The world of retail is undergoing an unprecedented wave of innovation.
A new whitepaper, called ‘The Future of eCommerce: The Road to 2026’, commissioned by Criteo and published by Ovum, found that technology, new business models and evolving consumer behaviour are the key drivers.
Online shopping today is largely driven by price and convenience – consumers are driven by finding good deal on products that are delivered quickly.
By 2026, these fundamental desires will still exist, but expectations of the shopping experience will have changed drastically.
Millennials and Generation Z consumers, for example, will be demanding more from e-commerce providers, such as the ability to discover, in real-time, unique goods they will not find in big-box retail chains.
For businesses to stay relevant in the next 10 years, here are two key developments that must be considered. The term ‘online pure-play’ will be eradicated by 2026
For many customers, one initial trial is both required and sufficient to establish the trust necessary to make future purchases without having to physically see and feel each new product.
As such, while new entrants to retail will no doubt start from an online pure-play perspective, they will inevitably move to test out physical retail space with pop-ups, complemented by collections or showcase stores to facilitate product discovery and trial.
Zalora is a prominent example of an e-commerce brand in Asia that has already done this. Also Read: India’s ecommerce giant Flipkart raises US$1B: Report
Once they turn into established brands with a significant consumer following, pure-play online retailers must further develop their physical presence to enhance fulfilment and customer service.
For most, this will take the form of partnerships that are starting to emerge today, such as the ‘click-and-collect’ model.
The UK today is the most advanced market for click-and-collect models, examples of which include ASOS and Boots. Another example is MatahariMall.com in Indonesia, which has combined its online presence with designated counters within existing physical malls and hyper-marts to enable click-and-collect.
From now until 2026, physical retailers will continue to reduce the amount of physical space they hold, switching their investment emphases online.
Physical stores in premium locations will shift their focus from offering a large range of products to enhancing customers’ in-store shopping experiences. This will give rise to the integration of technology, such as big data, virtual reality and augmented reality, to create interactive and highly engaged retail environments.
Online retailers, on the other hand, will invest further in establishing physical presences, mainly to enhance fulfilment and customer service. As such, the term ‘pure-play’ will be rendered obsolete. Becoming mobile-first is key to creating shopping experiences of the future
In the retail and commerce domain, mobile will soon become the dominant channel for loyalty programmes and rewards, due to its ability to provide levels of interactivity and engagement that traditional programmes cannot match.
In technologically sophisticated markets like Hong Kong, Singapore and Taiwan, mobile advertising is already firmly in the mix and will become the dominant (but not exclusive) channel for most brands by 2026.
Mobile is also quickly emerging as a key platform for digital content and communications in emerging mobile-first markets, such as India and Indonesia.
As a natural extension of mobile becoming mainstream, ‘contextual location’ will become an integral part of the retail experience. The ability to identify a user’s location and deliver targeted, timely and relevant information and messages is a powerful and compelling proposition.
Moreover, the real-time aspect of location analytics will create an adaptive approach to marketing, enabling retailers to adapt their engagement tactics in real-time to meet an individual consumer’s needs. Also Read: You’re not missing this one out: the 7 e-commerce trends to follow into 2017
One example is the use of Bluetooth Low Energy (BLE) beacons. BLE beacons are tiny units with built-in sensors that can broadcast signals to BLE-enabled and mobile devices within range, triggering corresponding beacon applications on the device and allowing retailers to engage their customers after they have left their physical stores.
In this instance, if a customer considered buying at smart TVs for more than 15 minutes but leaves the store without making the purchase, location-based technology will suggest that an interest exists, even though it has not led to a purchase. The retailer can then follow up by sending the customer recommendations and promotions related to the product.
With consumers increasingly interacting with brands, and one another, through digital content and services on mobile devices and native applications, retailers must become familiar with application-based and cross-device advertising and messaging.
Apps are fast becoming the best channel for user engagement, online sales of both small- and big-ticket items, and tracking of performance metrics like conversions, product views and average order values.
Retailers who can integrate the mobile web, apps, in-app targeting and contextual location into today’s business operations and engagement strategies will set the stage for the seamless adoption of newer mobile technologies or add-ons when required.
A decade from now, instant gratification will mean something more sophisticated than just a quick fix. It will have evolved into expectations of a seamless shopping experience across a range of connected devices, in which immediacy, convenience and personalisation are paramount.
Consumers will expect goods advertised online to live up to the promise in every way – with no disconnect between the ‘fit and feel’ of what they see compared to what they actually get.
This places immediate pressure on retailers to evolve in how they operate and engage consumers. Those that fail to meet expectations will fall by the wayside.
To read the full ‘The Future of eCommerce: The Road to 2026’ research whitepaper, commissioned by Criteo and produced by Ovum, click here.
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