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What's in the cart for 2018?

Matthew Robertson, co-CEO of parcel data management platform NetDespatch, examines five key trends set to shape the e-commerce industry in 2018

The behemoth that is e-commerce shows every sign of barreling into 2018 with increasing momentum. Global e-commerce sales are predicted to hit almost US$2.8tn next year and the next step in an inexorable upward trend will see it hit nearly US$4.8tn by 2021. The UK portion of that is set to reach £203bn (US$273bn) – making it the third largest e-commerce market worldwide. A market opportunity this big creates a hotbed of innovation and development that is transforming the way that we buy and receive goods. As we look toward the coming year there are five key trends that we believe will fuel that transformation.

Virtual assistants powered by AI become mainstream
Back in 2016, technology research firm Gartner predicted that 85% of customer interactions would be managed without human intervention by 2020. Next year, retailers will really start to leverage the convenience and 24/7 availability of artificial intelligence (AI) fronted by chatbots for managing customer service queries and making intelligent purchase recommendations. Customers will become comfortable with interacting with chatbots as they browse online stores, in the same way they’d ask a shop assistant in a physical store. Linked to this is…

The drive for dynamic applications

Online retailers will continue to trespass on the comfort zones of brick and mortar stores by developing more ways for customers to get the “hands-on” feeling that an in-store experience provides. By scanning their faces and figures into dynamic apps, purchasers will be able to virtually try on clothes and make-up, making it more likely that they will be satisfied with the product when it is actually delivered. This reduces return rates for retailers and carriers alike and increases customer engagement with the buying process. NetDespatch knows from its own 2016 research that one of the aspects that consumers hate about online shopping is having to return goods.

In a similar way, dynamic augmented reality applications, such as BMW’s iVisualizer app, will begin to proliferate. These apps demonstrate products interactively – in BMW’s case turning any space into a virtual car showroom – enabling customers to build their own bespoke products, walk around them and see how they’ll look and perform, prior to purchase. This will assist customer decision making and enhance the virtual shopping experience.

On the topic of apps, with mobile commerce (m-commerce) expected to increase to nearly 50% of the total e-commerce market in the next five years, retailers who haven’t already launched applications that deliver a seamless buying and delivery experience run the risk of being left behind.

This time it’s (even more) personal

The drive for the ultimate in customer personalization will continue. Retailers will race to become even more intelligent and creative about how they use data to offer a total understanding of the customer universe. They’ll be aggregating customer interests, buying trends and using profile information to offer the right product, to the right person, at the right time and at the right price, in a bid to deliver an interactive experience that betters their rivals and delights their customers. Beware, though, that what initially delights the customer quickly becomes their basic expectation. Continuous improvement and innovation is the keynote of this industry and retailers will need to keep building their capability to avoid falling behind ever-growing customer expectations.

Speed and automation

Time is becoming the most valuable commodity for customers and e-retailers alike. Customers want to save time and retailers want to reduce the time spent on managing customer processes so they can focus on the quality of the experience. One way to do this is through increasing the automation of the buying and delivery process. The use of virtual wallets mean customers don’t have to input information into each retailer’s website – reducing the chance of cart abandonment when a process is taking too long. On the retailer side, the automation of processes such as fraud detection – flagging high risk transactions automatically – will make for greater efficiency.

Delivery innovation

There’s perhaps no bigger area of relevance for increased speed and automation than in delivery and returns. Customers will continue to demand a wide variety of flexible delivery options that work around their lives in terms of location and time. Making the options clear at the checkout and ensuring that despatch and tracking processes are fully aligned, to reduce the incidence of human error and get products flying out of the warehouse, will become even more critical. Will we see widespread adoption of drone deliveries in 2018? I’m not sure, but I do know that retailers will continue to innovate to overcome the challenges of last-mile delivery.

Every development and innovation in 2018 will fundamentally be driven by the desire to balance personalization and exceptional customer experience with automation and process efficiency to benefit customers, retailers and all those in the supply and logistics chain. One thing that will never go out of style is the fact that customer loyalty is the lifeblood of retail and the race to capture that loyalty will drive an exciting period of innovation in 2018.

December 14, 2017




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