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E-COMMERCE 2020: REDEFINING CONVENIENCE
By Amit Mangwani, Director Retail Marketing - Asia Pacific & Japan, Intel
Convenience has become a huge driving force behind purchase decisions. With e-commerce bringing stores to consumers’ screens, convenience is at their fingertips. And this can only get better, once e-commerce businesses start applying some of today’s cutting-edge cognitive technologies like machine learning (ML) to help make e-commerce more intuitive. A well-known instance of ML done right is Amazon’s recommendation engine that suggests products customers may want based on previous searches. Owing to the intelligent suggestions, 35 percent of all sales emerged from the engine.
Businesses, especially those online, have deep data reserves that can be tapped into with cognitive technologies. ML, combined with big data analytics, can generate insights based on this data, like those by Amazon’s recommendation engine, to drive relevant sales. These new technologies will transform e-commerce, redefine convenience, and make a shopper’s journey more seamless by 2020. This will encourage more people to shop online, which is perhaps why analysts predict that e-commerce sales could go from $1.915 trillion in 2016 to $4.058 trillion by 2020. So, which tech driven e-commerce trends are likely to disrupt retail by then?
Today’s consumers are spending 90 percent time on smartphone messaging apps. This is compelling e-commerce businesses to consider a very powerful tool of communication–messaging. Today, it is gaining popularity as chatbots, which are artificial intelligence (AI) powered conversational commerce tools enabling meaningful two-way conversations between the business and consumer. Take the case of Niki, an AI-based chatbot that India’s Paytm leverages to make customer access products and services smoothly via conversations. These conversations, made intelligent by cognitive technologies bring great promise to e-commerce by streamlining shopping and facilitating purchase decisions. This could be why 35 percent consumers are demanding chatbots.
Very soon, conversations between shoppers and businesses will become highly personalized with chatbots recognizing shoppers and associating previous purchases and shopping behaviors, making the tools invaluable touch points for businesses. They will also reduce the number of steps customers go through, from “hello” to checkout. Conversational commerce of the future will also have a voice component and function like Siri, with a growing number of users showing an inclination to use the interface.
The new technologies will transform e-commerce, redefine convenience, and make a shopper’s journey more seamless by 2020
Anytime, Anywhere Shopping
A PwC study revealed that 2/3rd participants in Singapore and Malaysia, and 3/4th in Thailand purchase products on their phones. This is not surprising because research shows that over half of Asia-Pacific consumers cite convenience as a key reason for purchasing with their smartphone. Consider this, during the holidays, when people juggle to-do lists, convenient gift shopping is a big attraction. That’s the need that Facebook identified in the Philippines, during the Christmas months, helping businesses to tap into the mobile-first shopper.
Personalization, enabled by new technology, will drive sales in m-commerce in the coming years. Geo-fencing is one such tool that will provide highly relevant customized offers and recommendations on their mobile phones. Augmented reality (AR) too will likely play a role in uplevelling personalization and convenience. Take the case of Max Factor, a popular cosmetics brand, which leveraged an AR-based tool by Blippar to allow shoppers to see how products look on them, before making a purchase. Another innovation, Mobile Image Recognition (MIR) technology, will redefine shopping by allowing shoppers to capture what they see, find, and buy it online.
Follow. Like. Shop!
Social media has been evolving, with shoppers using it to buy products, right from their accounts on Facebook and Instagram, platforms that enable these functions. It has now become a destination where brands can upload posts featuring their products, to encourage people to shop with ease. This is a completely new level of convenience that can enhance customer retention and loyalty, saving ‘social shoppers’, 31 percent of who are already on social media platforms for inspiration, the time they would otherwise spend looking for the same.
Today’s customers expect social media to offer a complete shopping experience—from browsing to getting feedback from friends, all the way to buying a product. The option to chat with e-commerce businesses anytime is an added benefit allowing businesses and shoppers to engage more deeply. Social media will truly become a cutting-edge channel for e-commerce. With ML, it can become a one-stop solution for shopping. With the right merging of technology and strategy, social commerce across the world could grow at a CAGR of 34 percent by 2021.
In fact, Instagram is already looking ahead, by making the current discovery to shopping journey more relevant and seamless with features allowing shoppers to explore products that interest them. Kate Spade New York, one of the early adopters of this feature, has seen great success, with their shoppers moving from inspiration finding to information gaining to shopping in just a few taps.
While the online shopping experience goes through these transformations, the final step in the customer’s journey – the delivery of products is also going through a shift. Driven by consumer demand for speedy delivery, same-day delivery is picking up pace, especially since Amazon Prime Air made its first same-day delivery with a drone. It brings convenience to customers and a differentiating edge to e-commerce businesses.
E-commerce has evolved significantly over the past 20 years. I believe that some of the revolutionary changes yet to happen will not take as long. We will see technology drastically transforming the virtual e-commerce landscape as early as 2020. Just as e-commerce is about convenience today, it will be more about personalization in the coming years, with the right intersection of retail and cognitive technologies.