By James Gagliardi and Brad LaRock
Predictions of record online spending promise to be good news for those selling online, but it’s worth noting that the environment is shifting. Next year online shoppers will have more choice and more product information at their fingertips than ever before. The rise of social networks, the mass adoption of mobile devices and the sheer number of companies selling globally are transforming how consumers research products and make purchase decisions. In turn, these connected consumers are leaving behind a digital footprint of their preferences and interests, giving online sellers an ever-growing source of knowledge about their customers. Entire e-commerce strategies are emerging around this proliferation of digital activity and resulting data.
However, companies that view e-commerce strictly as a website-driven channel will begin to struggle to compete in 2014 and beyond. Although consumers will still make a significant portion of e-commerce purchases on company websites, social media networks will increasingly be the initial point of contact and research. Consumers will look to their networks for information about products and services, and they also will look for discounts, offers and information about loyalty rewards programmes. Companies will actively encourage buyers to make purchases and talk about goods on their favourite social networks, and as social media analytics evolve, companies will seek better ways to measure the ROI from these social efforts.
Some big brands started and then closed Facebook stores because of underwhelming ROI. These stores didn’t take off mainly because they copied the company’s regular e-commerce store instead of providing a unique social commerce experience. Next year I think those companies may have another go at in-social network commerce. The brands that make the purchase experience a seamless part of the social experience, rather than a process that takes individuals away from engaging with their friends, will have the best chance of success.
Meanwhile, Big Data and analytics will evolve as e-commerce merchants collect and analyse data to discern shopping patterns that have predictive value. Fitness equipment manufacturers, for instance, have begun to link their products with smartphone apps, providing users with long-term analytics on their heart rate activity, running distances, speed, calories burned and other training metrics. Users benefit from the digitally enhanced experience, and the data they create also provides important usage insights that can have far-reaching impacts on both product design and e-commerce strategy.
Data will not only help guide product design and set online sales strategies, but also be the driver for capturing more customers, upselling to existing customers and retaining them for the long term. The underlying tools for the management of this data will only grow smarter, faster and more affordable as companies catch up with an overabundance of data. Big Data analytics should emerge in 2014 as not just a buzzy trend, but a core business practice that e-commerce firms use to understand their businesses and their customers in fundamentally new ways.
By Cyber Monday 2014, we might be seeing a rather different, more social, connected and relevant experience.
About the author
James Gagliardi is vice president of product and innovation, and Brad LaRock vice president of marketForce, at global e-commerce firm Digital River.