When it comes to e-commerce, growth is a trend you can’t ignore. Globally, the e-commerce industry is projected to reach $4.5 trillion by 2021, and in the U.S., online sales are increasing by about 15 percent every year. But when looking at more specific e-commerce trends, it can be difficult to discern fact from fiction. Add in the noise surrounding some of the industry’s biggest buzzwords, and reality becomes even more distorted.
How can you decipher the fact from the fiction with 2018 e-commerce trends? Let’s explore some of the realities around four specific buzzwords, as well as their near-term impact for e-commerce brands.
Fact: Personalization of the Shopping Experience Matters
Personalization is no passing trend or fad; it’s important, and here to stay. Merchants will need to continue to tailor the shopping experience, providing customers more flexibility and meaningful choice in how orders are placed, paid for and, ultimately, delivered. Data from Accenture indicates that 75 percent of consumers are more likely to buy from a retailer that recognizes them by name, recommends product options based on past purchases or knows their purchase history.
Personalization also impacts how consumers view and interact with a brand. When a consumer perceives an experience to be more relevant, they're more likely to feel positive and complete a purchase. Conversely, one-size-fits-all approaches often fall flat. Consider the following:
- 77 percent of consumers have chosen, recommended or paid more for a brand that provided a personalized service or experience; and
- 78 percent of consumers will only act on offers if they have been personalized to their previous engagements with the brand.
So what does personalization look like in action? Look to swimsuit retailer Andie Swim. With personalized packaging and saved payment capabilities for shoppers, each and every customer gets what feels like a tailor-made experience from start to finish. In addition to benefitting customers, these efforts help Andie Swim build robust customer profiles, ensuring that the holistic experience only improves with each repeat purchase.
Fact: VR is DOA for Most E-Commerce Scenarios
Despite the buzz virtual reality (VR) generated throughout 2017, in the e-commerce setting, not much has come to profitable fruition just yet. However, augmented reality (AR), voice and blended offline experiences are expected to flourish and replace the traditional model of online shopping in a way that’s additive to the preferred customer experience.
Entrepreneur reported that in 2017, investors showed enthusiastic support for AR technologies, pouring $1.7 billion in investments throughout the year. For good reason, too: AR is poised to help retailers create an in-store shopping experience regardless of location. This empowers shoppers to overcome obstacles that previously derailed the digital shopping environment.
Ikea, for example, has an AR catalog app that lets shoppers superimpose 3D objects (like furniture) within their homes so they can properly visualize products within their space — without ever walking out the front door. Converse has taken a similar approach with an AR smartphone app that lets users see what different shoes will look like on their feet.
Fiction: AI and Machine Learning Are On the Way Out
While you may not realize it, artificial intelligence (AI) and machine learning have only just scratched the surface in terms of capabilities. They’ll be playing an increasingly large role in consumers’ lives moving forward. From better on-site product recommendations to customer service and support, e-commerce businesses can expect to see these two types of data-driven technology with increasing frequency. Focusing on data allows retailers to better understand customers preferences and buying behaviors.
For example, think about Amazon Go stores. These “cashierless stores” leverage both AI and machine learning to manage the entire in-store process. The work these tools are doing continues long after the customer leaves a physical retail location. Customer behaviors and purchase habits are built out over time to create rich profiles that continually improve the customer experience.
Fiction: Social Shopping Has Stalled
While it’s true that not all consumers are comfortable with the idea of buying via social channels, adoption of social shopping is on the rise. From Instagram-inspired shopping sprees to recommended products from friends and family on Facebook, social channels are indeed shaping the way consumers discover and purchase new products. In fact:
- In 2015, Facebook directly influenced 52 percent of consumers’ online and offline purchases.
- Forty-two percent of consumers say social media somewhat influences their purchasing decisions overall.
- Eighty-two percent of U.S. internet users have made a purchase directly via social media as of September 2016.
The numbers don’t lie. They indicate that social shopping has not stalled; on the contrary, it’s growing. Social channels present incredible merchant opportunities for visual brand storytelling and product discovery. With the help of targeted ads and lookalike campaigns on social networks, sales are thriving through these platforms.
Take SpearmintLOVE, an e-commerce brand for infant and toddler clothing and accessories, as an example. With a smart social advertising strategy that leverages cohort analysis, SpearmintLOVE has seen results like a 14.2x return on ad spend on Facebook, a 33.8x return on ad spend on Instagram and an 11 cents average cost per conversion across Instagram, Facebook and Audience Network.
These numbers prove that with the right strategy and a dedicated approach to ongoing testing with social ads, e-commerce brands large and small can benefit from the growth of social shopping.
The future of e-commerce is full of possibility, and knowing the realities around e-commerce can help ensure you’re distinguishing between fact and fiction to make the right decisions for your business.
Jimmy Duvall is the chief product officer at BigCommerce, an e-commerce software and shopping cart platform.
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