The behemoth of eCommerce shows every sign of barrelling into 2018 with increasing momentum. Global eCommerce sales are predicted to hit almost $2.8trn next year and the next step in an inexorable upward trend will see it hit nearly $4.8trn by 2021. The UK portion of that is set to reach £203bn – making it the third largest eCommerce market worldwide. A market opportunity this big creates a hotbed of innovation and development that is transforming the way that we buy and receive goods. As we look towards the coming year here are five key trends that we believe will fuel that transformation.
1. Virtual Assistants Powered By AI
Back in 2016 Gartner predicted that by 2020 85% of customer interactions would be managed without human intervention. 2018 will be the year that retailers really start to leverage the convenience and 24/7 availability of artificial intelligence fronted by chatbots for managing customer service queries and making intelligent purchase recommendations. Customers will become comfortable with interacting with chatbots as they browse online stores, in the same way they’d ask a shop assistant in a physical store. Linked to this is…
2. The Drive For Dynamic Applications
e-retailers will continue to trespass on the comfort zones of bricks and mortar stores by developing more ways for customers to get that “hands-on” feeling that an in-store experience provides. By scanning their faces and figures into dynamic apps purchasers they will be able to virtually try on clothes and makeup, making it more likely that the customer will be satisfied with the product when it is actually delivered. This reduces return rates for retailers and carriers alike and increases customer engagement with the buying process. And I know from my company’s own research which was conducted in 2016 that one of the aspects that consumers hate about online shopping is having to return goods.
In a similar way, dynamic augmented reality applications, such as BMW’s iVisualizer app, will begin to proliferate. These apps demonstrate products interactively – in BMW’s case turning any space into a virtual car showroom – allowing customers to build their own bespoke products, walk around them and see how they’ll look and perform prior to purchase. This will assist customer decision-making and enhance the virtual shopping experience. And while we’re on the topic of apps, with mCommerce expected to increase to nearly 50% of the total eCommerce market in the next five years, retailers who haven’t already launched their own applications that deliver a seamless buying and delivery experience run the risk of being left behind.
3. This Time It’s (Even More) Personal
The drive for the ultimate in customer personalisation will continue. Retailers will race to become even more intelligent and creative about how they use data to offer a total understanding of the customer universe. They’ll be aggregating customer interests, buying trends and profile information to offer the right product, to the right person, at the right time and at the right price in a bid to deliver an interactive experience that beats their rivals and delights their customers. Beware, though, that what initially delights the customer quickly becomes their basic expectation. Continuous improvement and innovation is the keynote of this industry and retailers will need to keep building their capability to avoid falling behind customer expectations that continue to grow ever higher.
4. Speed & Automation
Time is becoming the most valuable commodity for customers and e-retailers alike. Customers want to save time and retailers want to reduce the time spent on managing customer processes so they can focus on the quality of the experience. One way to do this is through increasing the automation of the buying and delivery process. The use of virtual wallets mean customers don’t have to input information into each retailer’s website – reducing the chance of cart abandonment when a process is taking too long. At the retailer side the automation of processes such as fraud detection – flagging high risk transactions automatically – will make for greater efficiency.
5. Delivery Innovation
Speaking of speed and automation, there’s perhaps no bigger area of relevance for this than in delivery and returns. Customers will continue to demand a wide variety of flexible delivery options that work around their lives in terms of location – home, store dropbox etc, and time frame – evening, weekends, day, hour or even minute-specific. Making the options clear at the checkout and ensuring that despatch and tracking processes are fully aligned to reduce the incidence of human error and get products flying out of the warehouse will become even more critical. Will we see widespread adoption of drone deliveries in 2018? I’m not sure, but I do know that retailers will continue to innovate to overcome the challenges of last-mile delivery.
Every development and innovation in 2018 will fundamentally be driven by the desire to balance personalisation and exceptional customer experience with automation and process efficiency to benefit both customers, retailers and all those in the supply and logistics chain. One thing that will never go out of style is the fact that customer loyalty is the lifeblood of retail and the race to capture that loyalty will drive an exciting period of innovation in 2018.