The State Of Retail eCommerce In Brazil

The economic decline in Brazil has hit the retail sector hard , but eCommerce is still growing. To understand the state of affairs in retail eCommerce in Brazil, in 2016 Forrester surveyed online retailers in Brazil together with industry partner e-Commerce Brasil. Here are a few findings from the research:

  • Retailers are feeling the pain of operating in the midst of Brazil's economic recession. Nearly 60% of online retailers say slowing consumer spending with be a significant barrier to their eCommerce growth over the next 12 months. Furthermore, more than half cite the operational constraints of keeping up with constant regulatory change.
  • Online retailers are increasing their eCommerce technology budgets. Despite the pressure to reduce costs during turbulent economic times, 64% of Brazilian retailers we surveyed are increasing eCommerce investments to help them weather the storm.
  • Investment priorities include marketing, mobile – and uniquely! - marketplaces. Retailers this year are focusing on marketing and mobile, much the same as in the US and other global markets. Unlike many other markets, however, Brazilian digital commerce pros are also prioritizing marketplaces. Why? Third party marketplaces are a relatively simple way to sell direct to consumer online. And retailers like Magazine Luiza and Walmart Brasil are prioritizing launching marketplaces on their own retail sites as a source of new revenues.
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Amazon Prime Wardrobe Won’t Will Kill Subscription Boxes: Bad Strategies Will

Retail subscription boxes have a churn problem – that’s the bottom line. For non-essential categories, once the novelty wears off, consumers leave. We're seeing subscription box companies burn through their addressable markets. If there's a death knell for today’s subscription box companies, it's not Amazon’s new Prime Wardrobe offering, it's that many of them have been short-sighted. They have no game plan to maintain their value proposition after the novelty of their initial product or service wears off. 

Here’s what subscription box retailers, or retailers considering a subscription box model, should take away from Amazon’s Prime Wardrobe announcement:

  • Amazon continues to build out the value they give to Prime members. Amazon isn’t letting Prime members become desensitized to the value of their subscription.This service isn’t innovation per se  rather, it’s a value-add for existing subscribers for no additional cost. Amazon is a building out the value of a Prime membership for its members. 
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Retailers Are Prioritizing The Wrong Digital Technologies In Brick And Mortar Stores

Retailers are inundated with promising technologies to revolutionize the in-store shopping experience for consumers. The problem? Our research shows that most of these experiences today miss the mark and may actually make the customer experience more complex or confusing.  On the other hand, retailers are seeing significant, and measurable, value from technologies that directly improve store operations.

Forrester has published a two-part TechRadar™ defining the current state, business value, and long-term prospects for technologies in retail stores: one for those focusing specifically on customer experiences and the other on technologies focusing on operations. It’s still early days for both of these technology categories but we found that:

  • Operations technologies generally already offer significant business value to retailers. Of the 14 technologies we evaluated,nearly half are on track to provide significant business value for retailers. Retailers are finding that these technologies help their physical store teams and operations perform better and become more efficient by gleaning customer insights and spurring real-time action by store staff.
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Announcing Forrester’s Latest Latin America Online Retail Forecast

It’s been a big news year for eCommerce in Latin America: Brazil’s economic instability has tempered eCommerce growth, elections in Argentina have raised hopes that favorable regulatory changes are ahead, and Amazon’s entry into Mexico has shone the spotlight on the region’s fastest growing market.  According to Forrester’s recently published forecast, online retail sales in Brazil, Argentina, and Mexico (the region’s three largest markets) will reach $30.9 billion by 2020, up from $20.8 billion in 2015. Some key findings from this research include:

  • Brazil remains the region’s dominant eCommerce market. Brazil’s online retail sales today are more than double those for Mexico and Argentina combined. Despite economic (and political) woes, online sales are growing, and the market shows signs of maturity:  Online shoppers in Brazil span social classes and buy across categories – with categories like apparel and footwear gaining a larger share of the overall online retail sales pie.  
  • Macroeconomic conditions in Argentina have presented obstacles to eCommerce growth. Tight import restrictions enacted in 2012 made importing products extremely expensive and kept foreign investment in the market at bay. The newly elected government appears to be working towards loosening up these restrictions, though little has changed so far. Local traditional retailers are driving eCommerce growth and increasingly adding omnichannel capabilities for consumers. For example, traditional retailer Falabella offers customers visibility into store inventory, and flexible fulfillment options like multiple pick up sites or buy online pick up in store.
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Why A Tax Law Change In Australia Could Impact Online Revenues For US Online Retailers

In August 2015, the Australian government announced an impending change to their tax structure that will impact online retailers serving the market via international shipping. Today, Australian consumers can import up to A$1,000 duty-free when they buy from a foreign retailer. The A$1,000 duty-free exemption is known as the low value threshold (LVT) and it has driven a large cross-border shopping habit among online shoppers in Australia. But change is afoot and retailers should know that:

  • Goods and services tax (GST) will be added to cross-border transactions previously exempt. As of July 2017, the Australian government will be expanding its GST collection to purchases previously exempt under the A$1,000 threshold. Additionally, the government stipulates the onus is on retailers to collect and remit the tax: According to the Australian Treasury Department, "For goods with a value of A$1,000 or less, GST is applied at point of sale. Overseas vendors with an Australian turnover of $75,000 or more will be required to register, collect and remit GST on low value goods."* 
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How Big Will eCommerce In Asia Pacific Be In Five Years?

The answer: In the markets included in our latest Asia Pacific Online Retail Forecast— China, Japan, South Korea, India, and Australia — total online retail revenues will nearly double from $733 billion in 2015 to $1.4 trillion in 2020. For perspective, $1.4 trillion is about the same amount spent online in 2015 in every market that Forrester forecasts across the globe combined. 

In our latest report, Asia Pacific Online Retail Forecast 2015 To 2020, (subscription required) we look at the growth in these markets over the next five years and some of the key trends shaping the development of online retail in each one, including the following:

  • China’s eCommerce market grows despite the economic slowdown. 2015 marked a global eCommerce turning point: China surpassed the US to become the largest eCommerce market in the world, but its economy also dipped below 7% for the first time since 2009. While the days of staggering year over year eCommerce growth in China are behind us, current growth rates are solid and more consistent with other mature markets in the region, like Japan and South Korea.
  • India is the fastest growing eCommerce market in the region, but is not without its obstacles. The smallest eCommerce market in our forecast, India’s online sales will grow by more than five-fold by 2020 as the number of online buyers and per capita online spending increase rapidly. However, in addition to underdeveloped logistics and challenging last-mile connectivity, India's cash-based culture still poses a challenge for eCommerce firms.
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Announcing Forrester’s Inaugural Wave Evaluation of Subscription Billing Platforms

Few industries are immune from the digitization of experiences, content, services, and products. In this era of cloud computing, IOT and mobile devices, firms are increasingly testing new product offerings that combine elements of content, software, services, and hardware together. Like the evolution of the products themselves, the rulebook on monetizing them is also evolving: firms are replacing the simple one-time sales models of yore with subscription and consumption-based business models that better sustain a continuous relationship with their customers. But unfortunately, in most cases, firms’ existing technology ecosystem doesn’t support the complex requirements of supporting a subscription business model- from customer lifecycle management to finance management.  Enter: subscription billing platforms.

Forrester has identified the eight leading vendors in the space and spent the last four months putting them through a grueling process of due diligence, product demos, capability assessments and customer reference checks. Here’s what we found.

■  Aria Systems, SAP hybris billing, and Zuora lead the pack. These three vendors represent thought leadership and the associated market innovation. All three commonly go head-to-head in opportunities at both midmarket and enterprise firms and in both B2C and B2B monetization scenarios. Each of the three has developed core industry vertical expertise in sectors such as IOT, healthcare, and telco and has established mature partnerships with global management consultancy and system integration firms.

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Beyond Language & Payments: Website Localization Must-Haves For Global eCommerce

Long gone are the days in which eCommerce site localization means just translating language and accepting localized payment methods. In a high stakes environment, where a global roll out of direct localized sites can mean millions of dollars of investment, eBusiness professionals responsible for managing international customer-facing websites must localize effectively or risk damaging the reputation of their brands and stifling growth.

Forrester published a report today that outlines seven mission-critical areas to any website localization initiative. Among these imperatives are:

  • Consistent Domain Structures.  The best practice in a domain name strategy for a multinational company is to maintain a strong global brand by using the same domain strategy across the globe. There are four common URL strategies available to firms today: country code top-level domains or ccTLDs (e.g., acme.br), subfolders (e.g., acme.com/br/portugues), subdomains (e.g., br.acme.com), and brand-level global top-level domains or gTLDs (e.g., annualreport.acme). The report provides detailed considerations for each domain convention.
  • SEO-optimized site content.  It is essential to make sure the website’s translated content is easily discoverable for consumers and is positioned to rank at the top of dominant local search engines. eBusiness leaders must understand search engine market share and local market semantics in order to come up on top.
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Technology Advancements Mean Machine Translation Has Earned A Second Chance

It's simple math: The sheer volume of translatable website content multiplied by the number of languages needed to globalize can make a translation initiative out of reach. The truth is that machine translation (MT) offers access to otherwise unreadable information for global consumers.

While it’s true MT can't account for context and tone and often fails to grasp the nuances and ambiguities of language, there are several technology advancements improving the quality and efficiency of MT. Additionally, the MT engines offered by language service providers aren't the humble online translation tools of yore. They include complex rules engines and sophisticated algorithms, which are often also trainable and customizable based on industry terminology, resulting in much higher quality translation output.

Before dismissing MT, eBusiness leaders should consider that:

  • Big data has made a big impact. Faster and more sophisticated algorithms allow for greater efficiency and accuracy in translation processes and workflows.MT relies on the coding and matching of languages — a vast and variable data set — thus, it has benefitted greatly from advances in analytics and data processing.  
  • Translation memory is boosting translation quality and efficiency. Translation memories are sophisticated language databases that store already translated content. By leveraging previously translated content, firms can reduce the volume of new content to translate plus improve consistency in translation outcomes.
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Selling Digital Goods Or Online Services Requires A Flexible Commerce Platform

Consumers and enterprises alike are increasingly shying away from buying digital content, services, and software outright. Instead, these businesses are embracing alternative business models where they lease or rent access to digital products and services. The disruption to traditional business models is widespread and accelerating across all verticals of digital product distribution, with high profile digital disruptors like Adobe, Netflix, and Salesforce driving changes in the way consumers and enterprises pay for, and engage with, digital products.

Today we see that:

  • Business model changes are accelerating in the digital goods marketplace. Today's digitally connected consumer is increasingly eschewing the traditional ownership model of buy, download, install, and use. Consumers want access to digital content and services across their connected devices, anytime, anywhere — and are embracing virtual ownership models that provide access to vast libraries of content, services, and products under subscription, usage, and other emerging ownership models.
  • A different set of features and services are fundamental for digital goods sellers. Many of the features and capabilities found in enterprise eCommerce platforms are directly transferrable to selling digital goods or online services. However, most of these retail-focused solutions lack the unique features and services needed to sell digital products and services online, including flexible cross selling and bundling, asset protection, subscription management and entitlements among other features.
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