In years gone by, consumers shopped in their local shops and even when online shopping became available, many people felt uncomfortable giving their personal information to online stores and using their credit cards. However, that has now changed.
Ecommerce In A Digital Age
All over the world, online buying has grown massively. Last year, Irish people spent over €5.6 billion online. Conversely, 75% of these purchases went through companies from outside of Ireland. This simply means that every second, €98 leaves the Irish economy. The total amount spent by Irish people online is expected to grow to €21 billion by the end of 2017. Although some consumers might still be anxious about the security of online shopping, more and more consumers are now prepared to buy online.
There are tons of benefits to online shopping including easier return policies, faster delivery and many sites even offer free shipping. Research from IBIS World estimates that throughout the next five years, there will be an 8.6% increase every year in online revenues.
The growth of online shopping has been branded by the increasing number of and types of goods available. Additionally, the strong demands from the consumer has led to online purchases dominating the retail market. In order to cut costs, now many businesses are moving their companies online. In Ireland and other European countries, an emergent generation of young, internet-savvy individuals have embraced online technology.
In the U.S., retail e-commerce sales amounted to $342.96 billion in 2015. This has been projected to surpass $600 billion in 2019. Research carried out by Forrester Research Inc. has indicated that mobile devices are estimated to be a key driver in that growth.
Moreover, for retailers, it is expected that there will be a significant increase in the total amount of shoppers browsing & buying on their smartphones and tablets. Forrester’s data projects that in 2015, more than $1 trillion in total purchases (between offline & online transactions) were ‘’influenced by’’ mobile devices.
Their research has indicated that an additional 26 million shoppers will be both browsing & purchasing from retail websites by the end 2020. This will make the total amount of consumers using their smartphones and tablets to purchase goods online 270 million.
It’s safe to say that the internet will only become more popular as time goes by. Worldwide, purchasers become more contented about the security as well as the on-time delivery of their purchases.
Current Growth of the Ecommerce Market
Online retail is now a huge, booming industry as the latest retail growth figures show ecommerce sales (including services & products) ordered via the internet in 2016 will reach $1.915 trillion. Worldwide, this accounts for 8.7% of total retail spending.
There are many reasons why there has been such a massive growth in ecommerce sales. With more targeted marketing campaigns and improved engagement as a result of social media platforms, these improvements in technology have resulted in a smooth shopping experience.
Though overall growth is on-going, fascinatingly the St. Stephens Day sale, Black Friday and other big sales for ecommerce purchases were all down compared to the year previous even though overall ecommerce sales have considerably increased. In Ireland, only 51% of consumers purchased goods online by the second quarter of 2015. Research has found that consumers are gradually less captivated by specific day offers with year-on-year e-retail sales continue to develop with online retail sales increasing up to 10% in January 2016.
The Recent Shift In Shopping
A recent UPS/comScore survey of online shoppers in the U.S. revealed that for the first time they bought more of their purchases online rather than in shops:
Ecommerce Trends To Watch
If retailers want to stay up to date and continue to prosper, they need to pay attention to the following:
- Social Shopping
• Social commerce (i.e. selling via social networks) will continue to increase in the future. For example, Business Insider has revealed that ecommerce referrals from social media have increased by almost 200% between the first quarters of 2014 and 2015.
• Buy buttons have continued to prevail on social networks like Twitter and Pinterest. These allow consumers to purchase from these sites directly. Industry insiders have explained that conversion rates will continue to improve as a result of these buy buttons with customers buying products straight from the social site itself.
- Beacons Will Drive More Retail Sales
• The use of BLE transmitters can trigger dedicated smartphone apps, personalise the customer’s experience while also providing retailers with lots of valued analytics.
• 3.5 billion active beacons will be installed by the end of 2018. There has been a huge increase in the amount of retailers that are able to track and understand customers buying patterns using beacons. Retailers will invest $2.5 billion in IoT over the next 5 years with most of this spending going on Beacons and RFID tags.
• According to many reports, the 2 billion millennials living in the world already account for half of all retail spending. It’s important that the retailer understands this and targets this emerging group in order to boost sales.
• The fast-paced trajectory of smartphone adoption coupled with the increased reliability and speed of 3G and 4G networks means that shoppers are progressively more likely to utilise online shopping via their mobile device as opposed to their laptop or desktop.
• In order to prosper, online retailers will have to acknowledge the importance of mobile, if they have not already. Ecommerce brands will need to incorporate a mobile strategy in order to generate sales in the coming years.
- Advanced Personalisation
• A user-centric, optimised experience is becoming not just a priority but a competitive advantage.
•In a recent survey, 89% of executives believe that customer experience will be their primary mode of competition by the end of 2016.
- The Growth of Customer Rewards
• Since 2010, there has been a steady increase in the value of loyalty programs. In fact, many of the world’s leading brands are now using loyalty programs to boost conversion rates and sales. For example, Starbucks has specified that their loyalty program was one of the major factors that led to their record-breaking 26% profit boost as well as an 11% rise in their total revenue. By giving customers an incentive to spend money, your company not only increases sales but also customer satisfaction.
• By offering customerstiered discounts, free gifts, exclusive deals or earned bonuses, the customer feels that they are getting the best deal possible. For the retailer, loyalty schemes also allow you to create a database of customer details (emails, phone numbers etc.) and build brand awareness. If there is something in it for the members, they will be more open to marketing communication.
This fascinating TED Talk by Devora Rogers looks at the future of retail and the science of shopping.