The biggest ecommerce trends for 2016

The biggest ecommerce trends for 2016

Dec. 21, 2015 Sami Haltia

2015 is almost over and now is a good time to turn our views to what’s going to happen in ecommerce in 2016. Ecommerce is growing and evolving with pace and the tightening competition gives no room for laggards. Read our biggest ecommerce trend predictions for 2016 and don’t get left behind.

Ecommerce growth will remain fastIn 2015 global ecommerce continued to grow rapidly, just as expected. According to eMarketer online retail will have grown 20 % by the end of the year compared to 2014 and the annual growth rate is expected to remain almost as high next year. Currently ecommerce accounts for 6.7 % of all retail globally and will grow up to 7.4 % by the end of next year.

Retail ecommerce is growing fast, but surprisingly B2B ecommerce is growing even faster. By 2020 Forrester expects B2B ecommerce to exceed 1.1 trillion dollars in the U.S., double the size of B2C ecommerce. Even though the United States is a forerunner in ecommerce, the rest of the world is following strongly on the same path.

These statistics are pretty overwhelming, so let’s focus on the things that can earn you your piece of the pie in this high-potential market in 2016.

Ecommerce trends in 2016

Multichannel, omnichannel and the seamless customer experience

Omnichannel has been quite a buzzword in ecommerce during the past years. But despite this it still seems to be challenging to find many good examples of a perfect omnichannel customer experience.

It is essentially about recognizing the entire customer journey and providing a seamless and coherent customer experience every step of the way. Conventionally, ecommerce experts have been talking a lot about the importance of the ecommerce user experience or “UX”. This refers to what happens online while shopping in a web store and the usability and pleasure experienced. However, the omnichannel philosophy goes beyond the website and closer to the reality of the customer. It takes all possible customer journey paths into account. The customer experience, “CX”, is thus a better term to use in the omnichannel context.

In a lot of cases, the customer journey includes a lot of browsing in several web stores using several devices, and eventually ending in a brick and mortar shop. Responsiveness and a smooth user experience of the ecommerce website on any device is already a prerequisite, but merchants are increasingly focusing on maintaining a seamless experience when going from online to brick and mortar.

And this doesn’t necessarily mean going offline. There is a lot of technology available to supplement the prior online experience in the physical store. You may for example have a beacon in your store for sending timely and highly targeted marketing messages, promotions and discounts directly to the customer’s mobile device as he or she enters the store. There are also many types of digital point-of-sale (POS) services and payment modules available to connect the brick and mortar customer experience to the online CX. These technologies will become much more common in the near future.

Mobile ecommerce is being driven by the millennials

As previously stated, an ecommerce store needs to fluently fit to any type of screen and offer a solid, user friendly experience throughout the whole customer journey. The ability to do online shopping on your smartphone can’t be considered a selling point anymore – not having this feature is instead a major defect that can lose you a lot of sales.

Mobile ecommerce is driven by the millennialsA study by Four51 concludes that ecommerce companies should actually consider mobile as the first screen when designing an ecommerce store. This may sound radical but there is actually a lot of data to support this argument. There are already 7.2 billion mobile subscriptions in the world which is almost 2.5 times as many as there are people with broadband access. By the end of 2016 almost a third of the world’s population will have a smartphone and, according to Ericsson Communications’ CEO Hans Vestberg, by 2020 mobile broadband will cover an area reaching 90% of the world’s population.

eMarketer predicts that mobile commerce will grow to account for 25% of all ecommerce by the end of 2016. A Forbes study shows that 87 % of the millennials (grown-ups born after 1980) use two or three digital devices on a daily basis and spend more time using them than using a desktop computer or watching TV.

There are plenty more statistics available to lead to the same conclusion – mobile is clearly overtaking desktop and has already done so in many aspects. This change is lead by the younger generations. This is also why going back doesn’t look likely.

Targeted marketing leaps forward as merchants get more out of data

Marketing automation is set to leap forward yet again and customer communications will become even more personalized. Gathering customer and market data isn’t new to companies, but analyzing it has been complicated and costly. In many cases most of the collected data hasn’t been utilized.

The use of APIs is growing fast in ecommerceIn the recent years, data analysis and utilization however has gotten a lot easier. Ecommerce merchants have a huge range of different tools for analyzing data and they no longer need an analyst to make use of it. A lot of software companies are creating API (Application Programming Interface) based extensions to ecommerce platforms to bring all these tools available with plug-and-play integrations. Ecommerce merchants are using these tools to make marketing communications and the whole customer experience more personal through better data utilization.

We have already seen a lot of ecommerce stores having targeted marketing, personalized offers, product recommendations, pricing and other promotional content. This trend will continue to spread to also cover smaller online stores thanks to the easy and affordable APIs.

To collect as much customer data as possible, merchants want to have the customer login to the store, creating a personal account. This however is something that most customers prefer not to do. Logins are not usually required anymore. This has lead to merchants creating online loyalty programs and thus offering their customers discounts and personalized service in exchange for their personal information. This makes it easy for merchants to provide targeted offers and product recommendations and of course, gain loyal customers.

Adolescents are reached in social media and by new payment methods

Ecommerce has infiltrated social mediaEcommerce has also strongly infiltrated social media which is where the youngest age groups spend a lot of time. Targeted advertising on, for example, Facebook is extremely easy. But now it is also possible to set up an actual shop in Facebook.

The biggest obstacle in selling to adolescents online so far has been their lack of credit cards. The recent innovations in payment methods however seem to tackle this obstacle. For example, Apple Pay makes is possible for an adolescent to confirm a payment by using the Touch ID fingerprint scanner and the money is transferred directly from his’ or hers’ parent’s mobile wallet. Convenient, isn’t it?

ApplePay is enabling easy ecommerce paymentsAccording to a Multichannel Merchant prediction this will increase the purchases of youngsters aged 12-17 remarkably in the coming years.

Ecommerce will spread to a wider range of products and services

The founder of Paytrail, a Finnish online payment provider company, Lennu Keinänen, believes that people will start buying a wider range of goods online next year. He predicts that, for example, the sales of SaaS software will increase notably.

The CEO of Ecommerce Finland, Oula Järvinen, believes that online grocery sales will find new and more effective concepts and will also grow significantly globally.

Järvinen also believes that the Finnish field of ecommerce will continue to consolidate and that the many small online businesses will merge into fewer, bigger online businesses.

C2C ecommerce grows as new business models emerge

A Finnish Commerce Federation study shows that C2C online sales have grown during the past years. The study reveals that during the past 18 months Finns have traded half a billion Euros worth of consumer goods and 900 million worth of motor vehicles, boats and related equipment in online C2C sales. Not just some minor flea market anymore, is it?

The risen C2C sales of consumer goods may be partly explainable by the need for saving due to bad economic times. The rise of C2C online services, such as Airbnb and Uber are especially interesting. The mentioned services are reasonably new in Finland and available only in selected areas, but they have still already been used by 200 000 Finns during the past 18 months. These and many other similar services seem to be rising fast in popularity.

Wild cards

Predicting how big an affect these wild cards will have on ecommerce next year is difficult, but some may turn into something big.

A new type of social media application, Periscope, was launched in the spring of 2015 and has quickly gained tons of users worldwide. The smartphone app makes its user the star of their own live video broadcast at any given time that is viewable by any other Periscope user from anywhere in the world. Even though this app isn’t directly related to ecommerce, my prediction is that innovative businesses will come up with a huge amount of new ways to use this in their promotions – and no doubt this applies to ecommerce businesses as well. A bunch of companies have already created successful marketing campaigns using Periscope, such as BMW during the launch of their new M2 Coupe. And I’m pretty sure there’s a whole lot more to come.

Many of the ecommerce industry giants have started offering same-day deliveries for product purchases in their online stores. There seems to be a market of impatient enough people to make same-day deliveries profitable and many ecommerce store owners are currently pondering how they can make their deliveries faster.

Delivery drones make fast one-day deliveries possiblePackage deliveries using drones have been developed and tested for some time now, especially in the US. Technically taking these into action would easily be possible. The biggest obstacle in this case are laws that restrict flying UAVs for commercial purposes in many countries. If the laws are to change at some point in the future, drone deliveries may turn out to have a huge impact on ecommerce.

Another interesting way of delivering packages on the day of receiving the order is delivery crowdsourcing. The idea is that the ecommerce company pays for basically anyone willing to deliver a package. This “Uber of package deliveries” is already being implemented by a couple of companies in the US, such as Deliv and Amazon with Amazon Flex delivering packages to their Prime Now customers. It remains to be seen when and how big crowdsourced deliveries will become in the future.

 

Sami Haltia
Marketing Coordinator