Shopping changes along with our society. When norms and values change, so do the needs of our customers. But what will change? What will the future of shopping look like? Nobody knows exactly. However, Jorij Abraham gave us his educated guess. According to the managing director of the Ecommerce Foundation, there are three key challenges: new technology, new consumers and new business models.
How New Technology Impacts the Future of Shopping
One of the new technologies that is already making waves in the current ecommerce landscape is mobile. Just have a quick look at your analytics module. How much of your traffic is already coming in through mobile? The younger your target audience, the higher this percentage will be. A great example of a company that takes full advantage of mobile would be Panera Bread. This chain’s mobile app will allow you to pay and order from the safety of your own home or even in-store when the staff is busy.
Augmented Reality and Virtual Reality are also on the horizon and they are coming in hot. It might sound like sci-fi, but AR-powered mirrors that allow you to preview clothing without trying them on are already being used in the boutiques of New York City. IKEA has its very own furniture preview app, that allows you to view IKEA furniture in your own room. Then there’s Warby Parker, whose glasses recommendations are powered by face recognition. AR is clearly here to stay, while VR will follow suit soon.
The final big technologies according to Jorij are Artificial Intelligence and voice. Through AI, we can personalize even further than we have ever done before. Stitch Fix is a company that supplies you with the right clothing. They use AI to tailor their service to the consumer’s needs. With every box of clothing they send, their recommendations become more and more accurate. But Stich Fix is not alone. Services like Spotify thrive on their algorithm and the data we provide them.
“Data is the new oil, but AI is the oil drill”
AI is present in every single step of commerce. Before the purchase, it is used to identify customers and their interests and target the correct audiences. During the purchase, it assists the buyer through predictive searches, sorting and recommendations. Once the purchase has been completed, you can follow up through AI-powered chat bots.
Meanwhile voice technology is opening the doors for conversational commerce. Jorij expects 50% of all searches to be voice-based by 2020. As the systems become more and more accurate, they will start popping up in an increasing number of places. Which is why more and more home devices like the Google Home or Amazon Alexa are starting to pop up across Europe.
Alexa takes it one step further through its integration with other electronics. Tired of running out of coffee at the wrong moments? A coffee maker with an integrated Alexa notices that you are running out and can simply order a fresh batch of coffee beans for you.
New Consumers Define the Future of Commerce
Cross border shopping is becoming more and more common in every household. Buying directly from Chinese suppliers has never been this easy. The young generations trust these Chinese web shops far more than the previous generations. And for good reason. In the past years, China has been able to consistently improve the quality of their products.
“China can produce things of 80% of the original quality for 60% of the price. Quite a good deal.”
Aside from that, priorities are changing. The new consumer puts him-/herself first. There are more Google searches starting with “Should I” or end in “For me” than ever before. On top of that, time has become far more valuable than money. Your product has to be convenient or maybe even save them time. For ecommerce, this means that proper UX design will only become more important in the future. At the same time, physical stores will be confronted with the old real-estate classic: “Location, location, location!”
In the future, more and more of your customers are going to be older. By 2050, 20% of the world’s population will be older than 60. However, this doesn’t mean that you shouldn’t invest in technology. Today’s older generations are far more active than the older generations in the 70’s. This trend will only continue and prove that age is just a number.
“If you want loyalty, buy a dog…”
Brand loyalty is at an all-time low. Today’s consumers think less about brands and more about price and convenience. In the future, this trend will continue on. There are only a select few brands that will stay strong. These brands are what we call love brands.
What Are Love Brands?
Love Brands are brands that go for a complete experience, fueled by customer data. They go above and beyond to make sure that the consumer gets what they expect. There are a number of ways that you can transform your brand into a love brand. Every love brand performs incredibly well in one of the FRESH factors. We’ll give you one good example for each factor.
The Final Challenge: New Business Models
“Products are commodities owned by Amazon”
Marketplaces are already a big deal in today’s ecommerce. However, they are only going to become more and more important. At the moment, Amazon and Alibaba are trying to conquer as much of the global market as they can. All the while Facebook’s Marketplace is trying to appeal to retailers as “Retail’s new storefront”.
Innovative business models are still appearing left and right. 10 years ago, nobody would’ve thought buying razorblades as a subscription could work. Stepping into a stranger’s car instead of a taxi? Absolutely absurd according to our past-selves. Yet services like Uber and Lyft are flourishing. The sharing economy is here, and it’s highly likely that it’s here to stay.
2 Questions That Will Determine the Future of Shopping
Jorij gave us 2 questions at the end of his presentation. Depending on how these questions are answered, we get a totally different view of the future of shopping.
How big will voice become?
Voice is already growing at a steady rate. It’s going to have an impact, that’s for certain. The real question is: Where will the growth stop? Will we stop at voice assistants or will we go beyond that?
Will China remain an open economy?
This is an interesting question to think about. Once China’s economy has reached a certain maturity, it could decide to become self-sufficient again. This would mean companies all over the globe would lose an enormous market.
We cannot be sure about what will happen in the future. We might be completely wrong for all we know. But that’s something only time can tell.