E-Commerce Trends to Watch in 2015
In this Q&A with Dan Leberman, vice president and general manager of PayPal's North American Online Small and Medium Business Unit, we discuss the digital marketing trends that figure to impact retailers the most in 2015, from social commerce to international expansion to marketing automation and more.
Retail Online Integration: How do you see social commerce evolving in 2015?
Dan Leberman: Social commerce sales in the U.S. are expected to reach $14 billion by 2015, and has evolved significantly from what it was just a few years ago. Social commerce used to mean that retailers were encouraging their customers to simply buy via their social media brand pages, which never took off. Today, we're seeing a rise in social commerce, but in ways that browsing, buying and sharing are happening more naturally. For example, sharing and buying on apps like Houzz and Pinterest. We'll continue to see this type of growth in social commerce in 2015.
ROI: What steps can online retailers take to increase international sales in 2015?
DL: First, retailers need to invest time in understanding which products are in demand in particular markets, shaped in part by cultural traditions, holidays and events. Retailers of any size can sell internationally in cost-effective ways via e-commerce, but they need to do their homework before going global. Retailers also need to determine the differing regulatory requirements for customs, duties and taxes that can make both shipping and accounting a challenge when selling internationally.
ROI: How can retailers use marketing automation (e.g., abandoned cart messages) to increase sales?
DL: Many retailers send targeted emails to consumers who have abandoned carts, some incentivizing them with bundled offerings to complete a larger transaction. One of the most promising new strategies for retailers is to develop a truly comprehensive omnichannel strategy, one that enables consumers to pick back up in one channel a cart that they may have abandoned in another channel (e.g., mobile to desktop) without having to start over or input their purchase information again.
In addition, giving consumers the ability to store their payment information and shipping and billing addresses is a proven way to improve conversions — the less data entry required, the more likely it is that a customer will check out rather than abandon their cart. Solutions that enable customers to purchase in an app with a single touch on their mobile devices remove obstacles from the checkout process and help to increase conversions for retailers.
ROI: Where do you see mobile headed in 2015?
DL: Mobile commerce is on the rise and is expected to hit $204 billion globally by the end of this year. PayPal itself processed more than 1 billion mobile transactions in 2014. Consumers are spending more and more time on their mobile devices and increasingly expect to be able to move seamlessly between all elements of their purchasing journey — no matter where they are physically or what device they're using.
As consumers shift to mobile, savvy retailers are using mobile solutions to target customers, personalize the shopping experience and solve in-store pain points. Early-adopting small businesses have begun experimenting with a variety of mobile tools as they look to drive new sales, develop stronger customer relationships and simplify their operations. Broadly available tools like mobile offers and mobile-based card terminals sit alongside industry-specific solutions that have also been piloted — e.g., the ability to order ahead and skip the line.
ROI: What are some tips for retailers as they finalize their 2015 digital marketing strategies?
DL: Retailers that take advantage of emerging e-commerce trends can get a leg up on their competitors by expanding their markets locally by selling online, in person or on mobile, and globally through evolving technologies. Technology and credit innovation, in particular, is a burgeoning category, as uniquely valuable credit for e-commerce businesses and consumers has become available over the last several years.
Many online retailers are already increasing conversion rates and ticket sizes by enabling "in checkout" credit products. These types of products allow consumers to immediately access a line of credit, subject to credit approval, at online retailers that accept PayPal, without the seller having to take on any risk. On the business side, online retailers that are unable to get loans from traditional lenders may find success with loans like PayPal Working Capital, which uses PayPal sales volume to underwrite the loans. Businesses are using these funds to increase inventory, hire seasonal workers and launch marketing campaigns.