The future of eCommerce

It’s very easy to get caught up in the operational side of our work lives focusing on the here and now.

My inbox has daily updates from Internet Retailing UK, Internet Retailer USA, Practical eCommerce, eMarketer and Mobile Marketer just to name a few, and to be honest, of late I just delete them unless the title really grabs my attention as there is so much going on. I was therefore glad to attend the eCommerce Expo and Conference in Melbourne recently.

Top 500 opinion

Peter Cobb of eBags USA, a top 500 eCommerce business, touched on the topic of testing different elements on a page, and how departmental agendas in an organisation should always be put to the test. An example was testing the colour of price displayed. He highlighted how the design team provided opinion on what the colour of price displayed should be on the website, suggesting a shade of blue. However the testing demonstrated that red pricing (in this instance) brought about a higher conversion rate. In some of the tests, the difference in conversions were only a few basis points, however over a 12-month period, he demonstrated an extra $3 million in revenue; nothing to be sniffed at.

The topic of Pinterest, the website that allows you to ‘pin’ your favourite images across the web in an array of albums and boards also came up; some stats describe it as having the highest growth rate of any website in history. Pinterest should be used for more than just randomly pinning, but with an end in mind. A good example is LuLuLemon, which uses Pinterest to focus on lifestyle and fitness by conveniently having their models donning their attire. Other pins don’t directly relate to the brand such as images from Tour de Franceor thefood board.

No doubt a feel-good set of images that once again highlight why the brand is successful, as they focus on the emotional side of physical wellbeing, not their product, and the sales take care of themselves.

Consumer reviews of their experience with products on eBags.com also still play an extremely valuable role in assisting in conversion of sales, further assisted where possible by video. What better way for buyers to gain confidence other than reading testimonials of other buyers? (As a local example, Sydney-based retailer Style Tread uses video effectively, too.)

A clever touch to the eBags site is a ‘steal of the day’ feature offering a great value item each day. This creates ongoing interest on the website.

Trends in design

Responsive design is also a recurring topic at the moment, i.e. website design that responds to the device it is viewed on is an extremely important consideration as users move regularly between devices. A responsive website should appear correctly on a PC, reformatting itself to fit the screen of a smartphone and look great on a tablet too. There is growing support for responsive design in favour of app development for numerous reasons. Apps have a place, however, it doesn’t make sense to just make an app for the sake of making an app. Apps for weather, banking or pop-up sales work fantastically, but an app for a department store is not going to hold much interest.

Current statistics

• In Australia, 62% of mobile users do research on their devices before purchasing (online or in-store).
• The split of devices (from a European perspective) used when purchasing is currently: 70% PC or Mac, 20% tablet and 10% mobile.
• The duration of a purchase in 2002 was 0.5 days, now its 3.4 days as the web provides more choices thus adding a level of complexity in researching and narrowing choices. Similarly, the time spent on purchasing was 83 minutes in 2002, now 111 minutes, as there are more channels to shop over compared to 10 years ago.
• By 2020, store numbers will fall and sales will drop 15-20%.
• Direct store sales will drop to 32% from 72% in 2010.
• Direct web sales will double to 21%
• By 2020, web will play some role in 68% of customers’ shopping journeys
• Customers now have blurred channel boundaries and so a seamless cross-channel experience will become a key principle of great retailing.
• Two-thirds of retailers plan to use stores to fulfill orders.
• 41% of goods sold will be picked up in-store.

Technology

On the topic of technology, Gen X embrace technology but Gen Y fuse social with technology, they live it. Gen Y live for and create content, and are taken by what friends and family think. There is also an ever-emerging cross-channel complexity. The customer buys in-store or elsewhere; picks up from store or has goods shipped from store or distribution centre. From a business perspective this equates to a single stock view or multiple stock pools across channels, i.e. in-store, via kiosk or touch screen device in-store, via website etc. And let’s not forget the returns journey.

However, all the consumer wants is the product; they don’t care about the path, process or complexity. The enabler therefore is technology and process. You can buy the technology, it’s the process and this cannot be bought. This is often a company’s sustainable competitive advantage.

Expectations on delivery of stock and the speed of delivery continue to be tested by demands of the consumer.

In some instances, if proximity permits, a 90-minute delivery is offered from placement of order. There is a premium charged for this service and, incidentally, there has been a high uptake of the 90-minute delivery due to the customer’s need for high predictability of delivery, and feeds off the ‘I want it now’ principle.

In-store, the tablet revolution is changing the way retailers choose technology. Relatively inexpensive iPads (and as prices come down, Windows 8 touchscreen devices) are replacing cumbersome point of sale (POS) equipment with nifty POS apps at a fraction of the cost.

In-store Wi-Fi enables mobility and, as such, takes the till to the item, instead of the item to the till. Credit finance, customer relationship management (CRM) software, mobile payments etc. all empower staff and provide more of a personal experience to the customer.

Other new-age options are digital gifting e.g. gifttogo.com.au and services such as Wrapp – social gifting. To add to this, the concept of the mobile wallet is also becoming a reality with major vendors coming on board, to provide this technology and convenience – just don’t break or lose your phone while travelling.

And here it is after much debate – F-commerce (Facebook commerce) doesn’t work. Social is about social not about selling. A year ago, Asos.com suggested a similar result with their F-commerce attempts.

Personalisation

In the fashion industry online, there are always challenges of fitting and sizing. New technologies look at avatars and body shapes, allowing consumers to better tailor their choices when purchasing.

Back on the topic of omni-channel retailing. Fully localised sites have an anywhere, everywhere philosophy – they open the stock portfolio to the web and other stores in a real-time view (true omni-channel) so demand dictates supply instead of the other way around, so the client could still purchase. The question does arise though, for example, if there is a last size eight. Do you let all stores see this and have this transparency, at the risk of an online shopper adding the item to the cart while it is in the hand of a salesperson about to process it at point of sale in-store? Due to all these dynamic options available, stock decisions are starting to be driven through algorithms, marketers are influencing more IT spend and role dynamics are changing from supply-based to demand-based. The distribution centre owns the last mile. How well businesses do this will define the customer experience.

Mark Freidin is an experienced chief operating officer, eCommerce pioneer and consultant to fast-growing companies in Australia. Email: mark@internetretailing.com.au.