The future of commerce for retailers has been revealed in a big way – online sellers have been experiencing a massive retail season, making the 2019 U.S. holiday shopping season notable in at least three distinct ways:
For e-commerce businesses, it’s also worth noting that U.S. online sales have risen 13.2% this year to $135 billion, accounting for 13.4% of all holiday retail purchases.
This trend will only continue to grow – and not just during the holidays – with some projections showing overall worldwide revenues from e-commerce ballooning to $6.54 trillion by 2022, more than double their current amount.
Unsurprisingly, the digital-native and big-box players stand to reap the biggest rewards. Vast inventory, rapid shipping and handling capabilities, and economies of scale for purchasing that enable competition-snuffing pricing strategies mean that there simply is no “toe-to-toe” strategy worth executing any longer for many small or mid-market e-commerce retailers.
But, with a market so enormous, there’s still plenty to go around, and the smartest online sellers know that it’s not scale, but ingenuity, agility, and strong brand values that can drive a stellar gift-giving season and beyond.
Let’s look at three elements retailers can focus on to maintain a competitive edge in a crowded marketplace by delivering convenience, unique experiences, and loyalty-inspiring transparency to savvy and connected shoppers.
Mobile commerce, or m-commerce, is rising fast as more shoppers are shopping, paying, and banking on their small screens, with expectations for the same seamless experiences they've come to expect when shopping on their laptops and desktops.
The future of commerce for retailers requires mobile. Fun fact: Many market prognosticators predict that, by 2021, mobile commerce (m-commerce) will account for 54% of e-commerce revenues worldwide. Think about that. We’re increasingly tethered to our mobile devices, and those devices are the main channel through which many of us get our news, interact with our friends and family members, shop for goods and services, and so much more.
For retailers, this means that the mobile shopping experience cannot be an afterthought. In fact, it should be the first thought when designing the customer experience.
The fact is, even “adaptive” web sites generally offer a sub-optimal mobile experience, since their initial design was intended for desktop use. And, that bad experience translates directly to lost business.
In fact, Think With Google recently reported that 53% of customers will abandon a site if it takes more than three seconds to load, and you can imagine what tends to happen next – they go straight to the competition. This explains why 70% of e-commerce traffic is on mobile channels, yet less than 30% of that traffic converts to actual sales.
Add to this the rise of the Internet of Things. From smart appliances, to voice activated digital assistants, to the very cars we drive, smart, connected devices are already ubiquitous, and their numbers are increasing exponentially every year. These technologies are also becoming popular shopping channels in their own right.
Even in a relatively nascent state, the AI-fueled algorithms behind this market offer new levels of ease and convenience for things like comparison shopping, targeted notifications, food delivery, repeat purchases, and more.
Actually talking on the phone...not so much. But consumers are choosing mobile commerce for more than half of their e-commerce purchases today - and that number only looks to get bigger. See the trends behind the rise of m-commerce.
Another new avenue for shoppers is social media. Sites and apps like Twitter, Pinterest, and Instagram offer small to mid-sized retailers the ability to market and sell products directly through their channels.
Even without click-through sales, social networks are a perfect environment for influencing a shopper’s decision as he or she hops channels into a brick and mortar or e-commerce environment, making social commerce critical to business growth.
Social commerce is the use of a social platform for e-commerce sales, and it's huge: By 2027, it's projected to drive $604 billion in sales.
For retailers, all this adds up to a growing need to be able to sell into multiple channels while maintaining a consistently great and on-brand customer experience. But, the desktop-first design and cumbersome of many older e-commerce strategies and platforms can make this a daunting task, with the launch of each store front for each channel requiring plenty of back-end upgrades, data integrations, and maintenance.
Because of this, even with an army of developers, the ability to react effectively to fast-moving market trends is severely hampered by pure operational complexity. This is one reason the concept of headless commerce has become wildly popular recently.
With headless commerce platforms, the tight coupling between the front-end storefront layer and the application and database back-end layers of traditional platforms is undone, hence the “headless” moniker. This allows front-end developers to launch, customize, and optimize sites more quickly and creatively, to continually evolve the shopping experience as the buyer journey progresses – without also having to make concurrent changes to back-end systems.
Customers tell brands what they want via actions, social media, and surveys – learn how headless commerce provides the flexibility and freedom they desire.
Also, rather than having to design and build experiences from scratch for each channel, headless commerce platforms leverage progressive web apps (PWA) on the front-end, to deliver a consistent, app-like experience on any device. This means designers and developers can build once and launch everywhere, conserving time and resources while speeding time to market.
Agility is not the only advantage to going headless. Stability is another key factor, since systems of record for product inventory and product content remain intact, discrete, and accessible via API in real time. This can help eliminate, for example, the embarrassing situation of having to back out a customer’s purchase due to out-of-date inventory information.
Best-in-breed headless platforms also offer cutting edge AI capabilities to process streaming (“live”) data to optimize the storefront in real time, unlocking the ability to personalize the shopping experience at the individual level.
The bottom line for why so many e-commerce businesses are choosing to go headless is an increasingly hyperactive market and the need to adapt the business more quickly. Think of it as moving front-end customer experience teams from a digital operations and software maintenance cycle to a more design-based approach. To launch new sales channels, a traditional e-commerce platform requires digital operations teams to perform lengthy and strenuous upgrades on – at best – a quarterly basis. Meanwhile, a headless, API-first e-commerce platform allows design and development teams to launch new properties or optimize the customer experience daily. That amounts to a more dynamic, engaging, and personal experience for the customer – and a better bottom line for the business.
Of course, this isn’t a “one size fits all” solution, but for companies with an adventurous, design-thinking spirit (and a robust IT department,) headless commerce can help establish their brands as forward-looking innovators that put customers at the top of their “nice” lists.
2020 holiday e-commerce stats show one thing is certain after this year: Online sales and mobile commerce are the future for retailers, with mobile driving up to 50% of total sales for the biggest Cyber Week ever.
Speaking of mobile, online storefront purchases are far from the only type of customer engagement you can enable by tapping into the app-sphere. From personalized, location-driven promotions, to more digitally empowered employees, to in-store kiosks for everything from product comparison to one-time coupons, the little supercomputers we carry in our pockets can unlock a wealth of opportunities for boosting engagement, sales, and holiday spirits.
The ability to truly link the in-store and online experience for customers was, for years, the impossible dream for most retailers. But today, that dream is a reality.
Modern, intelligent digital commerce platforms, along with big advances in customer data management technology, allow businesses to gain a deep, in-moment understanding of each customer and act on their individual preferences in real time. The promise, ultimately, is new levels of convenience, an intuitive and personal customer experience that exceed expectations, and a more loyal and engaged audience.
With the right tools, imagination is really the only limit to what’s possible. Whatever form your strategy takes, the goal should be to get customers excited about your brand by constantly enhancing the experience through a trusted, two-way relationship.
This can give shoppers a sense of agency beyond the sale, help define your brand in their minds, and make it far more likely they’ll pass that enthusiasm to their friends and family when it’s time to open presents on the big day.
The future of shopping is entertainment. It's not enough to have an online storefront – brands must do more. Consumers today are looking for novel, immersive, and entertaining shopping experiences.
Loyalty programs remain popular for simple reasons: People like free stuff and they like to be rewarded. But, while it’s easy to get customers to sign up for a program, getting them to actually use it so it drives new business value is another matter. In the future of commerce for retailers, the keys to building a successful program, in essence, are offering unique rewards, perfectly timed incentives, and smart personalization that makes members feel special.
When it comes to holiday shopping, a recent survey noted that fully 70% of consumers prefer rewards in the form of gift cards, and actually prefer branded gift cards over the open loop variety. More than that, half of those shoppers spend more when using those cards than they otherwise would have. So, for many retailers, this can be the perfect currency to build a loyalty program on.
To deepen engagement with loyalty members, remember that each one likely belongs to multiple programs, and have experienced the gamut of “tried-and-true” techniques. It’s important to be smart about how you communicate with those members and avoid invasive and cliché targeting practices that only surface products from customers’ browsing activity in their loyalty portals.
I think we can all agree that it gets annoying to be stalked by our own search histories. Instead, be more experiential. The future of commerce for retailers uses customer data-driven insights to drive predictive selling algorithms and deliver more interesting, surprising results that are nonetheless relevant and that customers may have never found on their own.
As usual, the giants of retail and e-commerce will dominate share of market this year on scale and infrastructure alone. But, by meeting shoppers where they are, keeping the brand-customer relationship fresh, interesting, and transparent, and being willing to try out bold new ideas, your brand can find a seat at the table in the future of commerce for retailers.
The result? You’ll win over lots of new, enchanted customers that will still be coming back for more, come springtime and beyond.
