Top E-commerce Trends to Watch Out for in 2017

i95Dev

02

The Current E-commerce Environment

Rising Popularity of Other Channels and their Synergy with E-commerce

Marketing & Promotion Trends Affecting E-commerce

Payments, Shipping & Returns Trends to Drive E-commerce Conversions

Analytics/ Data to take Center Stage

Customer Experience will become the Key Differentiator

Security & Hosting cannot be Ignored

CONTENTS

The Current E-commerce Environment

04

Global retail e-commerce sales is forecasted to be around $1.95 trillion in 2016, accounting for 8.7% ($22 trillion) of total retail spending worldwide (eMarketer).

While the pace of growth in overall

retail sales is subdued at 6.0%, the

e-commerce sales continues to

grow rapidly at 23.7%.

GLOBAL E-COMMERCE SALES

05

Asia-Pacific remains the world’s largest and fastest growing

retail e-commerce market, but North America continues to

remain an important e-commerce market (forecasted to

reach $423.34 billion, 15.6% YoY growth).

Asia North America

Retailers will have to fully embrace digital commerce to meet growing demands of their customers, to survive.

This does not mean the mere presence of an e-commerce store. E-commerce will have to be part of their overall business strategy.

Technology will continue to disrupt e-commerce and

retailers will have to continue embracing the change to stay

current.

IMPACT OF TECHNOLOGY ON E RETAILERS

Rising Popularity of Other Channels and their Synergy with E-commerce

07

GETTING IT RIGHT WITH MOBILE COMMERCE

Mobile commerce will continue to evolve and gain strength in 2017; even take the centre stage.

50% $1.2 bn $1.07 bn

By 2017 U.S. customers’ mobile engagement behavior will drive mobile commerce revenue to 50 percent of U.S. digital commerce revenue (Gartner)

On Black Friday 2016, a whopping $1.2 billion were spent via mobile devices, a 33% growth YOY (Adobe Digital’s Report).

Cyber Monday was not far with $1.07 billion spent via mobile devices, a 34% increase YOY (Adobe Digital’s Report).

08

“31% of online shoppers say they use social media channels to specifically look for new items to purchase”- marketingweek.com.

31%

RISING POPULARITY OF SOCIAL COMMERCE

Facebook has a dedicated shopping section where visitors can directly buy items without being redirected to the retailer’s site.

Snapchat will roll out a new e-commerce platform, while Twitter has already tested a ‘buy’ button on its feed.

Instagram’s direct response ad formats encourage users to take actions on posts through buttons such as ‘shop now’, ‘install’ or ‘learn more’.

09

Regular retail physical store will continue to evolve into smarter environments.

Come 2017 brands will blend in technology to build a connected store designed to provide customers a uniform and seamless shopping experience.

The new setup will make way for options like buy online pickup in store, buy in store return online, etc.

DIGITALIZE THE PHYSICAL STORE SHOPPING EXPERIENCE

Finding the right balance between traditional distribution channels and the new direct-to-consumer e-commerce store will be the key.

DISINTERMEDIATION

Manufacturers and Distributors are reaching out directly to customers.

To understand industry and customer trends

To get feedback from customers

To reduce dependency on existing distribution channels

To better control customer experience

To reach out to a wider audience

To augment their existing sales channels

10

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Amazon Dash Button, a wifi enabled device that lets customer re-order favorite products by simply pushing a button from the convenience of the home is an amazing example of this.

Volvo Sensus Park & Pay, HP Instant Ink, and Telefonica Click and Pizza are some brands that are using IoT-enabled e-commerce to their advantage.

IOT ENABLED E-COMMERCE

According to Cisco, there will be more than 40 billion connected devices by 2020. And each of these devices can double up as a sales channel.

Marketing & PromotionTrends Affecting E-commerce

13

E-commerce has had love and hate relationship with Google in 2016. While a number of brands rely heavily on Google to be discovered and to drive traffic to their e-commerce store, Google had upset many businesses with their frequent algorithm changes (penalties for certain SEO techniques, for bad experience on mobile devices, for pop-ups, etc.).

Algorithm

SEO, GOOGLE UPDATES, AND EMPHASIS ON THE MOBILE USER EXPERIENCE

While brands are looking for ways to reduce dependency on Google, brands cannot ignore them. Brands in 2017 will have to make necessary changes to comply with Google’s algorithm changes.

14

In 2017, online retailers will spread promotions to the entire month while being flexible to accommodate adjustments along with way.

According to US Department of Commerce, total retail sales in U.S. reached $465.51 billion in November 2016, with non-store sales contributing $48.13 billion. According to Google, 40% of Canadian consumers start their holiday shopping before Halloween and 88% of retailers in the U.S start advertising sales in the first week of November.

The entire shopping season is slated to kick off early November, hence the name “Cyber or Black November.

BlackFriday

WELCOME CYBER NOVEMBER, NO MORE BLACK FRIDAYS OR CYBER MONDAYS

It is no longer Black Friday or Cyber Monday. It is Cyber November.The whole of November in the year 2016 marked a holiday shopping season with shopping activities taking on a new spread out buying rhythm.

15

A recent comScore/ YouTube study found that about 35 % of Millennial prefer to watch YouTube compared to 18% that preferred traditional television programming.

Further, according to another research by comScore, brand engagement increases an average of 28% when users are exposed to a combination of user created product videos and professional content.

According to Adweek, 93% of consumers find UGC to be helpful when making a purchasing decision.

BazzarVoice says 86% of Millennials believe that UGC is a good indicator of a brand or product’s quality.

VIDEOS AND USER GENERATED CONTENT WILL DOMINATE

In 2017, e-commerce marketers must focus on videos and user generated content to better attract and influence customers.

Payments, Shipping & Returns Trends to Drive E-commerce Conversions

17

PayPal recently rolled out the PayPal Here Chip Card reader compatible with both iOS and Android devices. It accepts EMV and magnetic stripe cards and NFC payments which technologies such as Apple Pay, Android Pay, and Samsung Pay use.

Customers can be exposed to a wider array of payment options, brought about by mobile, tech wearable and just about any other payment-enabled technology.

MOBILE WALLETS TO REDUCE TRANSACTIONAL FRICTION

According to Business Insider, in the U.S. in-store mobile payment volume will reach $75 billion in 2016. Between 2015-2020, the volume is expected to rise by a compound annual growth rate (CAGR) of 80% to

bring mobile payments volume to $503 billion by 2020.

18

Amazon has set new benchmarks with delivery with Amazon Prime’s one-day and two-day delivery. And with Amazon testing delivery with drones, few hours delivery will soon become the norm.

Brands have also started experimenting with options such as buy online pickup in store, local drop-off points, etc. to meet the delivery expectations.

ON DEMAND DELIVERY AND SAME-DAY DELIVERY ARE THE NEW STANDARDS

According to Forrester, 29% of consumers would be interested in, and would be willing to pay more, for same-day delivery of goods in 2016 and beyond.

19

An automated return processing system that delivers an Amazon like shopping experience is what customers demand. Solutions such as Ready Returns, make this possible by integrating into the e-store to facilitate easy and automated returns.

AMAZON LIKE RETURNS PROCESS SET NEW BENCHMARK

According to business2community.com, 67% of shoppers check returns page before making a purchase and 62% of shoppers are more likely to shop online if they can return an item in-store.

Analytics/ Data to take Centre Stage

21

Kissmetrics pioneers such efforts. Their tool can help businesses to track signals from every sales channel and a possible conversion source.

Real-time signal based information actively aid in assessing audiences better and in staying ahead of the game to drive healthier conversions across the board.

REAL-TIME, SIGNAL-DRIVEN ANALYTICS TO FUEL DECISION MAKING

Real-time, signal-driven analytics provide retailers with a deeper insight into the data by giving them the ability to explore data in greater depth which was never possible before.

22

Predictive analysis can help retailers take personalization to new levels. Magento’s recent acquisition of RJMetrics, an advanced cloud-based analytics solution, is a testimony to that.

RJMetrics makes it convenient for Magento e-commerce store owners to better understand and optimize their commerce business based on actionable data and insights into customers, merchandising, channels, and more.

PREDICTIVE ANALYSIS AND PERSONALIZATION

Technology that exploits massive amount of data collected from various interaction points to personalize customers’ shopping experience.

According to a recent Forrester Research report, most firms only use one-third of the data that they collect. Worse, only 29% say they are good at translating the result of data and analytics into measurable business

outcomes.

Customer Experience becomesthe Key Differentiator

24

Year 2016 saw launch of Samsung’s Gear VR headset, Oculus Rift and Sony PlayStation VR. Marketing teams will have to start embracing VR and AR to deliver revolutionary e-commerce shopping experiences. While equipment cost continues to remain high, VR will soon become an integral part of retail (both online and offline).

VR /AR TO BRIDGE GAPS IN CUSTOMER EXPERIENCES

VR and AR technologies can help e-commerce merchants get closer to providing customers the brick-and-motor kind of an experience.

25

They can be made available in mobile devices, messaging apps, website, or specific hardware devices like Google Home and Amazon Echo and are very likely become the first touch point for customers

Facebook, WhatsApp, Twitter, Google, and Amazon are all introducing chatbots and virtual assistants to help with shopping, booking and customer service.

CHATBOTS AND VIRTUAL ASSISTANTS TO DRIVE CONVERSATIONAL COMMERCE

Chatbots and Virtual Assistants are artificial intelligence driven tools that interact and assist customers with a range of activities, e-commerce being one of them.

These tools can answer queries (customer service), create shopping lists, recommend products and places, and even place orders. Now, this leads to a slew of new opportunities for businesses to drive customer

engagement.

26

Frankfurt Airport, one of Europe's largest travel hubs, adopted

Magento to power a first-of-its-kind omni-channel commerce

experience for Frankfurt Airport (FRA) travelers. By building an

infrastructure that unifies all its merchants, and by working on a

strategy that spans more than just owned channels like stores,

kiosks, online and mobile they set the base for providing the

travelers an amazing shopping experience. The travelers can

pre-order from any store or combination of stores while still in

the air, on-site, or in a taxi on the way to the airport - even the

day before traveling.

THE PUSH FOR OMNI-CHANNEL EXPERIENCE

According to Boston retail partners, 18% of the retailers surveyed in 2016 have indicated that they have implemented a unified commerce/integrated commerce platform and two-thirds of them indicated that they

need to further work on the approach.

Because, it is no longer just about the product, brand, or channel. A seamless shopping experience plays a very important role in deciding where customers buy and in driving customer loyalty.

Security & Hosting cannot be Ignored

28

A trend that picked pace in 2016, 2017 will see more brands and retailers moving to cloud. Not just with their e-commerce system but even back-office systems like ERP. E-commerce and ERP players like Magento (Magento Cloud) and Microsoft Dynamics (Dynamics 365) are betting big on the cloud.

THE SHIFT TOWARDS CLOUD

According to Statista, cloud computing is predicted to rake in $15.4 billion in 2017.

29

The use of fingerprint, voice, iris and facial detection technology, biometrics not only enhances security but can also act as a serious analytics tool.

Systematixinfotech.com explains: “Apple experienced an increase in sales when they added the fingerprint scan to iPhone”.

Many studies suggest that by 2017, more than 500 million people will be using phones installed with biometric technology. Various technology firms like MasterCard and Visa are already working on making biometric technology an essential part of payment systems.”

RENEWED FOCUS ON SECURITY

Another upcoming trend in e-commerce is the steady adoption of biometrics by e-tailers to enhance consumer security on e-commerce sites.

About i95Devi95Dev provides complete suite of e-commerce solutions for B2B and B2C markets. We are one of the leading systems integrators for Magento in supporting complex integrations with various ERPs, POS, CRM, Accounting, Mobile and Social Applications.

We advise more than 1500 brands from Retail, Manufacturing, Distribution and Wholesale Trade on Next Generation Commerce and Omni-channel strategies.

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