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5 critical e-Commerce trends to be aware of

Maybe you, like me, remember the "good old days" of marketing on the Internet.  The late 80's and early 90's were very much the wild, wild west of having an online presence.  Clunky websites with little pizzazz, zero visitor interactivity, and the same information you'd find on the company's brochures.  In short, their website was just a brochure - and usually done with way less class than the original!

In a report from earlier this year, Forrester Research Inc from Cambridge, MA, USA, identified 5 critical trends for 2011 and forward in e-Commerce.

1. The growth of multi-channel monster.

An increasing number of retailers are now multi-channelling their marketing efforts and seeing more of their sales through their web divisions than previously. This tendency for the web channel to outstrip the physical retail store has been going on for years.  But much of this growth is coming at really critical times, like Christmas. In another study, Forrester conducted in December 2010, 49% of online shoppers agreed with the statement: "I shopped at stores less because I bought online instead" when thinking of thier Thanksgiving experiences (Source: Forrester and Bizrate Insights Holiday Flash Survey.).
And there is nothing to show that this trend won't continue as more and more consumers become familiar, and confident, with shopping online.

Takeaway... Diversification of your online marketing strategy is critical.  Although the company website will still remain the kingpin, expansion into other areas is now becoming very important.

Mobile commerce2. The explosion of tablet commerce.

Despite the fact that the iPad was only released to the market in spring 2010, it immediately distinguished itself to be a great traffic funnel device.  Many retailers report that even half of what they consider a mobile traffic purchase to be via these devices. This will probably lead to a new subset of mobile trade: tablet-commerce. This trend is also likely to continue as smartphones have the inherent weakness of a smaller form factor making it a challenge to purchase on them. So what's the future for smartphones, and other forms of m-commerce?  It will continue to grow, but for different reasons. While consumers are less likely to use their mobile phones as they will their desktop or laptop computers to surf the Internet, for now at least, they will continue using their phones to complete shopping transactions.  But tablet devices are expected to to steal market share from the traditional PC by freeing buyers from their desktops, allowing them to browse, research and shop while commuting, waiting at the airport, or even camping.

Takeaway... Thought needs to be given to mobile visitors.  Websites which are difficult (some are impossible) to navigate and use by mobile devices are potential money losers.

3. Online marketplace investment for retailers.

One very important fact surrounding e-Commerce in recent years is how Amazon.com has grown faster than the rest of the e-Commerce industry.  Despite their aggressive pricing and shipping policy, it has been very profitable.  The driver of profits is the Amazon Marketplace, a drop-ship model, in which Amazon picks up orders without holding inventory or incurring shipping charges (because the order is filled by other carriers).  Amazon also takes an income share of at least 8% of the price paid by consumers. Amazon has reported that these products are 34% of all units sold at their website.
Retailers who compete with Amazon have discovered that by offering  marketplaces on their own sites is essential to drive margins and remain competitive in pricing and shipping of items they hold in stock. Companies like Buy.com and Walmart have already introduced marketplaces.  Look for other in sectors such as clothing, toys and sporting goods to do the same. This strategy will help them to maintain a certain market share which would otherwise be lost to Amazon.

Takeaway...This is really a sub-set of point #1.  And it means diversification.

4. "Conversion marketing" mainstreaming.

Marketing tactics are a series of specific actions taken by retailers to drive more customers to their sites, and then covert more to sales while they are there.  This activity is rooted in behavioral ad targeting, which, over the years, has enabled the success of "intelligent display ads" by analyzing a shopper's clickstream paths and deduced intentions. 
Retail conversion rates are usually around 3%.  Conversion marketing provides opportunities to address the other 97% of visitors.  Some examples include new companies such as Runa, allowing retailers to enhance offerings to customers valid for the current session only.

Takeaway...This requires a move, in all areas, towards more intelligent ads (such as current session only offers), and the use of smart email campaigns.

Social networking5. Skepticism surrounding the role of social networks in terms of sales.

  Although the promise of social networks created a frenzy around the S-commerce '(social trade) and "F-commerce" (Facebook commerce), the reality is that the hype was more speculative than proven. For two consecutive years, Forrester's research with Shop.org has shown that, although traders have created a presence on social networks, most are unable to identify the ROI, with fewer noticing a growth in their business directly attributable to social networks.
Finally, what may spell the doom of the s-Commerce craze, was that, when Forrester's surveyed retailers in their 2010 Shop.org survey, social networks are actually ranked dead last on the list of the top 10 customer acquisition tactics.

Takeaway...Whilst there is no concrete evidence according to Forrester's survey, we, personally, still recommend a presence on Facebook and Twitter.  While they may not directly generate sales (but, then again, they may...), they still can give brand awareness, and consumers are still, in our experience, looking for companies to be on them.

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