technology that enables retailers to better manage and exploit the multiple channels that consumers use to buy products will be a key theme. Technology will get better at matching prospective customers to the right products online, improving conversion and enabling a long term improvement of customers’ shopping experiences. The main driver of this improvement will be better use of behavioural data. As more businesses become adept at analysing the behaviour of consumers to predict product consumption trends, so too will the technology that supports the marketing and management of relevant products.
Just like consumer habits, retail technology and e-commerce is in a state of constant flux. The best retailers and businesses keep on top of changes to consumer behaviour and are aware of new retail technology. By adapting technology faster than competitors, retailers can get the edge and ensure that they remain visible online to their customers.
By Greg Zemor