As top marketers and e-commerce professionals we are expected to be on top of trends in order to keep our brand(s) competitive and innovative. In a fast moving digital world where being an early adopter is key; we spoke to the pros to discuss the future of e-commerce.
View highlights on our YouTube channel HERE and read below for more!
Retail & E-Commerce
We can’t talk about e-commerce without recognizing where it all started - retail. As brands look to the future the term “death of retail” is mentioned. But is retail really dying? Rita Shukhman, Senior Vice President of Global Digital Marketing and Communications at MCM Worldwide says no. “Pure e-tailers are actually opening stores because human connection and physical experience is necessary. All of digital is rooted in an experiential component and brands being able to offer people something that’s unique to their brand. You can tease and communicate digitally but customers need a place to go and experience your brand for themselves.”
Brands shouldn’t rule out the benefits of having a retail store. “With the economy taking a turn, the brands opening smaller, more efficiently operated stores will be most successful. Larger retailers with too much real estate might consider downsizing. It’s a matter of exploring market places. That’s the next frontier -- which marketplaces are relevant and the most beneficial.”
In 2019, headlines filled with sustainability-related news. Many brands embraced the movement and are ready for change, while others are struggling. Alissa Baier-Lentz, co-founder & COO of Kintra Fibers, the sustainable upgrade for synthetic fibers knows the demand is there from a sustainability standpoint. “In 2018, 52% of the large global retailers named sustainability as one of the key agenda points that guided all of their decisions. This included marketing, to design, and down. That’s an 18% increase from 2017 and it’s only going to continue to rise, said Lentz.”
But, how realistic is it for brands that are selling on Amazon? Lentz said, “88% of customers want brands to help them live a truly sustainable life that’s in line with their values but they also want instant delivery. That’s not sustainable from a carbon footprint standpoint. Some brands are taking on single use plastic and looking at how to make packaging more sustainable. The consumer behavior such as our need for something instantly isn’t going to change, but we can work within industrial processes we’ve put into place and make one small shift that suddenly makes an entire chain fully sustainable.
As we are breaking down our boxes from Amazon, we feel a collective wave of regret, and I would be shocked if Amazon isn’t actively working on a solution.”
Consumer needs are continuing to grow at a rapid pace. Brands are trying to navigate how to be everywhere, sell everywhere across all channels, and offer free and fast shipping. To stay on top, brands must fulfill consumer demands while also maintaining a profitable business. Liz Dunn, Founder & CEO of Pro4ma Inc., a company dedicated to data and performance management for retailers said, “I think there are other demands that come before sustainability because companies are focused on the bottom line. The rising consumer outrage will bring demands to their door and move it up in terms of priorities but maintaining a profitable business will always be a top priority. We’ve seen profit margins cut more than in half because of brands trying to meet consumer demands.”
Brands are taking small steps to combat these consumer demands. Shukham said, “Brands need to consider their own websites becoming marketplaces. Amazon has a wealth of data and customers. If someone comes into the MCM shop on Amazon, they want to do one stop shopping and fulfill all of their needs at once. They don’t want to go to three different websites.
"A customer wants to go online and buy socks and laundry detergent, but also a wallet for their mom - all at one place. As a brand, I can’t necessarily offer laundry detergent, but I can see the customer bought something for their mom. Would their mom like flowers with the wallet and is that a service MCM can provide? MCM could send flowers on their behalf. That customer now has a different affinity and relationship with MCM because we offered something another luxury brand didn’t, and that makes them like us more,” said Shukhman.
The Amazon Effect
Brands are being forced to mirror the Amazon user experience on their own website to stay relevant. The most recent example is Amazon’s one-day shipping. To compete, brands need to offer the same service. Unfortunately, not all brands have the logistical ecosystem that Amazon has to do so.
This brings us to The Amazon Effect. CEO and co-founder of Envision Horizons Laura Meyer said, “The Amazon Effect is causing brands to take major hits to their margins. Amazon has changed the game in terms of consumer expectations. Amazon’s spent millions in streamlining the check out process. Conversion rates are significantly higher on Amazon vs. brand websites because of one click to purchase and allowing costumers to forego creating new profiles to checkout, saving time. And now with the Amazon Attribution tool, consumers see something on Instagram, go to the brands website, and still buy it on Amazon. Brands will have to play the game in order to stay relevant."
New Technologies in 2020
New payment options such as deferred payment is a technology that is changing the way people shop. What are other new technologies that are going to be important in 2020 and going forward?
Dunn said, “Natural shopping. Right now you can ask your voice assistant to order you more toilet paper. My hypothesis is that in the future you’ll be able to ask Alexa to send options of outfits to wear based on a certain occasion you’re attending such as a sequin dresses.”
But, not every brand is set up for natural search and to allow consumers to search with plain words. Brands need to start preparing now. That’s where the consumerism is heading. If not, they’ll get passed by.
Amazon is already using this in their Amazon Go stores computer vision to enable that experience. You scan your app when you walk in and a computer vision of you is created removing so much friction from the experience. Amazon knows exactly what you took and you can walk out. “The goal is to create something that can be sold to other retailers. But, Amazon will find a way to take a couple of points on every transaction instead of simply saying here’s the technology, have fun,” said Dunn.