With yet another tumultuous year behind us, we look ahead at the ecommerce trends that will have the biggest impact on retail in 2017.
If retailers are going to develop a successful ecommerce strategy this year, they must have awareness of the latest ecommerce trends and plan carefully to avoid falling behind the ever-accelerating competition.
Our top five ecommerce trends for 2017 are:
1. The subscription based model
Ecommerce subscription models are on the rise. While subscription based companies such as Netflix, Glossybox and Graze are not a new concept, more and more retailers are set to jump on the bandwagon offering subscriptions for specific products or product ranges. With the introduction of the Amazon’s dash button in the UK this year, the retail landscape is likely to be re-shaped.
The benefits of such subscription services are manifold. Besides easy calculations of customer lifetime value and revenue forecasting, decreased basket abandonment and easy identification of buyers, dash buttons also facilitate retention once a customer has signed up. However, subscription models can also represent a danger to retailers and brands as customers are less likely to react to promotions or switch brands. It is therefore crucial for brands to act as first movers and bind as many customers as possible to their products and services.
2. Expanding into China
China is one of the largest and fastest growing E-commerce markets in the world. While the market promises huge opportunities, the cultural, linguistic, socio-economic and political differences create unique market conditions. As previous failed market entry trials of Uber and Amazon have shown, this can present complex challenges to foreign companies. For a successful China ecommerce expansion, seeking local business partners or experienced third party services that can advise and support with market entry are therefore indispensable.
3. The Connected Store: A complete fusion of offline with online
The Connected store, á la Rebecca Minkoff’s flagship store in New York, will at least partially become reality in 2017. In-store technology such as beacon and WiFi signal are already used by retailers.
Retailers will be able to analyse which items were taken into the fitting room, identify what has been purchased or left behind and follow up with a reminder the next time when the customer visits the online store. This will not only increase retailers’ sales but also lead to improved insight into customer demands and, as in the case of Rebecca Minkoff, change the direction of their collections. For a lot of retailers in 2017, this fusion of offline and online data is the next stage to achieving a complete holistic single customer view, thereby providing a more customized experience.
4. Predictive Analytics
More and more retailers are looking to predict what customers want before consumers are even aware of it. In order for retailers and brands to stay relevant in 2017, it is therefore crucial for them to not only analyse data post-purchase but also be able to identify trends and produce accurate forecasts.
According to an Econsultancy study, 53% of companies that currently use predictive analytics saw a significant increase in sales. Moreover, 99% of companies agree that predictive analytics will be vital in the future.
5. Delivery and fulfilment innovation
Our final trend for 2017 addresses the ever-increasing customer expectations around fulfilment innovation and delivery propositions. Convenience shoppers that are driven by immediacy now demand Amazon-like propositions and expect same and next day delivery. On-demand delivery services such as Uber Rush, Postmates or Jinn are gaining significant traction and we anticipate 2017 will see retailers partner up with on demand delivery services to satisfy this customer expectation.
With ecommerce continuing to grow rapidly, more brands going direct to consumer and established market players offering an ever-increasing product range and customer service proposition, competition is set to become fiercer than ever.
In 2017, customers will be harder to acquire, easier to lose and pickier on prices and user experience. It is therefore more crucial than ever for retailers to carefully plan ahead, ensure their proposition is customer-centric and provide the ultimate user experience.
You can find out more about key trends in retail by downloading our Retail Innovation Report 2016.