If one thing is clear from the holiday shopping season, it is that the web is already deeply embedded in consumers' lives and will only further entrench.
Search activity via mobile devices jumped 30% on eBay on Black Friday (the day after Thanksgiving), the traditional start of the holiday shopping season in the US. Sessions and sales at eCommerce sites are both up dramatically as both high street and mass merchant retail stores still fight to annualise their numbers.
As we move into 2011, we must recognise we are in a highly transformative time as changing customer expectations, commerce capabilities, and technology continue to evolve rapidly.
Initiatives that just a few years ago would have seemed a long way off – such as mobile commerce, app stores, multichannel order management, or embedding shopping on Facebook – are now squarely on the priority list of eCommerce business and technology leaders. And as consumer expectations, client needs, and the competitive environment continue to evolve, pressure on executives to make the right choices in technology and operational capabilities continues to mount.
Today's consumers have more access points and technology at their disposal than ever before, demanding convenience, choice, and variety in their shopping experiences. Companies need to continue to shift spending to enable the online channels or risk losing out to their competitors.
Yet, in the future, eCommerce will no longer be about the web browser. The web browser will be just one of many touchpoints that brands, retailers, manufacturers, and distributors will need to support to maximise transactions with customers. Already, an average of 3% of eCommerce revenue is coming from mobile web browsers and applications on smartphones such as the iPhone and Android powered devices.
Today's internet is actually a splinternet. The day of an eCommerce team being able to focus on building just a website are over and with the increasing complexity of consumer touch-points comes a real burden on eCommerce executives to support the underlying systems and platforms necessary to sustain them efficiently and at scale. While eBusiness executives once worried about optimising sites for various web browsers, today they must consider mobile browsers, mobile applications, location-based marketing, rich internet applications, as well as integrations with marketplaces and social networks. And many of these touch-points contain proprietary development languages, development techniques, and user-experience best practices hidden behind custom integration, including unique user accounts. The internet is splintering across these proprietary platforms. Despite the complexity, eBusiness executives must follow customers into these environments and support engagement with them in context.
And this extends well beyond online. We already see call centre applications and in-store kiosks powered by the eCommerce system. Tomorrow, we will see eCommerce-enabled tablet applications – such as those on the iPad – in stores or in the hands of direct salespeople working with customers.
Thin-client interfaces powered by eCommerce systems will replace point-of-sale (POS) systems. Payment cards, such as the Suica card in Japan, that leverage radiofrequency identification (RFID), phones with Near Field Communication (NFC), or the use of smart tags such as QR codes and Microsoft Tag will extend both marketing and commerce further into the offline world – into catalogues and magazines as well as onto billboards and signage.
We will see emerging customer experiences such as in-car Web navigation with location-based-marketing or home appliances connected to the web open up future commerce opportunities as more and more things connect to the web.
In the future, consumers will be encouraged to download mobile applications that tie to store "beacons" via free Wi-Fi or their cell networks, and these applications will detect their location in the store to enable targeted marketing based on their cross-channel purchase and browse histories, shopping lists, social networks, and marketing response.
This will deliver highly targeted and personalised coupons, offers, and even pricing, while helping the customers to navigate to the products and get access to fast service – on top of the latest deals. By providing benefit to the consumer for opting in, retailers and the brands they carry will benefit through more effective and targeted marketing.
But the complexity of the distribution and the supply chain will continue to morph as well, as more and more businesses attract demand via an aggregation of touch-points and fulfil through a multi-nodal supply chain combining their own stock in warehouses and stores, with drop-ship vendors, third-party logistics providers, and on-demand manufacturing. This requires strong core technology to manage inventory, order, and transaction data effectively.
Customers win through reduced costs and access to more product choices, and retailers win through reduced inventory carrying costs which are now shifting more and more to manufacturers, brands, and distributors.
Customers are in control
With the rise of social networks and user-generated content such as ratings and reviews, consumers are already wielding more and more control. But as features such as customer-generated lists, outfitting, and social sharing such as Facebook's Like grow in use, customers will begin to drive the merchandising and traffic and have influence over conversion factors.
While social commerce features are still nascent and need more experimentation before a verdict can be reached on the true influence of social on commerce, consumers and clients continue to seek transparency, participation, and sharing. And businesses will need to continue to respond.
Attempting to track and leverage social marketing data will become increasingly complex, requiring open marketing systems that can integrate disparate data sources and marketing opportunities with a degree of automation and testing not seen today.
Today's customers now expect consistent information, policies, fulfilment options, and service options. They expect to have companies meet or exceed delivery date commitments and accept returns across channels. Usability now extends well past optimising the online user interface; it extends to how you engage customers across-channel. It includes your policies and operations.
This can have a dramatic impact on the systems that are needed to support this omni-channel information, transaction, and service capability - supporting the consistency and contextual engagement the customer demands.
Companies at the forefront of enabling consistency and usability across touchpoints – such as Netflix, Amazon.com, and Best Buy – are seeing benefits in customer satisfaction, loyalty, and sales results.
The future of eCommerce is not as a standalone channel, but as one of the many channels working together with shared content and capabilities and being delivered in context to the customer to maximize business opportunities and support relevant and actionable experiences.
But this is by no means easy. It requires a commitment to a multipronged and multiphase set of technology, operational, and cultural transformations that may challenge how companies have done business in the past and test the resources required to move forward.
This was first published in December 2010