You’ve read plenty of articles about what will the next ‘big thing’ in e-commerce will be, as well as about what is hot right now, so I thought I’d look back over the last ten years to identify the big game-changers in e-commerce. What technology, processes or features have enabled e-commerce to continue to grow at such a huge rate? How have companies like ASOS or Missguided become such dominant players in such a short space of time?
I’ve seen countless changes since the early days of e-commerce. Some ‘next big things’ have disappeared without a trace, while others have emerged from nowhere and remain strong.
Following is my list of the top 10 e-commerce game changers, but it is, by no means, definitive or in any particular order. Feel free to agree, disagree, or suggest others.
Customer reviews and feedback
The implementation of customer reviews is one the biggest enablers of e-commerce in a number of verticals. These days we think nothing of booking a holiday, hotel, or villa online though we have never been there ourselves because we can check real user reviews on Tripadvisor. Reviews give us trust and an independent view on what we are buying. We spend large sums of money on a computer or TV without ever having seen it, and we do this because we’ve read reviews online. Feedback is the primary item that made eBay viable when it launched. Who on earth would buy something from an individual online and pay for that item before they have even seen it? Without seller feedback, the entire eBay model would not have been possible.
Most e-commerce platforms offer ratings and reviews out of the box, and there are many 3rd party services like Bazaarvoice and Trustpilot that offer more advanced functionality. Although reviews are not applicable to all markets, I believe they are the single biggest reason that some products and services are bought online at all. While reviews are not relevant to every vertical, in others it can be the sole reason that their model works at all.
Responsive design has completely changed the way we build website UIs. Before the emergence of responsive, it was common to create separate desktop and mobile version of a single website. Device detection would be used to redirect users on a mobile device to the mobile site, and tablet users would normally browse the desktop site, which was not ideal but better than viewing the mobile site. This meant developing and managing two separate code bases and not being able tailor the experience specifically for tablet users. Responsive design has changed all of this.
The technique allows us to create a single unified UI that is viewed on all devices. The UI adapts to match the specific size of the device to give the user an experience that is tailored to that device. Instead of now only supporting two views, responsive allows us to have as many break points as we want. As a minimum, we would normally have mobile, tablet, and desktop views, but often we may have more, such as portrait and landscape views.
While responsive design gives us the freedom and flexibility to provide experiences that are tailored to the size of the screen, it does mean that front end development can be more complex and costly to develop. UX and graphic designers now need to create at least 3 separate designs and there is more work for a front end developer to do, as they are no longer working on single and fixed interfaces, but instead are working on one that adapts to the screen size. However, the flexibility and the fact that we not having to maintain multiple code bases means that responsive design has completely changed the development of website UIs.
Most online retailers have seen mobile traffic to their website overtake desktop traffic in the last year or two. The meteoric rise in mobile web browsing has completely changed the face of e-commerce. We now take a ‘mobile-first’ approach when designing a new UI, since this is often the most challenging to get right. A website front end now needs to be optimized for mobile browsing with adaptive techniques which will reduce image sizes on slower connections and maintain the speed that users are used to when browsing at home.
Mobile internet has completely changed the way we browse and shop online since we can now easily browse products from almost anywhere, at any time. We may even use it as a product comparison tool as we are actually physically shopping in a store. While the use of mobiles can present challenges to retailers, it has opened up new audiences to retailers and ultimately increased overall traffic.
You may or may not be surprised to hear that PayPal is used as the payment method for orders anywhere between 25% and 40% on most retail e-commerce websites in the UK. Though credit cards are still the most popular payment method, PayPal is always a close second, and it is now rare to find a retail website that does not offer PayPal. The main draw for PayPal is that the user’s card details and addresses are already stored in PayPal, making checking out faster and safer, since consumers do not have to give their card details to the retailer. I can only expect the dominance of PayPal to continue to grow over the next few years.
User Experience (UX)
As the internet industry has matured, so has the process of design and development. Roles have naturally diverged into specialities, as have agencies. It’s not so long ago that a graphic designer would have been given the job of creating the front end design of a website from scratch. Slowly, the industry has come to realize that user experience and graphic design are very different skill sets, and therefore should be carried out by different people. The online retail industry has become increasingly competitive and users are more savvy and educated than ever, so ensuring your website gives the user an optimal experience is vital in order keep up with the competition. It’s not just about having a pretty website, it has to be usable.
UX design focuses on the layout and interface of a website front end, rather than the creative look and feel. A good UX designer will carry out a great deal of research, on both competitors and real users to fully understand the optimal user journeys before creating clickable prototypes which allow the UI to tested before any front end development is carried out. Only once the UX is completed does the graphic designer start to layer the look and feel on top before handing it over to front end developers.
Deliveries and returns
The impact of deliveries and returns on an e-commerce store’s conversion rate cannot be over-stated. Study after study points to delivery and return options being one of the biggest factors in a consumer’s purchasing decision. I cannot think of another area of functionality where the goal posts moved as quickly.
A few years ago, next day delivery was an exciting new option. Today, it is an expectation. Same day delivery is something special now, but I predict that, within a year, it will become standard, as will nominated time and day. Because of the intense competition in the retail market, as soon as one big player implements an attractive delivery option, others are soon to follow. The same goes for returns. In many verticals such as fashion, most customers expect to be able to return items free of charge, and many retailers offer free collection of return items, as well as delivery.
Credit should go to courier companies within this area. Companies like DPD and Collect + have invested heavily in their systems and infrastructure to provide a range of delivery options at a cost that allows retailers to offer affordable, flexible delivery options without a significant impact on margins.
If we look back five years, most companies were just offering a standard UK delivery of 3-5 days, whereas that is almost unheard of today.
Click and Collect
After a few retailers innovated around 5 years ago, Click and Collect has become an instant game changer for retailers. It solves one of the biggest issues that online customers face: not being home when an item is delivered. For retailers that already have a good physical footprint, it is an obvious solution that can significantly increase sales and allow them to attract customers who may not have purchased otherwise. For those retailers without a good physical footprint, companies like DPD and Collect + offer alternative solutions allowing the retailer to utilize the physical footprint of someone else. Click and collect is certainly something that was considered an exception only a few years ago, but is now an expectation by most customers.
Search and navigation
As websites have grown and the number of products offered has multiplied, innovation in search and navigation has been required to make it easier for customers to find relevant items quickly and easily, as well as allowing retailers to more effectively merchandise their products. Out of the box solutions such as Solr, integrated with SAP Hybris, or 3rd party solutions such as Attraqt, Adobe Search & Promote and SLI Systems not only provide impressive search results for customers, but they also allow merchants to control those search results through search-specific merchandising. Suggested search, championed by Google and Amazon, has changed the way we search and is now an invaluable tool on many e-commerce websites.
One of the other big innovations within this area has been faceted navigation. 10 years ago, very few e-commerce sites used faceted navigation in any meaningful way. I believe that today it would be difficult to find a site that does not use it, and that it is certainly one of the most important innovations within search and navigation over the last 10 years.
It’s obvious that social media has had an incredible impact on society as a whole, but it has also had a significant impact on e-commerce. Social media provides retailers with a channel to reach their customers and converse with them, rather than just marketing to them. Platforms such as Twitter and Facebook are also used as important customer service tools, allowing retailers to converse with customers throughout the sale journey.
Social media provides a voice to customers and can incentivize retailers to continue to provide good service. Both satisfied and dissatisfied customers are not shy about voicing their feelings via social, and retailers should always manage this very carefully. Used correctly, social media can be a very powerful tool for a retailer, allowing them to communicate with customer like never before.
It may not always be obvious, but we are all constantly subject to communication as a result of CRM. Whether it is a retailer simply emailing all subscribers with a newsletter or fully personalized communication, some form of CRM tools have been used. Sophisticated tools like SAP Hybris Marketing allow retailers to segment their customers using data collected from multiple channels and touch-points, allowing them tailor their communication to a very fine level. Clever use of CRM has allowed retailers to precisely target customers to ensure that their marketing is relevant and ultimately increase the likelihood of a sale.