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Candice Ong, Chief Commercial Officer, Shopback
Mention “E-Commerce” and “Retail” in the same sentence, and the word “disruption” inevitably comes up. Yet it is easy to forget that less than two decades ago, the debate was whether E-Commerce business models were even viable, to begin with. The internet and other advancements in hardware, cloud computing, and logistics have since enabled rapid changes in how people access goods, services, and even entertainment. For instance, we often forget that App stores only started about a decade ago. These changes have provided greater customer-centricity by bestowing consumers with greater choice and convenience, thereby elevating customer expectations. Based on my observations, I see three trends enabled by technology which will continue to drive consumer behaviour and transformations in E-Commerce in the near term.
Augmented Reality (AR) providing Authentic Retail experiences
To some, AR may still seem like a concept available only in science fiction, yet many elements have already entered our daily lives. It is easy to overlook how popular apps such as Snapchat, Instagram, and Pokemon Go have made AR commonplace by weaving it into genuinely fun experiences such as face filters or games. In recent years, Alibaba released an AR game called “Catch the Cat”, that required users to catch an eponymous cat across real-world stores to earn special prizes. On an ecosystem level, Apple moved to allow a larger number of developers to build AR Apps with the release of ARKit in 2017. Google followed suit by releasing its ARCore platform in 2018. These developments portend the democratisation of AR technologies and herald many new applications.
One such application is in providing better visualisation of products that once were only presented in 2D interfaces, thereby dramatically improving the online shopping experience. While ARKit downloads are largely dominated by games, one of the most popular non-gaming Apps is Ikea’s “Place”, which enables visualisation of Ikea products at home. Instead of needing to visit a physical store, consumers “try” new products in their own living room.
While online shopping has increased convenience dramatically, many consumers are still uncomfortable with biting the bullet. This is especially relevant in fashion E-Commerce, where the sensory experience is especially amiss for gauging size and fit. While industry players such as ASOS have included demonstration videos of how clothes might look like on a human, AR would take product visualisation a step further and allow consumers to see virtual products on themselves or in their environment. For instance, Sephora Virtual Artist enables consumers to try on different make-up looks from the comfort of their own home. Other retailers are likely to dabble in this space as well.
If this trajectory continues, we will not be far away from a future where a seamless and authentic AR shopping experience feels commonplace.
The Age of Discovery beyond Text
Since the advent of the Internet, search has been dominated by text.
While online shopping has increased convenience dramatically, many consumers are still uncomfortable with biting the bullet
As the adage goes, “A picture paints a thousand words”. If knowledge could be as easily conveyed through pictures, perhaps image search would not trail text search on Google. com. Traditionally, image search provided visual results only after a user keyed in a text query. However, new techniques, such as reverse image search, now enable an image to replace text as the search query term, returning results containing similar images. In other instances of visual image search, AI-powered engines take it a step further by identifying and tagging different elements found in an image.
As techniques in computer vision become more refined and the quality of images from mobile devices improves, consumers will be able to take photos of objects on their phones and search for them more easily. This will enable a different process for discovery and inspiration.
Visual search is less likely to be concentrated on a single platform but across dominant E-Commerce players and even social media platforms. Lazada, for instance, launched its AI Search function on mobile in September 2018, while other platforms such as eBay and Rakuten also added such features previously. Pinterest, with its Pixie recommendation engine, already inspires millions of users every day.
In the coming years, “googling” for an item may be quite a different experience compared to what it is today!
“I Buy” to “We Buy” – Social Commerce taking off
The element of human interaction used to be largely lacking in E-Commerce, apart from reading user reviews or speaking to customer service. Conversely, social media platforms were largely limited to commenting, liking, and sharing user-generated content.
Today, we are seeing the two worlds converge, with E-Commerce players tapping on content creators, as well as social media platforms better-enabling commerce and transactions. One example of the latter is how Instagram has moved away from redirecting consumers to landing pages and instead, implemented shoppable posts. These posts allow users to buy products via links on product tags and information embedded in a post.
The shopping experience has also become a truly social one, especially in Asia. Pinduoduo, a Chinese E-Commerce platform allows groups of users to crowd-buy goods at a bulk discount. Recently Lazada and Shopee, both dominant South East Asia E-Commerce players, also incorporated social elements through their “Slash” deals, where users collectively ‘slash’ the prices of goods that they want to unlock.
Going a step further in bridging connections in a digital world, mobile live-streaming has enabled interactive commerce and even companionship through commerce. Informed hosts broadcast their live streams using a smartphone, demonstrating products and answering questions from their audience in real time. This is particularly the case for fashion and beauty products, where audiences want to see these products being used and tested by experts and enthusiasts.
In our hyper-connected world, it seems ironic that people feel even more lonely and isolated. Perhaps this is what fuels their desire to find a connection through the buying experience.
Summing it Up
Beyond these three trends, other developments may also shake up the E-commerce ecosystem. Virtual reality experiences, Voice Search, and online/offline integrated experiences (e.g. Alibaba’s Hema, Habitat by Honestbee) may all exert their influence on the landscape at one part of another. Yet, they remain in the hands of a few but important players right now and are slightly further away from being had by many.
Conversely, the aforementioned trends of AR, Visual Search, and Social Commerce present more immediate opportunities. They underscore the continued centrality of the mobile phone and the social experience.
In many ways, App-based E-commerce is only just getting started and much work remains to be delivered on that promise to consumers.