In this article we are focusing on 5 disruptive trends that retailers have to pay attention to in their 2020 plans:
1. Visual Search
What is Visual Search?
Visual search engines allow users to find visually matching images based on the sample picture.
This technology makes search images much more intelligent than it was done before.
Visual Search has been around since the 90’s as part of the specialized image databases and then became available on the search engines of Google Images, Amazon and Pinterest.
The rapid growth of smartphone camera usage (1) was driving investment growth into computer vision technologies, including image recognition. With the recent advancement of AI machine learning technologies, Visual search has become ready for wide adoption by consumers. For instance, Syte one of the Visual search technology vendors for retailers was able to achieve 95% search matching (2) which is better than human sampling results.
How Retailers use Visual Search in Ecommerce?
Visual Search Market Adoption
According to the Accenture report (3):
- For 84% of retailers, image commerce or visual search is important or very important to their future success
- On the other hand, 56% of consumers are interested in technology, and 63% of them would even consider shifting at least half their purchases to retailers offering it
Users can capture a photo with their phone or upload a picture of the item that they like, then search and buy visually similar items.
When a shopper is looking at a particular product, the recommendation engine automatically finds and displays all visually similar items. This capability makes discovering the right product much easier.
Product catalogs need deep and accurate tags to help customers discover more of the most relevant products in response to their text searches.
Visual search engines automatically create accurate text tags for the product inventory solely from the catalog images.
Which Major Brands Use Visual Search?
The following brands have already employed Visual Search technology for their e-commerce experience Tommy Hilfinger, Kohl’s, Samsung, Oasis, BooHoo, Asos, JCPenny, Fendi, Tommy Hilfinger, Bed Bath & Beyond
Visual search in eCommerce examples
Boohoo.com is an online fashion retailer with annual revenue of GBP 580 million and Generations Z and Y consumers as their main target market.
- Boohoo realized an 85% increase in conversion rate for customers that used the Camera Search versus those who did not use it
- Boohoo saw a 125% increase in page visits per session for Camera Search users
Atterley is an online marketplace with over 600 brands. Based in the United Kingdom, the eCommerce retailer ships to more than 94 countries, in 80 languages and 10 currencies.
Deep Tagging, powered by Syte visual search technology provides accurate tags that save time and provide customers with richer tags to search from, better product information, and an easier journey to find exactly what they’re looking for.
London-based ASOS was founded in 2000 and has become a top online fashion destination for 20-somethings around the world, with its purpose to give its customers the confidence to be who they want to be (6).
ASOS mobile app has a search tool called Style Match that lets shoppers take or upload a picture, and then discover products from their catalog that match it. Shoppers can match products from more than 850 brands and over 85,000 items with this tool (7).
Jason Gregory, Senior Product Manager at ASOS: “Searching using images through Style Match offers a more frictionless experience – the customer doesn’t need to think about how to describe what they are seeing, and instead we can connect them straight to products that are visually similar” (8).
2. Headless Commerce
What is headless commerce?
Headless commerce separates the store front-end design from the back-end infrastructure, empowering you to connect to and from virtually any platform.
The model of the traditional e-commerce is an online store that combines a front-end website and backend administrative tools to manage the product catalog and online orders. The frontend and backend are hardwired to work together as one system. This old ecommerce site model does not work well with the modern omnichannel retail where all existing channels have to offer customers a seamless shopping experience.
When retailers need to manage customer interactions across multiple touchpoints they need a commerce engine that is able to connect multiple front-ends such as in-store kiosks, POS, social media sites, mobile, and desktop ecommerce stores or Alexa orders with a single back-end. This new approach to ecommerce platforms architecture becomes known as headless commerce.
The leading ecommerce vendors such as BigCommerce (9), Magento (10) and Shopify Plus (11) made their platform capable to support headless ecommerce model.
Headless eCommerce Pros
Ability to deliver commerce content to any current and future channel
Retailers have to rethink their content model. Consider each of your store product pages as a single-page website that has to deliver everything that customers need to make a purchase decision. This information is not limited to the product image, description and price but also includes reviews, videos, user manuals, warranty, shipping, return/refund policies and other relevant content.
The headless systems should be able to understand the content and adapt to the presentation by different devices such as mobile screens, text-to-voice interface or any other touchpoint.
Product content can be delivered through multiple sites across different brands, divisions, and portfolios based on marketing demands such as microsites, kiosks at tradeshows, or social media stores.
Flexibility to create frontends that deliver optimal experience channel comes with extra cost.
Since headless commerce platforms do not provide you with a frontend, developers have to build multiple frontends or integrations for each channel. This development can become time-consuming and costly.
3. Sustainable Ecommerce
What is the sustainable ecommerce business?
Here are four criteria to define the sustainable ecommerce business (13):
- It incorporates principles of sustainability into each of its business decisions.
- It supplies environmentally friendly products or services that replace the demand for non-green products and services.
- It is greener than traditional competition.
- It has made an enduring commitment to environmental principles in its business operations.
There are growing concerns about the negative impact of the ecommerce rapid growth on the environment. E-commerce may potentially increase transportation emissions and package waste. The rise of sustainable e-commerce is the response to this environmental sustainability concern.
By cutting back on over boxing, or items being sent in multiple boxes, Amazon has eliminated more than 500 million boxes and 244,000 tons of packaging materials. CEO Jeff Bezos also recently signed The Climate Pledge on behalf of Amazon to advance Paris Climate Accord goals by 10 years, even though his own company could arguably be doing much more for sustainability and climate change. (12)
Another e-commerce leader, Target, recently redesigned its three most common box sizes with fun designs that encourage shoppers to reuse the boxes and turn them into race cars, dog houses or other items.
Reasons to go sustainable in ecommerce
- You’ll eventually be required to do it.
If you’re not required to monitor or mitigate your business’s environmental, economic, or social impact already, you probably will be soon.
- It can save you money.
“Properly packaged goods have a better chance of arriving intact, reducing the number of returns and the overall environmental footprint” (14)
- It can help your brand.
When companies are willing to invest in creating sustainable solutions to navigate the evolving demands of today’s shopper, they will see a return on their investment beyond operational efficiencies. (15)
More and more, customers care about environmental stewardship and socioeconomic justice. They’re starting to show it in their online purchases. If your products were made in Canada, not tested on animals, use of fair-trade and recyclable materials, and fair labor practices showcase that information on your site, don’t hide it on some page, that no one visits.
4. Subscription eCommerce
What is Subscription eCommerce?
Subscription eCommerce is an eCommerce model in which a customer must pay a recurring price at regular intervals for receiving a product or service.
According to McCMcKinsey’s research, the subscription e-commerce market has grown by more than 100 percent year over year, between 2011 and 2016. At the beginning of 2018, the research shows that 15 percent of online shoppers have signed up for one or more subscriptions to receive products on a recurring basis, frequently through monthly boxes. (16)
Subscription eCommerce Market
E-commerce subscribers tend to be younger urbanites with money. Compared with the general US population, they are more likely to be 25 to 44 years old, to have incomes from $50,000 to $100,000, and to live in urban environments in the Northeastern United States. These subscriptions particularly appeal to women, who account for 60 percent of them.
Subscription eCommerce Opportunities and challenges
By 2023, 75% of organizations selling direct to consumers will offer subscription services, but only 20% will succeed in increasing customer retention (17).
Subscriptions are a great way to have repeat business. Many products could be sold on subscription levels, including groceries, personal hygiene items, cleaning supplies, etc.
Most ecommerce platforms support subscription services. Some consumers are hesitant about committing to subscriptions as it automatically charges the cards every month. The key is to make it easy to unsubscribe and send timely reminders in order not to let people forget their subscription status.
5. Thing Commerce
What is Thing Comerce?
The term “Thing commerce” is used to describe the Internet of Think (IoT) enabled digital commerce. “Thing commerce” opens a new business opportunity for brands selling to consumers as well as business to business commerce.
Below are some of the “thing commerce” new ways of selling and marketing examples:
1. New subscription and renewal models for businesses
The smart sensor can detect when it is time to replace consumable materials or components such as printer ink, paper, furnace, or water filters, and place the order automatically to the supplier without human participation. By 2020, 5% of all digital commerce transactions will come from a smart machine (18).
When it comes to large-scale industries, IoT based sensors can also be programmed to send alerts when the warehouse shelves are low on inventory or empty (19).
2. Instant and automated purchasing for customers
Consumers are using Siri, Alexa, and Google Assistant to compare prices and research products more so than make purchases. This trend is changing as the global connected market is anticipated to reach about $150 billion by 2023. The growing popularity of voice-assistance devices will increase voice purchasing volumes (20).
3. Thing marketing
Thing marketing is the process of promoting and selling products or services to things (18). Traditional marketing is about understanding the target audience and creating a message that appeals to prospective customers’ emotions. How does a company communicate with a thing that does not have feelings? Marketers have to figure out what combination of actions needs to happen to reach the human customer.
These disruptive eCommerce trends are influencing not only your business but the overall competitive landscape and your customer’s expectations.
Don’t let these disruptive eCommerce trends leave you behind.
Start preparing your action plan, prioritize your investments in 2020 and pick the right partner who will help you navigate the disruptions.
Stay tuned to more detailed articles from us on each trend coming in 2020.
- Sales Report: 2019 Thanksgiving Day, Black Friday, Cyber Monday, https://www.practicalecommerce.com/sales-report-2019-thanksgiving-day-black-friday-cyber-monday
- Visual Search Benchmarks for E-commerce, https://www.syte.ai/visual-search-benchmarks-for-ecommerce/
- Delivering For The New Consumer, https://www.accenture.com/_acnmedia/PDF-85/Accenture-Report-The-Changing-Consumer-And-The-New-Definition-of-Retail.pdf
- Case Study: boohoo.com https://www.syte.ai/wp-content/uploads/2019/07/Syte-Case-Studies-Boohoo.pdf
- The 5 Best Case Studies for Visual Search, https://www.syte.ai/5-best-case-studies-visual-search/
- “Microsoft Customer Story – Online retailer solves challenges ….” 3 May. 2019, https://customers.microsoft.com/en-us/story/asos-retailers-azure.
- Shopping with Your Camera: How Visual Search Is Transforming eCommerce, https://towardsdatascience.com/shopping-with-your-camera-how-visual-search-is-transforming-ecommerce-1bee5877994e
- How ASOS is encouraging customers to talk their way to more stylish looks, https://www.thinkwithgoogle.com/intl/en-gb/success-stories/uk-success-stories/how-asos-encouraging-customers-talk-their-way-more-stylish-looks/
- The Headless Commerce Showdown: The Unseen Strategy Retailers Use to Win Ecommerce Market Share, https://www.bigcommerce.com/blog/headless-commerce/
- The Future Is Headless, https://magento.com/blog/best-practices/future-headless
- Shopify Headless Commerce, https://www.shopify.ca/plus/solutions/headless-commerce
- Does E-Commerce Care About Sustainability?, https://www.forbes.com/sites/blakemorgan/2019/11/05/does-e-commerce-care-about-sustainability/#61e5642d12c8
- Sustainable business, https://en.m.wikipedia.org/wiki/Sustainable_business
- Sustainable Ecommerce: What It Is, Why It Matters, and How You Can Build a Sustainable Brand, https://www.campaignmonitor.com/resources/guides/sustainable-ecommerce-what-it-is-why-it-matters-and-how-you-can-build-a-sustainable-brand/
- Can E-Commerce and Sustainability Co-Exist?, https://longitudes.ups.com/can-e-commerce-and-sustainability-co-exist/
- Thinking inside the subscription box: New research on e-commerce consumers, https://www.mckinsey.com/industries/technology-media-and-telecommunications/our-insights/thinking-inside-the-subscription-box-new-research-on-ecommerce-consumers
- Top 10 Trends in Digital Commerce, https://www.gartner.com/smarterwithgartner/top-10-trends-in-digital-commerce/
- What Happens When Things Become Customers?, https://www.gartner.com/smarterwithgartner/what-happens-when-things-become-customers/
- 3 Ways IoT Is Changing The eCommerce Industry, https://artplusmarketing.com/3-ways-iot-is-changing-the-ecommerce-industry-a9a88515840b
- The Internet of Things Will Fundamentally Change eCommerce, https://www.pcmag.com/news/368031/the-internet-of-things-will-fundamentally-change-ecommerce