What does 2013 hold for ecommerce retailers?
If 2012 was a year of slow but steady growth in UK online and multichannel commerce, then will 2013 simply be a year of more of the same? Today we bring you opinions from a variety of voices in the UK industry, who put an emphasis on social, mobile and logistics for the year ahead.
Tony Matthews, head of ecommerce, supply chain solutions at arvato UK & Ireland
“Throughout 2012, we saw retailers’ supply chain strategies squeezed on two fronts. Economic pressures have driven the need for cost-cutting, while growing consumer demand for quicker and more flexible deliveries has created a need to adapt and invest in new fulfillment options.
“It’s a twin pressure that is already leading ecommerce supply chain models to move towards more centralised stock management – something which we are going to see a lot more of in 2013.
“The rise of multichannel retailing has created unique pressures. If you’re selling via multiple channels – such as eBay or Amazon Market Place – in addition to your own online stores, the last thing you want is for a customer to be told a product is sold-out on one platform when they could access it from another, or to run out of stock because people are buying simultaneously through different channels. Retailers have therefore realised that by having a single inventory, which all sales channels are plugged into, that problem can be avoided.
“The natural evolution of this is a growth in drop shipping where a supply partner holds the stock centrally. When an order is received, it gets picked, packed and shipped directly from the warehouse to the consumer, removing the need for retailers to physically hold any stock themselves. For brands it allows a greater penetration into marketplaces but critically for retailers it enables faster delivery times and removes the need to invest significant sums in stock and warehousing, whilst allowing them to offer a wide range of products.
“With the high street continuing to suffer and a new breed of m-commerce customers demanding greater flexibility and responsiveness from retailers, 2013 could well see an influx of new etailers who, using this model, are able to offer a wider product range and a faster turnaround for deliveries, benefitting brands’ multichannel retail strategies and appealing to consumers alike.”
Adam Stewart, marketing director, Rakuten’s Play.com
“In any retail business, the customer is central to success, and mobile and social uptake provides retailers with the opportunity to engage with consumers on a more personal level. In the year ahead, innovating the ways in which we build brand loyalty in an increasingly multichannel retail environment will be key, as well as ensuring the platforms we offer are seamless.
“As an industry we need to refine the shopping experience online, and engage consumers with more tailored campaigns and offers to continue building consumer confidence in mobile as a device to make transactions and also utilise social shopping platforms to give the next level of recommendations as social shopping becomes entertainment.”
Rakuten singles out six key trends that it says will fuel ecommerce growth in 2013.
Bringing a personal touch to loyalty
Some things in retail haven’t changed; the secret to success is still engaging customers to keep them coming back to your brand and recommending it to their friends. Social channels have made it possible for retailers to not only enter into personal dialogue with fans but reach friends of fans too. However, when it comes to driving return on investment from loyalty in 2013, engagement will be the buzz word, rather than fan count. Ultimately it’s not the number of fans that makes a difference, but how vocal they are.
Getting a second opinion before committing to a purchase is nothing new, but now rather than taking a friend shopping you can take your entire social network with you. Services such as Pinterest and The Fancy are quickly becoming popular social media tools, allowing users to organise their favourite items into themed collections that they can share with friends. Not only does this fuel personal expression in shopping, but other shoppers will use these collections to inform their own purchase decisions. Retailers must take note and we expect curated collections to be a key trend in 2013.
Changing the way we pay
The choice of payment methods that retailers can offer to consumers seems to be constantly evolving and it’s often make or break in a purchase decision. Alongside the growth of mobile transactions, NFC, and contactless payment methods could dramatically change how people pay for products. Services like PayPal and Apple’s iTunes have already begun to centralise payments on mobile, but the next step will be services such as Square that offer sellers the ability to receive card payments with their existing smartphone and a simple plug-in device. This freedom to accept payments either online or in-store will be invaluable for merchants of all sizes in the coming years.
The rise of the specialist retailer
Whether it’s brick-and-mortar or online, there has been a trend in recent years for consumers to move back to specialist retailers that can often offer a better-informed and personal service. Moving away from mass-market retailers, to specialist retailers that cater to a specific range or area of products, be that fashion, jewellery, or photography equipment.
Increased video use
One of the reasons video wasn’t incorporated as frequently into ecommerce websites in the past was that it would significantly slow down the site, and this is still a concern for many. However, as internet speeds become faster across the world, retailers will cease to be restricted by broadband rates and will have the freedom to use increasingly rich media content. We expect video reviews and the virtual un-boxing of products to become more prevalent across retail sites in 2013.
Increased mobile integration
Whether it’s a mobile-optimised site or dedicated app, most retailers are coming to terms with the need for a smartphone or tablet solution. However, mobile can offer much more than this, in the next year we expect to see more integration in-store, through the use of apps, QR codes and augmented reality experiences as well as shifts in the payment tools available from NFC to Apple’s Passbook.
Global ecommerce sales will pass the $1.25 trillion mark in 2013, according to IMRG. As online retailers prepare to take advantage of this growth opportunity in the new year, a new survey of 110 UK retail brands conducted by SLI Systems shows improving conversions (60%) and attracting more customers to their websites (55%) continue to be their biggest challenges. As such, retailers plan to address these challenges by improving their site search functionality (22%) and SEO efforts (17%), solidifying their mobile commerce strategies (15%), and upgrading or changing their eCommerce platforms (14%). These results are very much in line with how retailers around the globe responded, with 18% saying they plan to upgrade or change their ecommerce platforms, 18% said improving their site search functionality was a top priority, 17% said they would improve SEO efforts, while 15% said solidifying their mobile commerce strategies would be a key focus.
Additionally, in order to ensure website visitors can more easily find the information and products they are looking for, UK retailers plan to focus on enhancing merchandising capabilities (50%) and use of refinements (46%), adding rich auto complete (45%), and A/B testing (28%).
Mobile commerce will double in 2012, according to Internet Retailer, and this growth is predicted to continue in 2013. UK retailers who took part in the SLI survey support this prediction, as 41% plan to institute a mobile strategy in the New Year with 22% planning to build a mobile app. Of the retailers that already have a mobile site, 24% said they will take measures to improve the user experience and increase sales by enhancing site search functionality on their mobile sites.
Add your voice to the debate. Tell us how you think ecommerce will change or develop in 2013 by leaving a comment in the box below.