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3 online retail trends for 2018: How you can prepare for them

By Hugh Fletcher

In 2017 we saw Amazon acquire Whole Foods, Apple announce Homepod as a direct response to Amazon Echo and Google Home, and Black Friday smashed records across mobile and online; okay, some things never change in retail! Retailing peaks aside, the year was as disruptive as any and begs the question: what will 2018 bring for retailers?

Will the rise of Zero UI (User Interface) continue to take hold, where we see screens become less prominent as voice assistants in shoppers’ homes become the norm? And will Amazon’s dominance accelerate even further into previously untapped markets? In 2017 it launched a live music business and fashion brand. These are questions that retailers should be asking themselves today.

The truth is that if you fail to innovate, your business will sit still in what has become a fast-paced, technology-driven sector. The rise of online will continue to flourish as shoppers crave convenience and innovation in every single customer experience.

This piece will analyse the 2017 trends that were most pertinent, look forward to 2018 in the online retail world and explain what retailers must do in order to prepare for the changes to come.

Retailers’ influence quietened – because shoppers put their trust in voice assistants

Google Home and Amazon Echo

Source: wccftech

If we were to look back just two years, it would be almost surreal to imagine a world where customers spoke to a tiny Amazon device in order to search the internet, add meetings to their calendar or shop for their favourite goods. While at first glance this may have seemed like a simple addition of connected speakers in the home, it means a whole lot more than that.

It represents the opening of doors into the home for some of the biggest tech and retail organisations in the world. And that in turn means their role will become increasingly important to our lives as their influence passively grows.

Consequently, it is evidence of the mass market adoption of Zero UI – most specifically voice-commanded assistants, which will see customers become less reliant on screens for their digital and online interactions.

This change will be significant for online retailers as it will revolutionise how shoppers search for products. As a result, the customer’s first digital mile will be the most important interaction. In layman’s terms, the default Google search will start to be challenged as shoppers use voice to directly retrieve results. All of this has the potential to challenge the way we shop, the way that we perceive and choose brands, and flit our retailer loyalty.

A balance must be found between embracing new technology and the customer’s needs

The question really isn’t about investing in either new technology or the customer’s requirements; it’s about embracing your customer base first and creating applications that benefit them. Whether you’re a luxury brand, small eatery or global retailer that sells everything, this is absolutely paramount.

The rules of retail generally are becoming more customer-driven. And what the customer wants is being led by innovation. No-one wanted a voice-activated personal assistant, but they are now shouting (or quite literally talking to Alexa) for choice, ease and convenience. The likes of Google and Amazon managed to get ahead of the curve by introducing it first.

Of course, we cannot simply ignore the operational and business requirements when using technology. Look at the rise of same-day/next-day delivery. It has put an enormous stress on companies’ fulfilment and operations systems, as inventory now has to be ready to be dispatched almost immediately after purchase. It’s therefore crucial that back-end systems are heavily interconnected and represent stock in real time.

This does mean that retailers wedded to their business models, slow to change, and with teams out of touch with how customers prefer to shop, are most likely to lose out in the competitive market.

Automated purchases

Source: econocom.com

The fantastic, but equally challenging, thing about retail is it’s in constant flux. From in-store technology such as virtual showrooms, to automated customer experience bots, it can be tough to predict what the future will look like. But one certainty is that online retailers should expect change to be the one constant.

Take the ideal of purchasing goods. We haven’t really seen a ‘new’ invention since contactless payments were introduced. Yet, without being consciously aware, shoppers are already heading towards more automated purchasing – automated orders based on customers’ pre-set preferences.

A trial version of the concept has already been used by Brita and Amazon. Through a Wi-Fi water filter, customers were able to automatically reorder filters via Amazon Dash. Albeit a quite niche example, it is a clear instance of Programmatic Commerce successfully working.

The success of Programmatic Commerce will heavily rely on customers’ adoption of subscription models. Amazon Prime was the first to really succeed in doing this, with over five billion items shipped worldwide through Prime last year. But that doesn’t mean a competitor can’t follow suit. Shoppers don’t really enjoy the act of purchasing toilet roll, or their favourite cereal for that matter. But they cannot afford to not do it. If these orders were placed through a machine-led programme it could eliminate the practical element of shopping and would naturally feed into shoppers’ thirst for a quick and intuitive experience.

If you fail to innovate, another smarter company will prosper in your place.

What Amazon has successfully done is create a culture of immediacy that customers crave. In doing so, it has cornered a huge portion of the market and built a platform synonymous with online shopping. We should not underestimate the company’s ability to be the leading innovator in online retail, and other industries for that matter.

Amazon Echo was the first device to conceptualise a Siri-style assistant in the home. And the purchase of Whole Foods was a direct route into the grocery market, building on Amazon’s existing Fresh service. But, there is nothing stopping another start-up or business doing exactly the same.

Retailers must take note from Amazon’s forward-thinking approach and look to build smart applications for their customer base. Do this, and you will surely thrive in what will always be a competitive industry.

 

By Hugh Fletcher, Global Head of Consultancy and Innovation, Salmon

 

Download the new report Salmon Commerce Futures 2018 report which lays out some key trends businesses need to start planning for.

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