Eight e-commerce trends that brands and retailers should pay attention to

Eight e-commerce trends brands and retailers should watch
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Last year, e-commerce sales grew 12 percent from $202 to $226 billion, and they’re forecasted to grow another 12 percent to $252 billion by the end of this year. Given that nothing has been more disruptive to the outdoor retail landscape than e-commerce, SNEWS attended the Internet Retailer Convention and Exhibition in Chicago last week to report the latest happenings in the digital commerce space.

The ripple effects from e-commerce market forces are just beginning to take shape. Mobile commerce, alternative currencies and content commerce continue to disrupt the retail landscape. Here are just a few of these trends.

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1. The Rise of Alternative Currency
What most suppliers, retailers and consumers don’t realize is that they already are part of the alternative currency economy. No, not Bitcoin — we’re talking mileage points, reward points and loyalty points. According to a study by Colloquy, a loyalty marketing consulting company, the alternative currency economy introduces $48 billion in new currency each year.

Many brands and retailers offer loyalty points as a purchase incentive, but offer little utility to shoppers who have little use for them. Services like points.com allow customers to trade points from participating dealers on an open exchange for other points, gift cards and even cash. In this sense, when brands reward customers with rewards points, they are participating in the alternative currency economy.

2. Internet Sales Tax
The Marketplace Fairness Act was introduced into the Senate on April 16 and passed on May 6. Many speculate that there will be some kind of state sales tax enforced at the federal level within the year.

“The odds are better now than ever that it’s going to happen,” said John Osman, vice president of business development for Avalara, a company that helps online retailers navigate the murky legal waters of sales tax. This could be a monumental shift in e-commerce as one study says that up to 44 percent of shoppers will buy less online if a national sales tax is passed.

3. Power Shifting to the Brand
At Internet Retailer, the term “brand” is hardly ever used. Instead, “retailer” is used to interchangeably to refer both retailers and brands. In other words, for many e-commerce service providers, there is no distinction between a brand and retailer because both sell to customers.

“Consumers expect to buy directly from the brand and the brand does it to maintain the connection with the customer. They [brands] used to get pressure from dealers but now it’s one of those things where everyone just has to do it,” said David Frank, account development manager from Tealium, a software provider that helps speed up e-commerce sites.

As brands continue to gain retail leverage, resellers are left in an awkward balance between competing with brands while restricted by MAP and RPM rules.

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4. Dynamic Pricing and MAP Enforcement

Shoppers are willing to pay different rates for goods at different times of the day, on different days of the week and during different weeks of the year. To capitalize on shoppers’ fluctuating propensity to consume, companies like Wise Pricer have developed pricing engines so retailers can maximize margins while selling through platforms like Amazon and Ebay.

But more significant is the intelligence these kinds of pricing engines can offer to brands. Many times, brands struggle to track the true selling price of their products in the marketplace. Services like Channel IQ give brands visibility on the true market price of their items to help track offenses to Minimum Advertised Price policies and Resale Price Maintenance policies.

5. Still the Year of Mobile
Mobile sales grew 84 percent last year to $24.81 billion and are projected to reach $38.84 billion by the end of this year. And while no one disputes that mobile will continue to grow in proportion to the rest of e-commerce, when looking at mobile from a global perspective, mobile can even take priority over traditional “desktop” design.

In a keynote talk on day one of the conference, Al Gore noted that many developing countries are skipping desktops and laptops altogether and going straight to tablets and phones. This means that when brands and retailers build international sites, they must look at each country and determine whether it makes sense to develop a mobile responsive wireframe before building a desktop responsive wireframe.

6. Shoppers are converting via multiple touch points
If there is any buzz word that has been overused in e-commerce this year, it’s “omni channel.” Omni channel commerce refers to the blending of sales channels, where a shopper starts on one platform and converts on another (For instance, a shopper walks into a brick and mortar store, showrooms a product with their mobile device, then goes home and researches coupon codes on their desktop, where they convert and instead of opting for shipping, picks up the item at a store or shipping locker). With a little bit of tweaking, Google Analytics allows brands and retailers to gain visibility on the shopper’s path to conversion.

7. Same-Day Shipping
Both UPS and Fedex already offer same-day shipping for certain markets in metropolitan areas. Wal-Mart has been beta testing same-day shipping in the Bay Area for more than a year and has gone so far as delivering frozen foods and groceries the same day they’re ordered. The question is when this type of service will be a reality for brands and retailers in the outdoor space.

8. Brands are the new Publishers
In the spring of 2010, Thrillist.com, a men’s urban lifestyle publication, acquired Jack Threads, a members-only urban lifestyle e-commerce store. The sum, while unannounced officially, was in the single-digit millions.

At this Internet Retailer, Jason Ross, CEO of Jack Threads spoke about the successes of a content-driven e-commerce strategy (so successful that Thrillest.com bought/started two more men’s lifestyle publications). These types of successes have led to a new paradigm in publishing; brands are the new publishers. The trend can also seen as brands and retailers continue to invest in their own digital publications as well as their social publications (Facebook, Twitter, Instagram, Pinterest, Vine, etc.)

--Yoon Kim

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