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Today, eCommerce/digital influences up to 56% of in-store purchases, while eCommerce itself represents almost 10% of U.S. retail sales and that figure is growing by nearly 15% annually. Digital commerce has gone beyond “buying something on a website” to a series of interactions that rely on technology to move goods.

As these figures suggest, stores can no longer survive without being present on their customers’ preferred channels; retailers need to fully integrate digital commerce in order to thrive. Similarly, B2B is nearing the eCommerce tipping point and disruption will become more frequent in 2018.

As one of North America’s leading eCommerce agencies with retail and B2B clients such as Fujifilm, Structube, Grimco, Stokes, Garneau, La Vie en Rose, Birks and SAIL – to name but a few – Absolunet has a front row seat when it comes to eCommerce trends. Here are 10 eCommerce trends to watch for in 2018—important developments that companies need to take into consideration to ensure their online and in-store sales growth.

« Shop retail is not dying, but a painful transformation has begun »

Brick and mortar experiences – physical, on site interactions – are more important than ever. Merchants will have to master the combination of showrooming and webrooming, events, product demos, in-store experiences and more.

Online (“pureplay”) merchants will grow their physical footprint as consumers continue to place a premium on both the versatility and depth of online shopping and the convenience of buying, picking up and returning items locally.

Brick and mortar players will digitize their physical infrastructure and begin rolling out new store features and formats based on customer experience and convenience, with a strong digital flavor.

« Shop retail is not dying, but a painful transformation has begun »

Brick and mortar experiences – physical, on site interactions – are more important than ever. Merchants will have to master the combination of showrooming and webrooming, events, product demos, in-store experiences and more.

Online (“pureplay”) merchants will grow their physical footprint as consumers continue to place a premium on both the versatility and depth of online shopping and the convenience of buying, picking up and returning items locally.

Brick and mortar players will digitize their physical infrastructure and begin rolling out new store features and formats based on customer experience and convenience, with a strong digital flavor.

Online menswear brand Frank And Oak has opened 16 physical stores in North America. The in-store experience includes premium coffee and barbershop services.

Online menswear brandFrank And Oak has opened 16 physical stores in North America. The in-store experience includes premium coffee and barbershop services.

Nordstrom opened a 3,000 sq/ft store with no merchandise in order to focus on services and brand experience such as tailoring, try-ons, stylists and more, including fresh juice and manicures. The space doubles as a pickup and return point for online purchases.

Nordstrom’s opened a 3,000 sq/ft store with no merchandise in order to focus on services and brand experience such as tailoring, try-ons, stylists and more, including fresh juice and manicures. The space doubles as a pickup and return point for online purchases.

Online box-mattress pioneer Casper has opened 15 pop-up shops in cities around the US in 2017.

Online box-mattress pioneer Casper has opened 15 pop-up shops in cities around the US in 2017.

Portland’s Velo Cult stands out in a city with 80 bike shops by blending culture with retail. They carry a selection of new, custom and vintage bicycles, serve at least 12 craft beers on tap, roast and serve coffee on site and have a stage for local musicians.

Portland’s Velo Cult stands out in a city with 80 bike shops by blending culture with retail. They carry a selection of new, custom and vintage bicycles, serve at least 12 craft beers on tap, roast and serve coffee on site and have a stage for local musicians.

Home Depot makes $5 Billion online, but its top priority remains a stellar store experience. Stores and staff support the customer journey for both DIY homeowners and professional contractors.

Home Depot makes $5 Billion online, but its top priority remains a stellar store experience. Stores and staff support the customer journey for both DIY homeowners and professional contractors.

The IRL (In Real Life) pop-up shop in Chicago’s Water Tower Place is a showroom for online-only brands to display their products.

The IRL (In Real Life) pop-up shop in Chicago’s Water Tower Place is a showroom for online-only brands to display their products.

Iconic Canadian parka brand Kanuk‘s unique in-store experience includes a -25˚C (-13˚F) cold room to test jackets in real winter conditions.

Iconic Canadian parka brand Kanuk‘s unique in-store experience includes a -25˚C (-13˚F) cold room to test jackets in real winter conditions.

Many B2B buyers and users will experience their first frictionless, B2C-like purchasing and ordering experience in 2018 as they continue transitioning their product discovery and buying behaviors to online and mobile. Everything from print catalogs to sales calls are being replaced by a digital-first discovery process and a buyer-centric, simplified ordering process.

This ease of ordering/easy-to-do-business-with interaction will lead to increased ordering and share of budget for the vendors who put the user at the heart of the buying experience, an experience that draws its blueprint from the lessons learned from 20 years of B2C and retail eCommerce.

The perfect storm (for disruption)

By 2019, B2B firms will spend more on eCommerce technology than online retailers do.

56% of B2B buyers expected to make half or more of their business purchases online in 2017, up from 30% in 2014.

The US B2B e-commerce market could reach
$1.1T and account for 12.1% of all B2B sales by 2020, and over $6 Trillion worldwide.

eCommerce platform vendors (Magento, Insite, Sitecore, Oracle, Hybris, more) are rolling out B2C-like functionalities that co-exist with complex B2B business rules (partial orders, volume pricing, etc.)

56% of B2B buyers expected to make half or more of their business purchases online in 2017, up from 30% in 2014.

The average age of a B2B buyer/researcher is now
under 35 years old.

89% of buyers search online in a B2B purchase process, with 74% doing so for more than 50% of their purchases.

71% of B2B researchers start with generic unbranded searches and average 12 online searches before engaging with a specific vendor’s site.

Marketplace behemoths Amazon and AliBaba have become the “Google of shopping” in several B2B environments  and are blurring the lines between B2B and B2C.

 

  • In October 2017, Amazon launched Business Prime shipping, a paid annual membership program for businesses in the US and Germany
  • Amazon business has amassed over 1 million “Amazon Supply” subscribers in 5 years.
  • Amazon Business, the marketplace where Amazon combines more than 30,000 sellers (and itself), had $1 Billion in sales in its first year and is growing 20% every month
  • Alibaba generates 80% of all online sales in China (yes, 80%) and is, at its core, a B2B portal for connecting Western businesses and Chinese manufacturers.

Marketplace behemoths Amazon and AliBaba have become the “Google of shopping” in several B2B environments  and are blurring the lines between B2B and B2C.

 

  • In October 2017, Amazon launched Business Prime shipping, a paid annual membership program for businesses in the US and Germany
  • Amazon business has amassed over 1 million “Amazon Supply” subscribers in 5 years.
  • Amazon Business, the marketplace where Amazon combines more than 30,000 sellers (and itself), had $1 Billion in sales in its first year and is growing 20% every month
  • Alibaba generates 80% of all online sales in China (yes, 80%) and is, at its core, a B2B portal for connecting Western businesses and Chinese manufacturers.

From couches to blenders, consumers will be able to see exactly how an object looks in their environment before ordering, including visualizing “plus-sized” items like furniture or bathtubs. This should drive an increase in orders for “plus-sized” items, as well as related shipping and services. AR may also help to reduce returns – eCommerce’s $260 Billion dollar problem.

Apple CEO Tim Cook called Apple “a market leader with AR, noting there are already 1,000-plus apps with AR features on the App Store. Stemming from that, he said AR, which first sparked interest for marketers through the success of apps like Snapchat and the virtual game Pokemon Go, is now “mainstream,” pointing to applications with retail shopping, gaming, entertainment, education and the enterprise on both a small and large scale”

Houzz’s app lets you take rooms in your house and then place multiple products within them, virtually, from a selection of 500,000 product images. The million users of Houzz’s previous AR features were “11 times more likely to purchase and spent 2.7 times more time in the app”.

Houzz’s app lets you take rooms in your house and then place multiple products within them, virtually, from a selection of 500,000 product images. The million users of Houzz’s previous AR features were “11 times more likely to purchase and spent 2.7 times more time in the app”.

Amazon added augmented reality directly into its existing, conversion-focused app’s search function. The AR view feature lets you view thousands of products in your home and office before you buy them, including electronics and tools.

Amazon added augmented reality directly into its existing, conversion-focused app’s search function. The AR view feature lets you view thousands of products in your home and office before you buy them, including electronics and tools.

IKEA Place is an augmented reality app that lets consumers experience, experiment and share adding Ikea products into any space. Products are in 3D and true to scale, so consumers can see whether the furniture or accessory will fit and what it would look like in context.

IKEA Place is an augmented reality app that lets consumers experience, experiment and share adding Ikea products into any space. Products are in 3D and true to scale, so consumers can see whether the furniture or accessory will fit and what it would look like in context.

82% of mobile users search for a local business and 18% of local searches lead to a sale within 24 hours.

The tools to measure a retailer’s ROPO ratio – the in-store impact of digital campaigns and investments – are now more advanced and about to become more accessible to retailers.

By combining mobile devices and payment, social media, personalization, geolocation/mobile tracking, real-time inventory with advanced analytics tools, ERP, CRM and POS systems, retailers will be able to find out which ads, listings and site visits led to in-store visits and purchases.

Canadian bicycle retailer Primeau Velo had a 9-to-1 (9:1) ROPO Ratio, where every $1 spent online drove $9 of in-store sales.

Canadian bicycle retailer Primeau Velo had a 9-to-1 (9:1) ROPO Ratio, where every $1 spent online drove $9 of in-store sales.

British retailer Matalan discovered that every £1 spent on AdWords resulted in £46 in sales, £31 of which was in-store.

British retailer Matalan discovered that every £1 spent on AdWords resulted in £46 in sales, £31 of which was in-store.

The advancement of simplified payment technology on mobile, including fingerprint and facial recognition, will boost the percentage of transactions completed on mobile.

With Google, Samsung and Apple deploying advancements in their payment technology (and doubling their user base), mobile checkout should in fact start becoming the preferred method of payment for retail purchases, with mobile reaching 70% of eCommerce traffic by the end of 2018.

10% of Starbucks U.S. orders were done with their Mobile Order and Pay app. The payment platform was so popular that in February, mobile orders overwhelmed staff and created unprecedented wait times.

10% of Starbucks U.S. orders were done with their Mobile Order and Pay app. The payment platform was so popular that in February, mobile orders overwhelmed staff and created unprecedented wait times.

U.S. Bank Wells Fargo allows customers to withdraw money at its ATMs using mobile in over 5,000 ATMs.

U.S. Bank Wells Fargo allows customers to withdraw money at its ATMs using mobile in over 5,000 ATMs.

90% of China’s record-smashing, $25.4 billion “Singles Day” 2017 sales were completed on mobile and mobile purchases were 97% of total sales in the first minute, processed mostly by AliPay, Alibaba’s payment processing platform.

90% of China’s record-smashing, $25.4 billion “Singles Day” 2017 sales were completed on mobile and mobile purchases were 97% of total sales in the first minute, processed mostly by AliPay, Alibaba’s payment processing platform.

Amazon Go, the eCommerce giant’s prototype cashierless store allows customers to simply shop and walk out of the store. Purchases will automatically be scanned and charged to their account.

Amazon Go, the eCommerce giant’s prototype cashierless store allows customers to simply shop and walk out of the store. Purchases will automatically be scanned and charged to their account.

Paypal works with Android Pay, Samsung Pay, Apple Pay, Visa, Mastercard, facebook and several major banks, making it many merchants’ and consumers’ first choice (and experience) in mobile payment.

Paypal works with Android Pay, Samsung Pay, Apple Pay, Visa, Mastercard, facebook and several major banks, making it many merchants’ and consumers’ first choice (and experience) in mobile payment.

As brands and retailers get better at leveraging consumer and behavioral data, eCommerce initiatives will target much more specifically, nearing the once impossible idea of one to one (1:1) marketing. Just like when shopkeepers knew clients’ names and preferences.
Behavior-based analysis leads to personalization and data driven optimization, which brands and retailers will start using to much greater effect in 2018, signaling the beginning of the end of demographic-based marketing tactics.

“In an eCommerce context, someone who likes Star Wars needn’t be classified into a generalized demographic group, their behavior and preferences is already rich with insight.”

Charles Desjardins, Absolunet Associate

4 months into their personalization test with Dynamic Yield, Stokes has seen a 10% sales increase thanks to real-time, AI-defined recommendations based on user behavior and the best sellers in each category.

4 months into their personalization test with Dynamic Yield, Stokes has seen a 10% sales increase thanks to real-time, AI-defined recommendations based on user behavior and the best sellers in each category.

Reputed for its recommendation engine, Netflix abandoned geographic segmentation and now divides its 93 million global users into 1,300 “taste communities” with similar movie and TV show preferences, making recommendations based on what’s popular in those communities.

U.S. Bank Wells Fargo allows customers to withdraw money at its ATMs using mobile in over 5,000 ATMs.

Westfield is seeking to persuade retailers and brands in its 33 malls – and even competing malls – to share data on consumer behavior and purchasing in order for all to better target potential customers for related sales and promotions.

Westfield is seeking to persuade retailers and brands in its 33 malls – and even competing malls – to share data on consumer behavior and purchasing in order for all to better target potential customers for related sales and promotions.

55% of Americans begin their product searches on Amazon, whose sales represent nearly HALF OF ALL eCommerce sales in the US (44%, actually. eBay is a distant second at 7%) and almost 4% of all US retail sales. These figures will continue to grow in 2018.

  • Amazon will continue to grow its market shares in virtually every market it competes in, at the expense of many retailers. Though Amazon alone is not causing bankruptcies per se, they will recuperate the customers stranded by fallen retailers.
  • Online advertising is one of Amazon’s fastest-growing businesses and Amazon should reach third place in 2018, behind only Google and Facebook.
  • With its acquisition of Whole Foods Markets, Amazon instantly became a serious brick-and-mortar merchant with over 400 stores, simultaneously entering the $770 billion grocery/food sector.IN CANADA
  • Amazon is among the most trusted retail brands in Canada, winning 15 of 23 eCommerce categories while being runner-up in 4 others.
  • When Alexa, Amazon’s popular voice service, launched in Canada, it brought over 10,000 local skills and country-specific features, including integration with Air Canada, TD Bank, CBC, theScore, The Yellow Pages and more.
  • Amazon will continue to grow its market shares in virtually every market it competes in, at the expense of many retailers. Though Amazon alone is not causing bankruptcies per se, they will recuperate the customers stranded by fallen retailers.
  • Online advertising is one of Amazon’s fastest-growing businesses and Amazon should reach third place in 2018, behind only Google and Facebook.
  • With its acquisition of Whole Foods Markets, Amazon instantly became a serious brick-and-mortar merchant with over 400 stores, simultaneously entering the $770 billion grocery/food sector.IN CANADA
  • Amazon is among the most trusted retail brands in Canada, winning 15 of 23 eCommerce categories while being runner-up in 4 others.
  • When Alexa, Amazon’s popular voice service, launched in Canada, it brought over 10,000 local skills and country-specific features, including integration with Air Canada, TD Bank, CBC, theScore, The Yellow Pages and more.

For SEO, expect a Wild West-like land grab for spoken keywords, as voice often provides a single answer instead of multiple results. 2nd will be the new last.

For advertising, the very notion of display advertising will have to adapt as these one-to-one (1:1) interactions may not permit the interruption-based advertising model which has been prevalent for the past 50 years.

For eCommerce, the biggest implications will revolve around in-depth product information being compatible/optimized with voice search and making store inventory available in real-time.

Domino’s skill allows users to order pizza by voice, and even check order status.

Domino’s skill allows users to order pizza by voice, and even check order status.

Lyft’s users can order rides directly from the Amazon’s Alexa device.

Lyft’s users can order rides directly from the Amazon’s Alexa device.

Staples plans to launch a voice-activated ordering service in its “Easy Button”.

Staples plans to launch a voice-activated ordering service in its “Easy Button”.

Walmart made hundreds of thousands of items easy to order by voice on the Google Express eCommerce Platform, soon adding the ability to place orders for in-store pickup through Google Home. Similar agreements are in the works for Target, Costco, Kohl’s, Bed Bath & Beyond, Staples, Walgreens and more.

Walmart made hundreds of thousands of items easy to order by voice on the Google Express eCommerce Platform, soon adding the ability to place orders for in-store pickup through Google Home. Similar agreements are in the works for Target, Costco, Kohl’s, Bed Bath & Beyond, Staples, Walgreens and more.

As image analysis automation becomes standard in mobile devices, consumers will be able to take a picture of an object then search for that exact product or a similar one.

Merchants who integrate this capability into their digital strategy will be richly rewarded. First, their product information management investment will reach new levels of ROI. Second, they will be able to enter new markets based on the quality and multiplicity of the images they provide for their products as language is no longer a barrier to discovery, nor is product name or incorrect or unknown attributes.

With the Kim Kardashian-backed ScreenShop, consumers can easily shop the looks they love on social media, online and on the street by simply taking a picture or screenshot, which is then converted to similar, shoppable items at a variety of price points and retailers.

With the Kim Kardashian-backed ScreenShop, consumers can easily shop the looks they love on social media, online and on the street by simply taking a picture or screenshot, which is then converted to similar, shoppable items at a variety of price points and retailers.

eBay‘s visual search tools allow users to use their own photos or those found online – a favorite blog or website, for example – to run an eBay search for similar products.

eBay‘s visual search tools allow users to use their own photos or those found online – a favorite blog or website, for example – to run an eBay search for similar products.

Pinterest has invested heavily in visual search technology in order to turn the smartphone camera into a search engine for products.

Pinterest has invested heavily in visual search technology in order to turn the smartphone camera into a search engine for products.

Target will integrate Pinterest’s visual search technology – Lens – enabling shoppers to snap a photo of any product, and then find similar items available at Target.

Target will integrate Pinterest’s visual search technology – Lens – enabling shoppers to snap a photo of any product, and then find similar items available at Target.

Houzz’s Visual Match scans photos on the platform and identifies similar products available in the Houzz Shop, which features more than 8 million home decor items.

Houzz’s Visual Match scans photos on the platform and identifies similar products available in the Houzz Shop, which features more than 8 million home decor items.

Though the browser will continue to be an essential interface, consumers and buyers looking for convenience will be using other means to complete transactions. This is made possible by mobile devices, conversational AI, augmented reality and interconnected devices and the data they wield.

Many platforms no longer have an absolute dependence on browser traffic. The improvement of mobile checkout, the ease of purchasing from devices that aren’t PCs, Google’s local inventory and Maps, integrated with social media, etc. will create fluid, user-centric, browserless purchase experiences. Starting in 2018.

B2B vendors are providing their end-users – on-site technicians working on roofs, for example – with apps that provide diagnostic tools, technical information, installation guides, product information, local inventory availability and ordering capacity, directly from the app.

B2B vendors are providing their end-users – on-site technicians working on roofs, for example – with apps that provide diagnostic tools, technical information, installation guides, product information, local inventory availability and ordering capacity, directly from the app.

App-based shopping: As product discovery, whether photo-based (trend #9) or voice-driven (trend #8), local inventory and shopping (trend #4), mobile checkout – account, payment and delivery details (trend #5) – become easier and interconnected, a browserless shopping experience will gain significant momentum as a frictionless means of transacting, replacing the need for a browser.

App-based shopping: As product discovery, whether photo-based (trend #9) or voice-driven (trend #8), local inventory and shopping (trend #4), mobile checkout – account, payment and delivery details (trend #5) – become easier and interconnected, a browserless shopping experience will gain significant momentum as a frictionless means of transacting, replacing the need for a browser.

Commodities and basic/everyday consumer goods, purchases which are easily reordered and replenished, are ripe for auto-replenishment features; milk, lightbulbs, batteries, printer paper, coffee. These goods will actually be easier to replenish without a browser. They are also at the heart of the battle for the digital consumer between WalMart and Amazon.

Commodities and basic/everyday consumer goods, purchases which are easily reordered and replenished, are ripe for auto-replenishment features; milk, lightbulbs, batteries, printer paper, coffee. These goods will actually be easier to replenish without a browser. They are also at the heart of the battle for the digital consumer between WalMart and Amazon.

Thanks for reading.

Contact the authors.

Absolunet

Absolunet helps North-American manufacturers, distributors and merchants bridge the gap between how they sell and what customers expect in the digital economy.

Absolunet is a full-service eCommerce agency and integrator with 180 people obsessed with delivering results, creating ROI-producing (and award-winning) eCommerce experiences since 1999. Absolunet is a certified Magento Enterprise Solution Partner and is Magento’s fastest-growing North-American partner, as well as being a Sitecore “Gold” partner, an InSite Platinum partner and inRiver’s North American partner of the year for three years in a row.

trends@absolunet.com
1-877-979-2276

Sources

1. The Rebirth of Brick and Mortar

 

2. The Consumerization of B2B

 

3. AR In Your House

 

4. “ROPO”: The new Measure of a Retailer’s Digital Success

 

5. Mobile Checkout Overtakes Desktop Checkout

 

6. Machine Learning x eCommerce

 

7. Amazon & The Year of Marketplace Maturity

 

8. Voice Will Change Google/SEO/eCommerce Forever

 

9. Photo Shopping

 

10. Reaching Peak Browser

 

1. The Rebirth of Brick and Mortar

 

2. The Consumerization of B2B

 

3. AR In Your House

 

4. “ROPO”: The new Measure of a Retailer’s Digital Success

 

5. Mobile Checkout Overtakes Desktop Checkout

 

6. Machine Learning x eCommerce

 

7. Amazon & The Year of Marketplace Maturity

 

8. Voice Will Change Google/SEO/eCommerce Forever

 

9. Photo Shopping

 

10. Reaching Peak Browser

 

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