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Commerce has transcended physical and digital channels. The “e” in “eCommerce” is superfluous.

eCommerce revenue now represents 10.7% of U.S. retail sales. With 47% of eCommerce transactions (or 5% of all U.S. retail sales), Amazon has surpassed Walmart as the world’s largest retailer. Globally, online’s share of total retail sales is now 16.4%, with eCommerce accounting for more than three-quarters of overall retail growth. Fueled by digital, retail is, in fact, growing.

In short, eCommerce has transcended physical and digital channels as brands and retailers continue to invest in digital to grow their business while juggling with data, privacy and logistical challenges. The “e” in “eCommerce” is superfluous.

As one of North America’s leading eCommerce agencies with retail and B2B clients such as New Balance, Structube, BMR, Garneau, the SAQ, Birks and SAIL – to name but a few – Absolunet has a front row seat when it comes to digital commerce developments. Here are 10 eCommerce trends to watch for in 2020 — developments that brands and retailers need to consider to bridge the gap between how they sell today and what their customers expect in the digital economy.

01. Too Big to Fail? The Year Amazon Stopped Being Unstoppable

Cracks are appearing in the eCommerce conglomerate’s previously impenetrable armor.

“Brands don’t need Amazon”

In May, Amazon surpassed Walmart as the world’s largest retailer. It later became the world’s most valuable public company. Jeff Bezos is now the world’s richest person. In less than 25 years, Amazon has disrupted books, DVDs, movies and TV, groceries, web and cloud hosting, shipping & logistics, home electronics and more. They are now poised to take on Fedex, UPS and the United States Postal Service as a delivery service, as well as healthcare.

The days of Amazon breaking into or simply breaking industries without supervision or oversight may be numbered. As anti-Amazon sentiment grows, talks of antitrust issues get louder and brands begin to question the value/cost of working with Amazon.

Amazon's Revenues 2018
Quote

We believe many strong apparel (and even non-apparel) brands will continue to avoid or curb their relationships with Amazon in the future. Brands don’t need Amazon.

Jefferies analyst, Randy Konik

Nike

In November, Nike announced it was ending its association with Amazon and removing all Nike products from the platform.

Shopify

The Canadian eCommerce platform is becoming an anti-Amazon option that empowers its 1 million merchants to take on Amazon with a growing feature set that includes a $1B fulfillment network, chatbots, POS systems, AI-based returns optimization, personalization and more.

DeWalt

DeWalt power tools sold on Amazon often include a branded image listing authorized resellers. The image specifies “DeWalt does not guarantee the quality of authenticity of products purchased from non-authorized resellers on Amazon”.

Man wearing a suit standing on stage with the Walmart logo behind him - Absolunet eCommerce Trends

Walmart

In 2017, Walmart reportedly recommended tech vendors move away from AWS-powered cloud apps. "It shouldn’t be a big surprise that there are cases in which we’d prefer our most sensitive data isn’t sitting on a competitor’s platform.”

An aerial view of the United States Pentagon building - Absolunet eCommerce Trends

JEDI Contract

The US Department of Defense awarded a controversial $10 billion Joint Enterprise Defense Infrastructure (JEDI) contract to Microsoft despite Amazon Web Services (AWS) being considered the clear front runner.

A pink purse with gold clasps and an upside down Gucci logo - Absolunet eCommerce Trends

Counterfeits on Amazon

The AAFA, an association that represents over 1,000 brands, including Adidas, Gap, and Target accused Amazon of creating a black market of counterfeit goods.

02. Malls Begin Their
Comeback

The suburban mall is undergoing an urban revolution.

Work. Live. Play.
Malls are being reborn as city centers.

Digital continues to reshape brick and mortar as a new breed of malls promote interactions, convenience and experiences over shopping. From coworking spaces to entertainment, destinations that put “experience” and “work / live / play” at the heart of their mission will replace the dated, outgoing malls of the 20th century.

Digitally-savvy malls are becoming foodie destinations as chef-driven food-halls, sushi bars and premium coffee shops now represent 25% of the square footage in Class A malls. Now located in malls, office space, gyms and schools offer proximity, convenience and experiences.

A woman wearing a yellow suit and cool sunglasses. She is pointing to the side. There is a yellow background, the same color as her suit - Absolunet eCommerce Trends
Quote

In this day and age, you’ve got to create a different experience.

Douglass E. Karp, president of New England Development


Quote

Shopping Malls Aren't Dying -They're Evolving

Greg Petro

Six people in a room, collaborating. One person is standing on a ladder and writing the word Google - Absolunet eCommerce Trends

Google

Google will move thousands of employees into L.A.’s Westside Pavilion, creating a vibrant transit hub and an instant increase in highly qualified foot traffic.

A brick outdoor shopping center with a green lawn. People are milling about and sitting on the lawn - Absolunet eCommerce Trends

Palisades Village

L.A.’s Palisades Village hosts yoga classes and live concerts. Concierges can arrange family picnics with a free blanket service.

The outside entrance of Place Ste-Foy, a shopping center in Quebec - Absolunet eCommerce Trends

Place Sainte-Foy

The Quebec City Mall measures people like Google measures clicks thanks to “computer vision” powered cameras, traffic counters and cross-referenced POS data. They measured the actions, movement and purchase behavior of every mall visitor during a pilot project with the Retail Innovation Foundry, Ivanhoe-Cambridge and Galilei.

A modern coworking space with multiple people sitting at desks, couches and a bar - Absolunet eCommerce Trends

Coworking x Malls

Industrious’ Scottsdale, AZ coworking space (in a mall) filled up in 2 months instead of the usual 9. The co-working company has expanded into the suburbs in Virginia, California, New Jersey, and outside Atlanta and Chicago - in some cases, replacing former Saks Fifth Avenue and Barney's locations.

03. Smile! Your In-Store Behavior Is Linked to Your Online Data

Merchants getting closer to true omnichannel by using facial recognition and device tracking

Physical retailers are bridging the gap between online and in-person data collection with cameras, facial recognition, tracking beacons, Point-of-Sale (POS) data and traditional digital measurement and analytics.

Just as online retailers can understand the movement of users on their site, brick-and-mortar locations use WiFi, sensors, Radio Frequency Identification (RFID) beacons and more.

The goal is to identify high-traffic areas in the store, overlooked products, dwell time - even product movement from rack to fitting room.

From real-time merchandizing to making data-based decisions about physical interaction management and store planning, the age of real-world data is upon us. Combined with web, mobile and social data, in-person data collection and analytics brings retailers much closer to a truly 360 degree customer experience.

A woman looking through clothes on a rack - Absolunet eCommerce Trends
Quote

Getting shoppers to volunteer their information is a matter of offering a sufficiently compelling experience

Hai Hu, Retail Deep founder + CEO

The inside of an empty Bonlook glasses store - Absolunet eCommerce Trends

BonLook

Eyewear retailer BonLook knows that 86 glasses-wearing, 20-to-30-year-old females passed by its Quebec City store between noon and 1 p.m. on Friday. 12 entered the store. 2 bought a pair of glasses. Conversions increased overnight when they changed their storefront display.

Inside a mall, three people are walking by and illustrated squares around their head show that their movement is being tracked - Absolunet eCommerce Trends

Ivanhoe Cambridge x Retail Innovation Foundry

Retailers La Vie en Rose, BonLook and Tristan took part in the Retail Innovation Foundry’s pilot project in Quebec City’s Place Sainte-Foy mall, which combined data from traffic counters, retailers’ POS, and third party Anonymous Video Analytics (AVA) to map the in-mall sales funnels, including the classification of passerby traffic based on attributes like estimated age and genders, thanks to AI-powered facial recognition cameras.

The outside of an Amazon Go store - Absolunet eCommerce Trends

Amazon

Amazon Go stores are using computer vision to recognize faces and products in order to provide a truly frictionless - with no actual checkout - purchasing experience. Combined with mobile and browsing data, the retailer is equipping itself to make better, more personalized recommendations across platforms.

Retail Deep facial recognization

Retail Deep

Retail Deep replaces loyalty cards with facial recognition thanks to AI-enabled in-store cameras, sending notifications and relevant recommendations to staff when known customers arrive. No need for loyalty “cards” as they have already been identified by face. This Canadian startup has found success in the Chinese market where facial recognition is widely used.

04. The Shipping Wars Begin

Fast & free shipping will be an option for every merchant.

The company that brought consumers free shipping, then free 2-day shipping, next-day and now same-day shipping (Prime Now!) will make it possible for competing merchants to offer the same, by becoming their carrier.

2020 will be a tipping point for “fast and free shipping” as Amazon’s logistics and shipping business aims to disrupt the courier and postal industry; the eCommerce giant will move from client to competitor for virtually every major carrier. After the US Postal Service, UPS and FedEx, consumers can expect to see Amazon’s logo on vehicles delivering parcels.

A closeup of a delivery person handing a box to another person - Absolunet eCommerce Trends
Quote

Certain major customers have recently begun diverting additional volume (...) by in-sourcing the last-mile delivery.

United States Postal Service

A FedEx airplane - Absolunet eCommerce Trends

FedEx

FedEx dropped Amazon as a customer after volume increased 24% but revenue per package went down 7%.

A fleet of hundreds of Amazon Prime trucks - Absolunet eCommerce Trends

Amazon

Amazon, who shipped over 5 Billion parcels with its Prime service in 2018, now has 42 planes in its Prime Air Fleet and has ordered 100,000 electric delivery vans to deliver its packages and those of “fulfillment by Amazon” (FBA) clients.

usps delivery at home

USPS

After years of being Amazon’s main delivery provider, USPS moved 47 million fewer packages than the previous year (-3.2%) in Q2 of this year.

05. Consumers Begin Selling Their Own Privacy and Data

The Rise of Privacy by Design + consumers choosing which brands can access their information.

Consumers have been trading data for access (social media) and rewards (loyalty programs) for decades.

Consumers know their data (in-store movement, online browsing, geo-location) is being used. And for the first time, they are coming to the bargaining table, ready to negotiate. Brands and merchants will move from trying to capture as much user data as possible to engaging in an exchange of value.

As the volume of personal data multiplies and as privacy awareness grows, a new type of service and options is expected to grow: privacy by design, privacy as an option and, interestingly, consumers getting “paid” to share their data. The challenge for brands and merchants will be to find the balance between acquiring, using and storing data while maintaining the “as much as we need / as little as possible” balance.

Quote

Help us help you

(by letting us collect and use your data)

- Brands

Show me the money!

- Consumers

The outside of an Amazon go store with people walking by - Absolunet eCommerce Trends

Amazon Go

In an Amazon Go physical store, every single action a customer takes can be associated to them - a price that consumers accept in exchange for a novel, convenient and frictionless shopping experience.

The outside of a Costco store - Absolunet eCommerce Trends

Costco Membership

Costco’s membership and credit card programs provide detailed visibility into customers’ purchasing patterns across channels. For Costco members, this data exchange is a small price to pay for Costco’s convenience and prices.

Women shopping with illustrated squares around their heads to show their movements are being tracked - Absolunet eCommerce Trends

RetailDeep

RetailDeep uses AI-enabled cameras to recognize customers as soon as they walk into participating stores, providing staff with past purchases and product recommendations, essentially replacing loyalty “cards” with the customer’s face. RetailDeep has found success in the Chinese market where facial recognition is widely used.

A hand touching a mobile device to a small white device - Absolunet eCommerce Trends

Apple’s Privacy-Based Credit Card

Apple’s Credit Card promises privacy; purchase data won’t be used for advertising, sold to third parties, or anything else. Accessible only to iPhone owners, the Apple card also comes with a cash back rewards program.

A white Jaguar four door car entering a checkpoint - Absolunet eCommerce Trends

Jaguar Land Rover

Jaguar Land Rover will provide cryptocurrency credits to drivers who share data on potholes and traffic congestion with navigation providers and local authorities while driving. Credits can be redeemed for rewards such as a cup of coffee, toll payments, parking fees, or even electric-car charging. JLR began testing the program in Shannon, Ireland.

Sephora

Sephora’s Colour IQ device scans a customer’s skin and identifies their skin tone in order to recommend products that perfectly match a shopper’s complexion. The information is saved to the consumer’s profile to help personalize all future interactions across channels.

06. China’s Rising Digital Influence

The world leader in digital commerce will unleash its shoppers and technologies on the world.

42% of the world’s eCommerce transactions happen in China, up from 1% in 2005 - a market larger than the U.S., the U.K., France, Germany and Japan combined. In fact, at $1.94 trillion, it is three times bigger than the US market. Their mobile-savvy population has enabled payment, ordering, fulfillment, automation and personalization technologies to develop at breakneck speeds. Whereas 65% of US mobile users are still reluctant to use mobile payment, China boasts a 100% adoption rate.

And now, Chinese consumers and technologies are expanding beyond the Great Wall.

As Chinese tourism booms, tourists bring their devices, digital habits (QR code payment!) and expectations with them, encouraging merchants worldwide to adopt and integrate Chinese technologies, platforms and interfaces, fast-forwarding many merchants’ degree of digital sophistication. Combined, Wechat Pay and Alipay have 1.7 billion users, 10 times more than Apple Pay.

Quote

In 2020 it is forecast that Chinese consumers will transact $45 trillion through mobile payments, by which time the county will be pretty much cashless.

Ian Fraser, Raconteur.net

A man and woman walking together with linked arms. The man is carrying shopping bags - Absolunet eCommerce Trends

Alipay in Europe

Chinese shoppers who used Alipay spent €1,273 ($1,403 USD) in French stores during Golden Week, 15.5% more than the average US shopper will spend on gifts, travel and entertainment for the entire 2019 Holiday season ($1,284 USD).

Hands holding a phone that is taking a picture of a QR code with Chinese text above it. In the background, the WeChat Pay logo - Absolunet eCommerce Trends

WeChat Pay

China’s most popular payment platform with nearly 1 billion active monthly users has partnered with Visa, MasterCard, American Express, Discover and JCB to allow foreign visitors to link their credit cards to WeChat Pay. This marks the first time that foreign visitors will be able to use international credit cards to pay with WeChat Pay in China.

A man giving a talk on stage in front of bright neon lights - Absolunet eCommerce Trends

Alibaba

Singles Day 2019, the Chinese eCommerce giant’s massive 1-day event, was headlined by Taylor Swift and broke their previous sales record, selling $38.3 billion in 24 hours (approximately 1% of all retail revenue on earth for 2019).

A mobile phone with a QR code and the Alipay logo being held up next to a receipt printer - Absolunet eCommerce Trends

Alipay for Foreigners

Foreign tourists in China can finally use Alipay, previously available only to consumers with a Chinese bank account and local mobile number. The “Tour Pass” program registration requires a foreign phone number, a visa and a credit card, after which tourists can book a taxi, buy a train ticket, book a hotel, etc. with their device.

07. The Year of Distribution Centers

Fulfillment, order management and logistics are the new battleground for the digital consumer

43% of consumers expect free shipping on their orders, with the same proportion expecting to receive their package within 3 days. Retailers and brands, be they B2B or consumer-facing, are beefing up their delivery muscle with the help of digitally-focused distribution centers to meet increasing pressure on rapid fulfillment.

By having merchandise available in strategically-placed, robo-staffed and courier optimized warehouses, merchants are now competing on simplicity of experience, process, and functionality. Warehouse construction has grown 29% annually for the past 5 years, much of it attributable to eCommerce and fulfillment.

SAIL

The Canadian sports superstore’s new 80,000 sq./ft. distribution center was designed to serve digital consumers and its network of stores with equal speed, efficiency and simplicity.

structube distribution center in Laval

Structube

The Canadian leader in contemporary furniture built a distribution center measuring almost 700,000 square feet in order to continue its impressive growth, the majority of which is being driven by digital transactions.

FedEx

FedEx launched FedEx Fulfillment, a multi-channel e-commerce fulfillment and inventory management platform aimed at small and medium-sized businesses who can store their products at 130 FedEx warehouses in the U.S. and Canada. As items are ordered from stores, sites and marketplaces, FedEx will package and ship them to customers in boxes that feature the seller’s branding and logo.

Shopify

The eCommerce platform plans to integrate seven warehouses in 2020 and is investing $1b over five years to build the Shopify Fulfillment Network to help its 1 million merchants fulfill orders, warehouse and deliver their merchandise faster.

UPS

eFulfillment provides a nationwide order fulfillment service that smaller businesses would struggle to build on their own. UPS eFulfillment features an online portal where merchants can create shipping labels and track orders. UPS then handles the shipping and returns for a monthly fee.

08. Reaching Peak Ads

Brands and retailers start looking beyond the Google/Facebook duopoly

“The new dot com bubble is here: it’s called online advertising”

In 2018, $273b was spent on digital ads globally, 39% of all advertising in the world. Combined, Google (Alphabet) and Facebook take in 61% of all digital advertising spend in the US, monetizing the 12 hours the average American spends interacting with screens every day. Analysts expect Google’s online ad revenue to increase 22% in 2019, as merchants continue to shift their budgets to digital.

Americans see between 4,000 and 10,000 ads daily (up from 500 in the 1970’s) and the “interruption model” is reaching a saturation point, or “Peak Ads”.

Overwhelmed consumers are becoming harder and more expensive to reach through traditional, interruption-based, pay-per-click/view campaigns.

Non-traditional, more native and embedded brand exposure is becoming increasingly common. Brands and merchants are creating content and experiences that get talked about - simultaneously gathering data and creating direct connections with consumers, instead of relying on the “walled gardens” of Amazon, Facebook and Google.

Man wearring adidas shoes

Adidas

When Adidas’ Latin American AdWords campaign accidentally stopped working, sales and traffic remained unchanged.

Procter & Gamble

P&G’s Bare Skin chat series of video content, featuring James Corden, has garnered hundreds of millions of views and caused an 86% increase in branded searches and increased sales.

Wendy’s Keeps Fortnite Fresh

Known for their social media presence, Wendy’s created an avatar in the very popular Fortnite game to interact with its publics and drive brand messaging about how they “hate frozen meat”.

09. Delivery In-Car, In-Garage and In-House

Merchants take delivery into people’s vehicles, households, and appliances.

“Closer to home is becoming IN your home.”

After “free”, two-day, one-day and same-day shipping comes shipping directly into the trunk of your car / in your garage / in your refrigerator. As the shipping wars escalate (Trend #4), carriers and merchants are looking to increase the convenience of deliveries by going into people’s homes and cars thanks to remote access technology.

Aside from convenience, these methods of delivery aim to make grocery shopping easier/possible/safer (avoiding thawing or melting ice cream, for example) as well as reducing package theft which, in turn, may reduce the cost or anxiety of delivering/receiving valuable items, such as consumer electronics or jewelry.

121 Parcels/Year

The average US household receive a parcel every 3 days.

Walmart

Using smart-entry technology and wearable cameras, Walmart InHome Delivery enables personnel to deliver online grocery orders right to the customer's refrigerator. Deliveries can also be made to a customer’s kitchen or garage.

Amazon

With Amazon’s Key App, users can remotely unlock their car and/or garage once an Amazon delivery person approaches. For in-garage or in-home deliveries, customers use the Cloud Cam to monitor the drop-off.

10. Hello, Interactive Email

The inbox is the new browser

Your emails will become interactive webpages

Beyond gifs and screenshots, the inbox is becoming dynamic and legitimately browsable

Consumers and buyers will do everything from choosing product sizes to browsing carrousels, opening menus, choosing colors, leaving ratings and reviews, etc. - without ever leaving their inbox, the email or mail app. Brands and merchants can make emails significantly more interactive, browsable and actionable, including media rich formats like video.

Interactive emails makes it possible to dynamically update emails, which means it’s less likely that you’ll be faced with outdated information just because it’s contained within an old email - like delivery status, for example.

promotions in gmail mail box
Gap Brand email with interactivity in mailbox

Gap

Gap’s mails include a fully browsable menu directly in the inbox, letting consumers choose exactly where they want to go next.

home depot interactive email

Home Depot

Home Depot uses interactive mails to send product review requests: customers rate (1 to 5 stars) and type reviews into the email.

Gmail vs. Outlook

The tipping point for interactive compatibility came when Google announced that AMP and JavaScript would be supported in Gmail apps. Similarly, Microsoft announced AMP support for Outlook.com and has turned Outlook into a Progressive Web App (PWA).

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