Four Ecommerce Trends Impacting the Industry in 2016

Earlier this year, I published an article for Econsultancy, covering my thoughts on digital marketing trends for 2016. Now that we're well into the 'new' year, I thought that I'd revisit and highlight four key trends impacting the ecommerce industry.

Transactional Data Drives Media Buying

Argos’ case study in joining up real-time advertising through the customer funnel is now over a year old, but it is still worth watching as an example of how you can use CRM and transactional data to drive media buying at the top of the funnel.

More retailers and transactional businesses will liberate their ‘back end’ data in this way and use it, increasingly in real time, to power advertising and more personalised customer messaging and offers. The idea of ‘streaming CRM’ will become more commonplace: read about streaming CRM in the context of travel here and note Sociomantic is owned by dunnhumby, in turn owned by Tesco; both companies are known much more for transactional data than media.

What does this mean for your supplier ecosystem? Should you dump your media agency and give it all to a management consultancy who is good with business/CRM data and can use programmatic platforms to drive the top of the funnel? Or do you open up your back office data to your media agency and target them on metrics like sales and margin rather than more traditional media metrics?

This is the war that is raging in agency-consultancy land. WPP bought Acceleration and Essence among others to bolster its data-throughout-the-funnel capabilities (note GroupM’s Gotlieb: ‘Media Needs To Morph From The Top Of The Funnel To The Transaction’) whilst all the big consultancies (Accenture Digital, IBM Interactive Experience, Deloitte Digital, PWC Digital, McKinsey, BCG, Cap Gemini, Tata etc) are rapidly encroaching on what is traditionally agency space.

So who will win these battles?

Obviously there is no simple answer. But certainly the once so sexy world of media and advertising at the top of the funnel is looking seriously threatened by its historically less glamorous below the line cousin.

Innovation in Omnichannel

The blending of digital and physical is not a new trend but it is one that will continue to be front of mind throughout 2016 and beyond.

Last year we saw a lot of interesting developments from the big ‘digital’ players in the physical world: Amazon opened a bookshop and turned domestic appliances into a retail channel via their Dash Buttons; Google opened their first store in London.

There was some impressive innovation around digital/physical from major brands too. Highlights for me included Burberry’s takeover of Piccadilly Circus screen to create personalised scarves, Domino’s Anyware service and rival Pizza Hut’s box that turns into a movie projector. The Starbucks Roastery App Experience was another great campaign, as was Carlsberg’s #happybeertime and its point of sale Barbox Platform. The #tweettoheat twitter operated bus shelter was outstanding and last, but most definitely not least, the Women’s Aid digital out-of-home campaign.

This year we will see further innovation, for example more programmatically driven digital out-of-home media.

Where it gets really interesting is when digital is used to create the physical. The opportunities around 3D printing are very exciting here of course. Eyeware business Warby Parker already provide a mobile app called Bookmark that allows customers to see a photo of themselves and buy the glasses but CEO Neil Blumenthal envisages "…that in the very near future you’ll be able to get your glasses prescription through your mobile device" and, who knows, perhaps you will be able to print them out at home too?

From a brand point of view it is interesting to see how digital is seeking out further depth and substance through a physical connection and manifestation. Evernote has partnered with Moleskine to create Evernote books for example. 3M’s Post-it notes, quintessentially physical, were given a quasi-physical manifestation as reborn retargeted banner ads.

Increased Integration of Ecommerce Capabilities

As organisations become more customer-centric and undergo ‘digital transformation’ there is a trend towards integrating ecommerce and digital teams and capabilities back into core functions.

The graphic below outlines a typical five stage evolution towards true multi-channel customer-centricity. Each stage has a typical corresponding job title and organisational structure for digital.

My observation for 2016 is that most businesses are somewhere between stages two and four. We are entering the teenage years for digital transformation. On the client side we will continue to see re-organisations, new job titles like Chief Digital Officer or Chief Customer Officer, new joint ventures, labs, innovation centres, start-up partnerships, accelerators and acquisitions in an attempt to kick start or accelerate their transformations.

Retailers are typically more advanced than other industry sectors in their level of digital maturity. So whilst we see Chief Digital Officers at some retailers, and will no doubt see more this year, I think it is more likely we’ll see Chief Customer Officers emerging (my stage 4 above). Some brands, like Tesco and House of Fraser, already have CCOs of course.

This trend towards not treating digital as a separate silo is borne out by Econsultancy’s recent research into Organisational Structures and Resourcing which shows that from 2013 to 2015 there has been a significant increase in the ecommerce capability being integrated into marketing (or other core function) rather than existing separately:

Mobile Commerce Opportunities

We all know that the fabled ‘year of mobile’ was about a decade ago. In the last two years most of us have finally got round to mobile-optimising our websites and emails typically using responsive design.

However, we are far from done with mobile. By most metrics mobile now IS the internet. And for most developing nations mobile is the internet. Last year, we passed the point where there are more searches on mobile than desktop.

For many businesses and customers things are not just mobile first, they are mobile only. Last year McKinsey published some fascinating research on mobile shoppers in South Korea: among those who shopped on a mobile device, 13 percent did not shop in stores, and 53 percent did not shop online. What’s more, over half a billion people access Facebook solely from mobile; sometime soon Facebook will become mostly a mobile experience with the majority of video views and sharing already mobile-dominated.

It’s also worth noting that Atom Bank will launch in the UK this year as a mobile-only bank.

Mobile messaging is HUGE and growing massively. Not just in B2C but B2B – you may have noticed LinkedIn’s recent developments in messaging? Messaging apps have caught up to social networks in user numbers and now dominate mobile.

Mobile commerce is predicted to grow to $31 billion next year, up from $3 billion in 2010. Walmart reported that over 70% of the traffic to Walmart.com is now mobile and that mobile accounted for over half of their orders since Thanksgiving – double last year. Alibaba’s Singles Day in China saw 27 million mobile transactions in the first hour.

Really, we shouldn’t be asking ourselves what our mobile strategy is anymore. We should be wondering what our desktop strategy is given that most of what our customers do is mobile.

Some mobile questions that should be on your mind for 2016:

• How might our brand be present in the notifications stream? What is a good notifications experience and how might we deliver smarter notifications?
• What could the trend towards conversational interfaces and bots mean for our brand?
• How do we capitalise on message and mobile-social commerce?
• What will the changes in mobile payment options (including Apple Pay roll out) mean for us?
• Following Google’s “Mobilegeddon” algorithm update last year what do we need to be doing in SEO for mobile this year?
• Now that native apps are being indexed for search what opportunities does that give us?
• Have we got our app strategy right?
• And, of course, mobile display (including native ads and mobile programmatic), mobile video optimisation etc etc….