In a recent Forrester-Shop.org study, we found that 70% of online retailers are investing in “content” in the coming year. What sort of content you may ask. Usually when they say “content” retailers mean videos, blog posts and magazine-like content that is best for consumers at the top of the shopping funnel. This type of content though is notoriously difficult to monetize though. A number of companies like Babycenter in the late 1990s were the first wave of content-driving-commerce digital players to try this. They quickly realized it was not only difficult to do but that top-of-the-funnel content was easier monetized through advertising.
But we’re in a different era now and that’s kicked up the possibility of new success from content. We now have ubiquitous mobile devices with web connectivity, social networks like Pinterest and Instagram that thrive on content, and the disruption of the entire content industry (RIP, Lucky Magazine which was one of the hottest media properties in 1999).
But are things really that different now? For all its attempts to drive commerce, even fashion darling Refinery29 could never make shopping happen. One of the more recent torchbearers of content-commerce synergies, Thrillist-JackThreads, decided the businesses are better split apart than together.
In late March, Amazon cracked up the Twittosphere with an announcement that it would release a Dash button (not to be confused with the Amazon Dash device which is a wand for your kitchen). It is a button that you put in your home (like your laundry room) and program to order a single packaged good (say a specific SKU of Tide detergent). You press the button and that item gets ordered through your Amazon Prime account. On September 2, Amazon made the buttons available to the general public (Amazon Prime members specifically) for $5 each.
My esteemed colleague James McQuivey just published a piece calling the Dash Buttons the Best Bad Idea of 2015 in which he outlines the reasons why this device, while widely mocked, is actually a super interesting idea whose most fascinating applications won’t even be with Amazon.
The hottest topic in eCommerce these days seems to be “buy buttons.” The energy though appears premature. Pinterest announced its buyable pins with a press conference and sentimental Hallmark-like videos though the buyable pins are actually hard to find. Facebook, the king of all social networks, announced a buy button more than a year ago but it’s been relatively mum on the details (and they appear to only have one formal eCommerce partner). Media reports and blog posts of Instagram, Twitter, and Google doing the same seem to further excite merchants and vendors alike - but nothing seems to have launched.
The uninitiated may ask, “What are buy buttons?” They are essentially the ability to complete a transaction on one of these sites. The merchant of record is still usually the seller of the item. This makes all of these players marketplaces. One other salient point, in the cases of Pinterest and Google, is that their buy buttons will only be available on mobile devices upon launch. We’d also be remiss not to mention that the idea of impulse-driven purchases through an app aren’t new: Fancy and others have been trying this for years with questionable success. One executive at a large merchant I recently talked to appropriately summed it up: “This seems like F-Commerce v.2.”
As mobile becomes a critical component of your digital strategy and overall business, eBusiness professionals should have an answer when their executive teams ask, “Who does mobile commerce well?” Forrester has answered that question for you in our new report published today. Using a proprietary framework, we analyzed top retailers’ mobile experiences (sites and apps) and measured how well they addressed key challenges to mobile commerce sales and supported mobile-enabled commerce in other channels. We selected the best of the best for our review to highlight the strongest functionality and uncover cross-category best practices.
Our framework evaluates the strengths of these mobile phone websites and their corresponding apps across six elements:
Findability. The ease of finding a mobile site or app altogether.
Utility. How useful the site or app is for shoppers.
Searchability. How well search and search functionality like predictive text works on mobile phones.
Browsability. How easy it is to browse the retailer’s mobile site or app.
Buyability. How easy and frictionless the buying process is on the mobile site or app.
Overall design. The ease of navigating content on mobile sites and apps, as well as other mobile content that shoppers engage with including email and text messages.
2015 is upon us: in Forrester’s just-released “Predictions 2015: US B2C And B2B eCommerce Players Will Struggle To Keep Up With Customers” report, we predict a number of key issues will challenge B2C eBusiness & Channel Strategy professionals in the coming year, while a number of new and exciting—but not pressing—topics will circulate. B2C eBusiness & channel strategy professionals ought to know which key issues to watch and which over-hyped trends to ignore.
What Will Happen: Flexible Fulfillment is the new term for omnichannel
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.
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.
If I had a dime for every time I heard the question “Isn’t eCommerce taking over retail?”, it wouldn’t make me wealthy, but I’d certainly have a few hundred dollars more than I do now. Nonetheless, it’s a question that is unfortunately misguided and has permeated our zeitgeist. The truth is that yes, eCommerce is growing - but physical retail is far from doomed. Let me take the two parts of that last sentence and address them each separately.
First, the fact that eCommerce is growing. Forrester just released the latest five-year online retail forecast and to no one’s surprise, the numbers are big. We’re projecting $294B in eCommerce sales across 30 retail categories in 2014, expected to grow to $414B by 2018. The web keeps doing what it has always done well: it provides huge assortments of products, at comparable, often lower, prices than physical stores, with 24/7 access and often free shipping. For many categories like media products or electronics, we’ve already observed a heavy shift to the web channel away from physical stores. Add to that the ubiquity of mobile devices and that drives even more shopping in more instances and places. In fact, we’re projecting that $87B of that $294B will happen on phones and tablets in 2014, and that doesn’t even include another $28B in additional mobile transactions on sites and apps like Uber and Domino’s Pizza that aren’t even in that aforementioned mobile commerce number.
But all this growth certainly doesn’t mean that stores are dying. Here’s why:
One of the biggest recent stories in the eCommerce media has been the talk of splitting eBay and PayPal, which was driven by activist investor Carl Icahn. eBay maintains Mr. Icahn’s idea is not new, and that eBay’s board has rejected the notion based on its own previous evaluations of the best strategic paths for PayPal and eBay, saying now is not the time for separation. Icahn has backed off his proposal for a full spin-off, now agreeing that a relatively small public offering of PayPal shares, say 20% would be sufficient after all. (eBay’s shareholders will vote on the proposal themselves on May 13.)
For those of us in the eCommerce industry, there was largely a sense of head-scratching and general befuddlement as to why Mr. Icahn was targeting eBay and PayPal in the first place. Everyone in our industry knows that eBay’s purchase of PayPal back in 2002 is largely regarded as a categorical homerun and a textbook example of synergy executed right. At its heart, PayPal gives eBay buyers a frictionless and trustworthy way to complete a transaction (perhaps THE single most important moment of truth in ecommerce) and eBay remains PayPal’s most important retail partner, a source of continued customer acquisition around the world, insight into the world’s most engaged shoppers and a funding source for innovation in payments. Those are the arguments on behalf of eBay shareholders, but the entire eCommerce industry in the US has an equally vested interest in keeping these two businesses together as the long-term impact on online retailers of a separate PayPal would be disastrous. Here are three reasons why:
Forrester’s "US Online Holiday Retail Forecast, 2013" launches today. In it, we predict that for the third consecutive year, online holiday sales (November and December) are expected to grow at a double-digit pace and pull in over $78 billion. This represents about one-third of the overall retail sales volume for the year. This optimism is largely due to ever-increasing numbers of consumers choosing the Web over physical stores and the rise in mobile commerce. Despite unknowns such as the effects of a truncated holiday season and lingering consumer uncertainty around the federal government shutdown, online retailers can expect that consumers will be out in droves. The most successful retailers this holiday season will cater to consumers who:
Expect free shipping in some form. Consumers have come to expect free shipping, especially during the holidays, and many will actually leave a site if it's not offered. It’s the second most common reason why US online buyers abandon purchases and go to another retailer, behind price.
Research via all channels to find the best deals. Forrester expects that, not unlike in holidays past, price and saving money will be key considerations this holiday season. As the Web channel has become synonymous with value, retailers should expect consumers to be avidly searching for deals through a variety of touchpoints, at home and in-store on mobile devices. Availability of web content across devices will be critical: Forrester estimates that cross-channel sales (transactions that are influenced by the Web in some way but are completed in stores) will account for $247 billion this holiday season.