With worldwide e-commerce sales predicted to come in at around $4.8 trillion and online shoppers expected to jump to 2.14 billion by 2021, companies that embrace online marketing strategies are likely to experience rapid growth.
The internet is fast becoming the shopping destination for many and while online shopping is currently at about 10 per cent in this country, that looks set to increase.
In the US, e-commerce will soon account for 15 per cent of all specialty retail sales, in the UK it is about 20 per cent and in China, e-commerce is 23 per cent of all retail.
How we purchase goods online, the delivery of that purchase and the return process as well as the quality of the experience is a top priority for businesses and consumers. And that applies to B2B as well, where e-commerce integration has become key.
Among the key trends driving this growth are direct connections between brands and their consumers, ever more sophisticated search technologies, and the delivery and logistics sector, which has finally adapted itself to take advantage of the opportunities presented by this changed retailing model.
Closer relationship between customer and brand: In the lack of any face-to-face social interaction, those online brands who listen to their customer's voice will be more successful. This could mean taking regular surveys and collecting feedback from customers. Implementing customer ideas will make the consumer feel valued and will enhance the shopping experience overall, leading to more clicks.
Micro-influencers: L'Oréal Paris is a much-respected and well-established make-up brand, with a very healthy six million Instagram followers. James Charles is a 19-year-old internet star who regularly features make-up tutorials on YouTube. He has almost 15 million followers on the same social media app, 2½ times that of L'Oréal. While big brands might favour the latest social media star, micro influencers – those with a much smaller but more dedicated and interactive fan base – have a level of commercial viability that may work for smaller, niche brands. Irish influencer Vogue Williams has well over half a million followers, while former model Pippa O'Connor has about 350,000 followers, and both regularly promote products on their personal Instagram accounts, either through paid partnerships or as direct advertising.
Voice: The smartphone arrived in 2008, around the time of the crash and the power of that device has changed shopping forever. Consumers now speak to their devices and voice will be used to interact like never before. Search queries are also becoming more conversational, so instead of basic key words like "taxi, Dublin", users might say, "Alexa, I'd like a taxi to bring me from Dame Street to Ranelagh in Dublin". Up to 50 per cent of all searches may be carried out by voice by 2020 so now is the time to bring your website up to date to be able to deal with this.
Personalisation: Advances in AI will help create the perfect customer experience. As retailers get better at figuring out consumer and behavioural data, this will lead to personalised marketing and the sellers who will see the most growth in sales will be those who invest in personalisation. We are already seeing "you might also like" when we are purchasing or are finished purchasing online and content is being customised based on the consumer's behaviour. Similarly, Alexa or a Google Home device is listening to everything that is said in the home environment and in doing so is learning your likes and dislikes, therefore tailoring your choices around that information. This will eventually lead to hyper targeting – we will be shown only those offers Alexa thinks we might like.
Bricks and mortar: Brands or retailers that only had an online presence previously are now taking up traditional bricks-and-mortar spaces too, be that in the form of pop-ups at festivals or events or even in the form of a permanent shopfront. They may be more like brand playgrounds and used as a way to guide consumers to their online store. This type of store allows the retailer to engage more directly with customers and provide them with an enhanced customer experience. There is generally a much higher conversion rate with bricks and mortar too. Traditional retailers shut down because they don't offer the customer something they can't get elsewhere so it's important to find ways to add value at your bricks-and-mortar store.
Delivery options: Consumers and businesses expect many more options when it comes to the delivery of their purchase or product. Depending on the courier, you may receive emails or texts when your package is about to be delivered. An Post now uses an alternative delivery option system – if mandated by the customer, they will send a text and an email with a link on the day before delivery. Customers can then select an alternative delivery option – a safe place, a neighbour, a collection point, an alternative address or another day.
Amazon: It's not going anywhere anytime soon and it's just going to get bigger and bigger. It is convenient for consumers and a favourable marketplace for sellers too. But Amazon is cutting into those retailer's sales, with its Amazon Basics range, for one – a range of products that are identical to some of the branded products it sells online but may be cheaper and come with better delivery options. To go up against this global giant may seem like a fruitless task but there are ways to go toe-to-toe with them, just not on price. Instead, think about customer experiences or selling products that are niche and unique.
Returns: Free returns are something we have come to expect when shopping with the likes of Amazon or Boohoo. But returns are two to four times greater than in bricks-and-mortar retail and hit $400 billion in 2017. Retailers say margins are strongly affected by generous returns policies. Therefore, Amazon announced in 2018 it would introduce a life-long ban on serial returners so in 2019 it's expected there will be more initiatives to deter returns. For the consumer, labelless returns – reducing the need for printing – is a one-stop web-based solution, allowing consumers return their items either through a collection or simple drop-off at a post office or post shop location.
B2B: E-commerce is not only for B2C and it's predicted that B2B online sales will increase worldwide to $6.6 trillion by 2020. Many B2B organisations now accept orders and payment via their websites.
Still some distance to travel
Irish companies still have a way to go on their e-commerce journey, according to research carried out by the IE Domain Registry (IEDR). “From our research in the SME Digital Health Index 2018, we know that three quarters of SMEs have a website, but how do they use them?” asks chief executive David Curtin. “Ninety-five per cent have at the very least a basic description of their services. An encouraging trend is that 73 per cent have mobile-optimised websites, up from just half last year.”
Despite these improvements, most SME websites are simply what Curtin describes as “digital business cards”. Only 34 per cent allow a customer book a service or make an appointment or reservation through their website. Less than a third (30 per cent) can take sales orders, while even fewer, 26 per cent, can process payments.
“Our research asked SMEs why they don’t have e-commerce capabilities,” Curtin continues. “The answers were mixed: 15 per cent said they don’t have the volume of sales to justify having an online store, while a combined 24 per cent are concerned about data protection and regulation, credit card fraud and cybersecurity.”
While Irish SME business owners conduct business online, for example, online banking, making online payments, ordering from suppliers online and shopping online, they don’t offer this convenience to their own customers. Indeed, most consumers will struggle to even find many Irish SMEs on the web. The majority don’t promote their services either through paid advertising or through search engine optimisation.
“There are huge benefits to being online,” Curtin concludes. “SMEs report that having a website and being online saves them time (27 per cent), reduces costs and overspending (20 per cent), increases awareness of their business (77 per cent) and increases revenue for their business (27 per cent).”