The New Year bells have rung, the champagne has been quaffed – now back at our desks, thoughts are turning to the year ahead. What does 2016 hold for online and multichannel retailers? We asked some key industry figures for their predictions.
Giulio Montemagno, SVP and GM International at RetailMeNot, on the continuing growth of mobile
“Mobile will continue to be a driving force in retail and marketing in 2016, as consumer expectations rise. Shoppers are tipped to spend £22.7 billion on smartphone, smart watch and tablet devices next year, with new technologies such as beacons and mobile payments creating opportunities for marketers to engage shoppers while they are on the go or in-store.
“With shoppers expecting an increasingly mobile shopping experience, retailers could unlock £7.8 billion in additional sales next year by creating a more mobile-friendly shopping experience. Research we commissioned shows that slow and poorly optimised mobile websites remain a common gripe, while poor connectivity and a lack of mobile payments in-store, can deter shoppers from making purchases.
“In 2016, consumers will be looking for retailers to up their game. Our research shows that over two-fifths (43%) of consumers would spend more in mobile friendly stores that offer services such as mobile payments, loyalty programme, reservations, product availability checks, and location-based promotions. Retailers must take these expectations seriously next year if they are to capture the potential sales on mobile. With consumers increasingly confident with the idea of buying on mobile; the onus is on retailers and marketers to lead the charge towards creating a more mobile-friendly and mobile-first shopping experience, rather than playing catch-up with consumers.”
Naveen Aricatt, UK manager and legal expert at Trusted Shops on the need to tackle social proof
“In 2015 there were a whole host of stories detailing the exposure of fake reviews being posted online on sites such as Amazon and Tripadvisor. Businesses were reprimanded for sabotaging rivals with false feedback and even omitting negative reviews and paying for Facebook likes. For retailers this should be a serious concern, particularly given that the Competition & Markets Authority reported that £23 billion of UK consumer spending per year is being influenced by online reviews.
“To counteract this fraudulent activity and future-proof the business, retailers must work with trusted third parties to manage the review and feedback process. This will ensure that reviews only come from genuine customers with well-informed feedback, particularly when retailers are using closed review platforms to ensure customers are verified before a review can be left. Review scanners can also be used to detect abnormalities in feedback so review moderators recognise them as suspicious and manually approve them before publishing. Doing so, the brand can proactively respond and more quickly identify any false posts. To remove some of the anonymity in reviews, retailers can also connect reviewer profiles to social profiles and add a layer of authentication that deters many people from posting fake comments.
“By educating customers on the value of their feedback and through demonstrating proactive steps to improve the customer experience, retailers will be able to provide a welcome boost to consumer confidence. However, this will depend upon the integrity of the business and demand that retailers are acknowledging negative feedback and acting upon it, rather than simply removing it from a customer’s view.”
Ralf Ohlhausen, business development director of the PPRO Group, on how consumers and retailers will change the way we pay this year.
“2016 is set to be a defining year for mobile payment providers. It looks as though Apple Pay is planning a major European launch in 2016; an event which could turn the fragmented mobile payment world upside down. While setting up a unified payment system overnight would be virtually impossible, Apple Pay will endeavour to push this forward, especially as its competitor, Google is also pushing for the first place in the mobile payment space. In 2016, we will also see mobile payments become less smartphone-dependent. Instead, new technologies including smartwatches, bracelets and even rings will give us the ability to provide payment options.”
“In 2016, tokenisation and biometric authentication will have a strong influence on the payment industry. Tokenisation is an extremely interesting method of securing credit card data, as the credit card numbers are substituted by tokens. While the original number is stored securely on a tokenisation server, only the tokens are used throughout the payment process. This means that no harm can be done if the tokens are stolen, and therefore makes it a secure process.
Due to the lack of widespread tokenisation standards, this technology is still in its infancy, but despite this, we anticipate a shift in the market throughout 2016.
“When it comes to authenticating payment processes, there are several new inventions in the pipeline for 2016. The most recently used methods include password, PIN, and fingerprint, and these all have one thing in common; they are weak so two-factor authentication is increasingly used to improve security. User-friendly methods—including, for example, new biometric processes like voice recognition, keystroke detection, finger vein scanners and pulse recognition — are set to become increasingly significant and set to increase both security and convenience.”
André Malinowski, head of international business at Computop on digital currencies, and growing payment choices.
Digital currencies will come of age
“They’ve been around for a while now, but transaction volumes for digital currencies like bitcoin are steadily rising. Today around 100,000 merchants and service providers accept bitcoin – a peer-to-peer digital currency that eliminates transaction fees for retailers and guarantees payment. Bitcoin is appealing from a consumer perspective too – they can store bitcoins in their digital wallet, use them as cross-border cash for global online payments, or make peer-to-peer payments. And all in the knowledge that their personal data is protected and stays private.
“With central banks now exploring the use of cryptographically protected digital money and bitcoin transfers to enable cheap, relatively fast and secure inter-bank transfers, this may well be the year that digital currencies gain more widespread acceptance.”
Consumers will make more – not less – payment choices
“In the last few years we’ve seen a plethora of new payment innovations emerge – NFC, wallet, EMV cards, mobile payment apps. It seems like today’s consumers have never had so much choice when it comes to payment. But what’s also clear is that they will continue to make more and different choices about how to pay, depending on what the transaction is, and whether they’re conducting it in-person or online – and where in the world they live.
“And that may explain why, in 2015, we saw the emergence of two distinct breeds of online retailers: smaller companies and new market entrants who typically look for a full service e-commerce platform that incorporates a web shop, payment and logistics/fulfilment – and larger more established players who look for as much diversity as possible, picking acquirers and vendors appropriate for each and every market and channel they operate within.”
“Merchants who are looking for e-commerce success will need to create an international strategy. Expanding ecommerce activity across borders involves more than translating websites and establishing efficient logistics. It’s also vital that merchants offer shoppers their preferred local payment method. Asia, Eastern Europe and Latin America are currently the most interesting markets for European online retailers, and as card penetration tends to be lower there, it’s important that providers know their way around alternative payment methods in these regions. Merchants should consider which markets are particularly suited to international strategies and simulate potential market launch models with partners such as payment service providers.”
John Watton, EMEA marketing director at Adobe on customer experience, data and analytics
It’s all about experiences
“Marketing in 2016 is all about experience. In this digital age, your brand is now the sum of your customer’s experience. Yes, it’s about giving what your customers want, but it’s also about standing out from the crowd and getting noticed by being entertaining. Creating compelling experiences in whatever environment consumers are in, be it physical or digital, is the key to success in 2016 as the quality and originality of marketing content becomes as important as how it is delivered. The technology to target customers anywhere, anytime, anyplace is now widely used, so what else can brands do to stand out from the crowd? Expect to see more funny, shocking and emotional content from brands in 2016 as they all vie for our attention.”
Automated technology used for real-time insight
“The value of data to build more personal relationships with customers is undisputed. But if you think about the proliferation of devices there is an increasingly overwhelming amount of information to process. In 2016, more brands will realise that testing new content and campaigns with live consumer traffic will be near impossible to manage. Growing use of automated technology will make this process continuous and consistent, allowing marketers to apply insight and buy and sell digital ads in real-time. For businesses to gain competitive advantage, tools need to be agile yet powerful enough to deal with the complexity and breadth of the data.”
Predictive analytics will be the #1 skill in demand
“We are reaching a point where most organisations have moved out of diagnostic analytics and into the predictive realm. We’re past the point of not collecting enough data – it’s now about gaining insights and taking action. We have already seen the number of permanent IT jobs looking for ‘predictive analytics’ skills jump 241% in the past two years, according to ITJobsWatch[i], and I expect this skill to be in even bigger demand in 2016 as companies take this capability to the next level. It’s the new competitive advantage.”