Happy new year to all our readers!
2014 was an exciting year for retail advancements and shopping, and 2015 promises to be even better. The industry is ripe for radical innovation. Businesses are on a roll right now from a fruitful holiday season. Online sales over the holidays saw an increase of 15% from 2013. The dollar amount spent between November 1 and December 8 was close to $35 billion. An interesting trend that emerged this holiday season was increasing amounts of transactions completed on smartphones. From December 2-14, the share of sales completed on a smartphone jumped from 8% in 2013 to 14% in 2014.
This indicates an important trend in shopping habits – increasing use of and reliance on emerging technologies. Brands and retailers are embracing the omni-channel imperative in making shopping processes more seamless and product information available more consistently across channels. Connected consumers expect relevant deals to be presented to them irrespective of the channel in an always-on world.
Brands and retailers need to become technology companies in this new age of pervasive commerce. Technology is not just something that facilitates processes. Today, it is what defines companies and empowers them to compete in an age where shopping is becoming pervasive and ubiquitous. The trends from this year’s holiday season indicate the same. Consumers are adopting technology and new methods of shopping that make the process more fun and convenient for them. Are businesses ready to provide that experience?
2014 saw the introduction of many innovations such as location-based services (beacons, geo-fencing), increased sophistication of mobile commerce, wearables, and the possibility of getting deliveries by drones. Companies are also starting to harness the power of big data to provide more personalized product offerings. What can we expect from these technologies in 2015?
Even as online commerce keeps gaining momentum, beacons have the potential to greatly influence the in-store experience. It is a permission-based technology where consumers need to have an app installed and push notifications turned on in order to get messages about relevant product offers when they are in a store. The possibilities are endless here. Being a permission-based service mitigates the threat of invasion to privacy. What retailers need to do is convey their value proposition effectively to consumers. Why should consumers install that particular app? They need to know that they can get relevant offers when they are in-store. These offers could be customized according to a consumer’s location in the store and their shopping and browsing history with that retailer.
Since Apple launched the iBeacon in late 2013, stores like Macy’s and American Eagle Outfitters have employed the technology in many stores. But it has still not seen the widespread adoption that was anticipated. There are some technical kinks like increased smartphone battery usage that need to be ironed out, but the primary focus should be on communicating the value of the technology through experimentation and usage.
Location-based services have the potential to make the in-store experience a personal and interactive one for the consumer. Wouldn’t you like it if you were in a store, and you got a personalized discount for a jacket that you were looking at online? Given that you are right there, the chances of you trying it on and buying it are certainly higher. Same goes for geo-fencing. Geo-fencing technologies transmit over a longer distance than Beacons and can be used to send notifications to consumers while they are still in the parking lot.
The wearables market is also ripe for widespread adoption. According to this eMarketer report, nearly a fifth of US Internet users intend to buy a wearable device within the next 12 months. With the Apple smartwatch slated for release in 2015, this is a market to watch out for. Wearables have had an interesting trajectory so far. The adoption curve isn’t dramatic but that’s what is slated to change in 2015. Wearables could show some of the same functionality as smartphones.
Wouldn’t it be great if beacons send personalized messages to wearable devices like they do to smartphones? The convenience of having a device strapped to your wrist opens up many possibilities like scanning products for detailed information, making payments, and getting personalized offers. Basically everything a smartphone also does, but with the convenience of having it on your wrist.
Supply chain logistics also saw major improvements in 2014. “Buy online and pick up in store”, “Same day delivery”, “Sunday delivery” have all become widely adopted by many retailers. The focus has been on making shopping seamless and convenient. Consumers get the convenience of window shopping online and getting the product when they want. It sure was great to see last minute gifts delivered on a Sunday this holiday season.
Amazon and Google have been testing drones for a while now. The FAA is expected to make a decision about commercial drone usage later this year. If it does get approved, Amazon has promised to make 30 minute deliveries a reality. Wouldn’t that be nice?
2015 is sure going to be an exciting year in terms of innovation. Technologies introduced in 2014 will see their full potential realized. Companies will harness and optimize the power of big data and location-based services to provide truly exceptional and personalized shopping experiences as shopping becomes pervasive. Hopefully, 2015 will see the end of showrooming and webrooming as threats, and the online and in-store experience will become extensions of each other.
We are also excited to hear the predictions that come out of the NRF Big Show next week. We will be in attendance and share our thoughts. Stay tuned! Here’s to 2015 and the proliferation of pervasive commerce.
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