Trends in Online Retail; a review of 2016


December 7, 2016

At the beginning of 2016, Maru/edr released the 33rd edition of the Digital Customer Experience Retail Benchmark report. The sixteenth edition of the annual Christmas wave revealed five key trends that had the potential to set leading retailers apart in 2016. Here, twelve months on, Associate Director for Retail Kat Hughes examines those five trends and reviews how the next twelve months are already shaping up for the retail market.

2016 has been a turbulent year.

Alongside unforeseen political events shaking markets, new technology and growing consumer expectations have once again changed the shape of the retail industry.

Back at the beginning of the year, we set our vision for the retail market in 2016, using our two decades’ worth of retail research expertise to uncover and understand expectations and trends over the next twelve months.

Now, as the year draws to a close, we review what 2016 has bought for retailers and how the next twelve months are already shaping up.

1.| Mobile sales to overtake desktop

Our first prediction came to fruition barely thirty-days after the launch of our report.

In February 2016, IMRG released figures showing that, on average, fifty-one percent of online purchases were now being made from a mobile device, with the online trade body hailing it a “major tipping point” in online commerce.

It means the overall digital customer experience is more important than ever before.

In the past, retailers have traditionally struggled to replicate desktop experiences to a smaller screen – during the inception of mCommerce, overall mobile satisfaction rates lagged, on average, ten percent behind desktop.

amazon-and-marks-and-spencer

Then and Now; Marks and Spencer’s and Amazon’s mobile site 2016 and 2016

Now, top retailers are recording satisfaction rates that match, or in leading cases such as John Lewis, outperform their desktop scores. It means that as more and more of us switch to the smaller screen, we can expect to see overall mobile experiences continue to improve.

2.| One day, flash sales events will cement the importance of fulfilment and logistics

Fulfilment and logistics have come to the forefront this year as retailers continue to squeeze delivery time frames.

The roll-out of Amazon Prime Now throughout 2016 means that well over thirty percent of the UK’s population now have access to one-hour delivery slots – and has also spurred Argos to offer same-day delivery as Next and Asos both slash their next-day delivery cut-off to midnight.

Delivery has now become a key differentiator for retailers – and is one of the key four factors that retailers must follow in order to achieve online success.

3.| A single customer view to deliver the right experiences to the right people at the right time

Personal commerce has come to the forefront on online retail this year – driven mainly by our two previous retailing trends.

Personalisation lies at the heart of instant gratification. With the growing use of mobile devices and the ever-shortening of delivery slots, consumer’s expectations are on the rise. Shoppers want what they want, when they want it. It means retailer’s increasingly have to adapt and tailor journeys as they attempt to anticipate consumer needs.

This growing focus on personalisation does not come without issues however. Research released in 2016 showed that over half of shoppers will not wait more than three seconds for a site to load. But the type of personalisation now demanded by shoppers includes a growing use of content, images, information and integrations – all which impact site speed.

One key challenge for retailers in 2017 therefore, will be solving the dilemma of personal commerce and speed.

4.| Video and interactive content used to drive sales

Retailers have begun to cautiously experiment in this area – especially those brands who place a clear emphasis on inspiration for their site.

Twelve months ago, we suggested that one area that retailers could benefit with video content is customer reviews. Maru/edr retail reports have suggested time and time again that customer reviews are vital to the success of product pages – retailers cannot impress with added features without the basics of customer reviews. And video is a fantastic way to bring those reviews to the surface and grab a shopper’s attention.

But video and interactive content has taken more of a backseat in 2016 as retailer’s attempt to focus on instant gratification and personalisation. Until retailer’s can solve the winning formula of delivering a personalised experience at speed, richer content across sites will likely remain a second priority.

5.| The use of social media will increase

On the surface, retailers are still to finish the social media puzzle.

But social media is not just about direct sales. Maru/edr research in other sectors has revealed that higher levels of social engagement often leads to a more emotional connection with a brand – which has proven links with loyalty.

Retailers who have achieved high levels of social media engagement this year include Nike, Michael Kors and Burberry – and all focus on visual storytelling. Social channels have now well and truly cemented their importance in the role of ‘the browser’ – shoppers who visit sites to gather ideas and inspiration and come with no particular purchase in mind.

As our latest set of online retailing results (due to release next week) suggest, retailers are currently struggling to balance functionality, personalisation, inspiration and speed – signalling the likelihood that engagement is set to remain a core priority in 2017.

2017 and ahead

With 2017 just around the corner, what do the next twelve months hold for retailers?

Maru/edr’s latest retail report ‘Online Customer Experience Review; preparing for 2017’ is out now – make sure you’re one of the first to read a copy by registering your details.

 

Kat Hughes is Associate Director for retail at Maru/edr – and responsible for leading Voice of the Customer programs across UK and international retail sites. Contact Kat directly by emailing kat.hughes@maruedr.com or connect on LinkedIn.