We just published our predictions report for global eCommerce in which we identify 10 trends and discuss the impact they’ll have on the industry in 2015. We look at key commerce topics such as mobile and omnichannel and also address what we expect to see from some of the global eCommerce giants in terms of their international efforts in 2015. In addition, we explore topics such as:
The B(R)IC markets will continue to attract attention, but smaller ones will also gain traction. Next year, we expect to see continued interest in Brazil, India and China (the political situation in Russia means it will be bumped down the list for many US and European brands). However, all of these markets will remain challenging for varying reasons and we expect that other emerging markets will gain traction with brands in 2015. Indeed, a look at the World Bank Ease of Doing Business Index shows the BRIC markets falling well below other markets like Malaysia, Thailand, the UAE, Mexico and Colombia. Many eCommerce organizations won’t yet be able to justify the cost of launching direct-to-consumer sites in these smaller markets, but a handful of large global organizations will jump in to establish a brand for themselves before their counterparts do the same. Brands looking to sell cross-border will also turn their attention to smaller but fast-growing eCommerce markets.
Forrester predicts that US online retail sales will reach $89 billion during the 2014 holiday shopping season. Shoppers turn to the Web during the time-pressed period between November and December to avoid crowds, lines, and, in many cases, higher prices. This holiday season, eCommerce will experience a boom in the number of online buyers, as the holiday season is a strong opportunity for new customer acquisition, and online wallet share, as seasoned online consumers are growing more comfortable and reliant on the practice.
However, the expected growth is not as high as it could be due to a few unique constraints. A shorter than average holiday selling season, defined by the days between Thanksgiving and Christmas, limits shoppers in the time during which they can take advantage of the deep discounts they expect. Further, the expected increase in volume of online sales will push the already constrained carrier networks. Forrester estimates that nearly seven times more eCommerce packages are shipped daily in the two weeks before Christmas than daily between the months of January and October. Last year, FedEx and more notably UPS had a high number of late deliveries due to unprecedented package volume and poor weather that caused buildups at critical times. With the expected 13% increase in eCommerce sales in 2014 for the months of November and December as compared to the same period in 2013, retailers and consumers must recognize the risk of shipping delays.
Previously, when CIOs and enterprise architecture professionals talked about “business-to-business” (B2B) commerce in China, most people thought of third-party B2B marketplaces like Alibaba.com or HC360.com. Very few companies use professional B2B solutions internally, instead relying on a combination of order management systems, customer relationship management, and third-party B2B marketplaces to trade with their business partners.
This is going to change. We have observed a few trends in the Chinese market that will become major drivers for the adoption of enterprise B2B solutions. These trends were further validated during the SAP summit last week in Shenzhen.
The legacy application architecture on the market won’t address the challenges of the age of the customer. Most of the companies currently doing business in China’s B2B market are small and medium-size companies with low IT systems maturity — many of them still exchange business information by emailing Excel files. These firms must rely on third-party marketplaces for business collaboration.
India’s online retail market is on the radar of global investors and eCommerce players, which have announced investments topping $3.6 billion in the past three months, including $2 billion in Amazon, $1 billion in Flipkart, and potentially $650 million in Snapdeal. Growth in India’s online retail market is powered by its fast-growing smartphone penetration, as customers are increasingly using their mobile phones to buy products online. More than half of Snapdeal’s and Flipkart’s sales and nearly 35% of
2014 was a year of massive eCommerce investment in India. Flipkart raised $1 billion; Amazon announced it would invest $2 billion in its Indian subsidiary; and Snapdeal raised $234 million from private equity firms and an undisclosed additional sum from private investors. These three players are spending approximately 2 billion rupees ($33 million) this season on marketing — and a lot more on improving last-mile delivery and adding fulfillment centers to get a bigger piece of the sales pie.
“A unified platform for content, community and commerce.”
“A complete set of integrated solutions helps you maximize and measure your impact in more ways than ever before.”
“Everything you need to deliver unique and personal customer experiences.”
Unified. Complete. Everything you need. These quotes are pulled directly from the marketing materials of some of the biggest players in the digital experience delivery space. One piece of software that addresses all of your company’s needs in delivering top-of-the-line customer experience. Sound too good to be true?
Yeah. We thought so too.
Vendors are piecing together discrete capabilities to form what we at Forrester call digital experience delivery platforms, which aim to manage, deliver, measure, and optimize experiences consistently across every digital touchpoint. Vendors from content, commerce, and marketing backgrounds are playing in this space, and Forrester clients increasingly mention them together when considering a vendor to act as their delivery backbone (a year ago, we certainly wouldn’t have heard IBM and hybris mentioned in the same inquiry for non-transactional needs, as we did recently).
What lies ahead for the retail store? Yesterday, Forrester published a report that predicts the answers to key questions about the future of the retail store: Which digital technologies currently on the periphery of the store environment will make the leap to the sales floor? How will retailers know which technologies have potential and which will remain gimmicks?
In the report, we outline the utility and predicted chronology of several technologies, including:
Proximity technologies. Retailers will know when and where an associate is needed, by whom, and for what purpose.
Wearable technologies. Associates will access the relevant data to provide optimum customer service with minimum intrusion.
Facial scanning technologies. Retailers will know their in-store customers’ histories, preferences, intentions, and needs and will cater the store experience to them.
Smart countertops. Retailers will embrace consumers’ propensity to do product research while shopping in-store and enhance the utility and experience at the same time.
3D printing. Retailers will make the inventory they need on-site or once it’s been purchased.
For more on Forrester’s take on the usefulness of these and other technologies, and to see our predictions of when we’ll see them enter the retail store, see the report (client access required).
Which technologies do you think will realistically make it into retail stores of the future?
I recently “overheard” a member of our market research online community (MROC) say, “I treat my smartphone like my child and carry it everywhere I go.” It’s official: Smartphones have replaced children. Not really, but the statement speaks to the way that consumers have changed their thinking and behavior because of mobile devices. The rapid adoption and dominant presence of mobile devices speaks to their importance in consumers' daily lives.
As part of our effort to develop forward-thinking research using innovative approaches, Forrester is collecting behavioral data by tracking consumers' activities on smartphones and tablets. By using a passive tracking technology, we now have a detailed, inside look into what consumers are doing on their smartphones and tablets and when they're doing it. Preliminary results have shown some surprising (and not so surprising) data insights.
Cross-channel sales -- also known as web-influenced sales or transactions that touch a digital medium, but are not completed on the Internet -- are now more than four times larger than online sales alone and will reach $1.8 trillion by 2018. This is according to Forrester's just released five-year US cross-channel retail sales forecast. Offline sales -- primarily web-influenced offline sales -- will comprise nearly 75% of the $475 billion in US retail growth anticipated between 2014 and 2018. This growth in cross-channel sales can be attributed to US online consumers increasingly using their phones in retail stores to research products online. Retailers would be wise to see this growing trend as the new normal; if this is the first you’ve heard about your customers’ in-store mobile behavior, you’re already late to the game.
Despite frequent in-store research on the mobile device, the number of actual mobile transactions remains low. Consumers are more interested in using their phone in the “pre-shop” phase, be it searching for a product’s location, comparing prices, or checking online inventory. Many retailers, such as Target, have found it worthwhile to invest more in mobile services that meet customers’ needs in their pre-shop context rather than at the point of sale. Target has helped customers find specific items in its stores via its mobile app: A customer can create a shopping list within the app, which then maps that list onto the floor map of the customer’s Target store location, guiding them through the aisles from one item to the next.