Looking Back: 2015 Online Retail Trends (Part 2)

By Julian Thumm | 08 Jan 2016

Power Retail looks back at 2015 to examine the online retail trends that flew and failed, and looks forward to speculate on what 2016 has in store.

Yesterday, in part 1 of Power Retail‘s look back at 2015’s online retail trends we covered mobile, internationalisation, Pinterest and Instagram and the bricks-and-mortar renaissance. Now, let us beat on ceaselessly into the past to see what 2015 has set up for this year.

Agonising over the Millennial market

Millennials are some kind of freak species, a narcissistic and cashed-up bunch whose minds are as incomprehensible as Wittgenstein’s lion — at least that’s what marketers would have us think.

Over the past year, a deluge of ink has been spilled discussing how the Millennial market is the biggest and most affluent since the baby boomers, but a fickle market with a social conscious who are somehow immune to traditional advertising techniques. News flash: Millennials are no smarter or more discerning than any other generation.

millenials

One thing that seems to be missed amid all the agonising over the Millennial market is that Millenials themselves are not the problem; the problem is our perception or depiction of Millennials. They are not a homogeneous group that can be captured by all-encompassing statistics, as much as writers, marketers and retailers may try.

Common thought states that the Millennial age group loosely covers those born between the early 1980s and the early 2000s. That means we’re talking about ages ranging from around 15 up to 35. That’s a pretty broad demographic, and behaviour generalisations across such a broad and diverse group are bound to come up short. I’m pretty sure a 15-year-old boy is going to have pretty different shopping preferences from a 35-year-old man (trust me; I’ve been both). Yes, this is a glib point. But it’s a valid point nonetheless.

In 2016, it’s time for marketers to stop viewing Millennials like some amorphous mass of privileged cash or some fragile oddity and work out how to better tailor their messages to the diverse array of young consumers that Millennials represent.

Context-based target marketing and real-time analytics

Automated marketing, whether its retargeting or programmatic buying, is pretty much a given these days. Most retailers have some form of automated cart or checkout abandonment email system or retargeting process, and if they don’t they need to get with the times.

The savviest retailers these days are making use of context-driven marketing and real-time data to really target shoppers. Context-driven marketing targets shoppers with the products that matter to them most based on detailed shopping and search history, rather than following shoppers around with ads for some random product they looked at once on eBay.

Real-time data allows you to target specific product suggestions again based on prior shopping and search history from the moment shoppers arrive on your site. Real-time data can help with target marketing by quickly pitching relevant ads and products suggestions at shoppers while the brands are still fresh in their minds. Real-time data analytics also allows you to see in real-time what your customers are doing and identify issues in your sales funnel as they are happening, rather than finding out down the road after the sale is lost. Real-time data analytics can be a conversion lifesaver, especially when paired with features like LiveChat.

Expect marketers and data analysts to make great strides in 2016, especially in mobile marketing and analytics.

Logistics and fulfilment

This is a big one. For shoppers, one of the biggest gripes is around shipping costs, delivery wait times and return policies. Increasingly shoppers are expecting free shipping and returns. This puts massive pressure on retailer shipping costs and margins.

So what have we seen in 2015?

Click-and-collect has emerged as a major trend, with retailers offering in-store pick-up and third-party logistics providers acting as pick-up points (see ParcelPoint’s deal with Amazon). This has been great for lowering retailer shipping costs and has proved popular with shoppers. However, many retailers are yet to perfect the click-and-collect process, with shoppers reporting too many issues with these services. Same-day and two-hour metro area delivery has become popular with shoppers and more widely available. This an expensive option for retailers and usually available to only the largest retailers. Without significant developments in last-mile logistics, it’s unlikely that we’ll see smaller retailers providing these options in 2016.

In 2015, postal services worldwide made far-reaching changes to their business models in an effort to remain relevant. For example, Singapore’s SingPost moved into shopping mall development and Australia Post partnered with shipping software platform Temando, as well as ramping up package delivery options and launching 24/7 parcel lockers to minimise last-mile shipping hassles.

Other trends have made some noise but are yet to take off. Everyone’s excited about the potential of drone delivery (especially Jeremy Clarkson), with ongoing tests across the world. However, safety and airspace issues mean that commercialisation of this technology still seems a long way off.

Drone 2

Amazon’s latest drone prototype.

Crowdsourced delivery options like UberRUSH or Amazon’s ‘On My Way’ program have also emerged but are yet to make a significant retail splash.

Product personalisation/customisation

Product personalisation and customisation broke out as a hot trend in 2015. Personalisation/customisation is not new; pioneering retailers like Shoes of Prey and Nike (through its NIKEiD platform) have allowed shoppers to customise their products for a number of years now. Mon Purse emerged as one of the leading innovators in the personalisation field, with last year proving massive for the growing retailer.

But in 2015, personalisation went mainstream. In Victoria alone, Myer sold more than 400,000 personalised jars of Nutella in the lead-up to Christmas.

Myer Nutella

While one is tempted to write the Nutella thing off as a fad, retail personalisation is here to stay. Expect to see more retailers getting on board in 2016.

Digital payments

The hype around digital wallets has been building for a few years now. Android, Apple, Samsung, Android and many others now have digital payment platforms. However, a recent Accenture survey shows that while 52 percent of North Americans are aware of mobile payments only 18 percent use them on a regular basis.

With digital payment platforms building momentum in terms of availability and consumer acceptance, 2016 could well be the year where digital payments hit the mainstream.

Video content

Optimised product descriptions and professional photography are no longer enough. Shoppers are increasingly looking for and responding to branded video content. Video marketing and product demonstrations can be entertaining, engaging and informative for shoppers, and can help retailers create a brand narrative. Video content with high production values can also help to establish brand credibility, boost SEO and increase conversions.

In 2016, expect to see an increase in video content not just on retail websites, but across video sharing platforms and social media.

Beacons

Beacons proved to be 2015’s little trend that couldn’t. While plenty of retailers experimented with beacons last year, no one really seemed to nail it. Many factors proved to be out of a retailer’s reach (e.g. shoppers needing to download apps and make sure their Bluetooth is activated when they enter a shop). Technological glitches also marred the rollout of a variety of beacon pilots such as in-store dead spots or beacons repeatedly greeting customers if they remained near the store entrance.

It’s unclear at this stage to what extent shoppers are welcoming the technology in its current iteration. Receiving a mobile notification about a product you just looked at might comes across as creepy and make a shopper feel over-surveilled.

The big (and at this stage under-explored) potential for beacons lies not in using them as a marketing push tool, but as an information access tool for shoppers. Perhaps the true value of beacons lies in their potential as a customer service tool, a way for shoppers to source product info, reviews, availability etc.

There’s plenty to keep an eye on in 2016. Let us know what you think in the comments.

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