Beyond Ecommerce: The Near Future of Digital Spending Is Not For The Faint Of Heart
The future of ecommerce is that shoppers will have the fabric of their day-to-day lives rendered shoppable.
The foundation of this system are assembling: Voice shopping is projected to reach $40 billion in the U.S. and U.K., collectively, by 2022; smart TVs are projected to account for up 70% of the tv market in 2018; and smart devices, like Samsung’s fridge, are integrating shopping into the mundane items we surround ourselves with.
These foundations are settling, but they don’t tell the full story of what ecommerce will look like in the near future.
As ecommerce technology develops, more and more items will become shoppable: posters in the background of TV shows, the dishes you like at your Airbnb, any image search, any video. This is what ecommerce companies have to prepare for — and make no mistake, it will be a threat to any retailer who is unable to adapt.
The Internet of Things Grows Voraciously
A consumer’s ideas about the IoT are behind the times. They love their smartphones and their laptops, and many are enthusiastically embracing assistants like Alexa and Google Home.
But the future of ecommerce is going to hinge on a huge number of interconnected devices — not just stand-alone tech but also smart lamps that tell you bulb life and smart doors that beep when they’re unlocked past a certain hour at night, for example. Devices will respond to voice search, apps, integrations, and visual AI.
Consumers’ homes are going to be a new marketplace. Cabinets, pantry shelving, bathroom mirrors — everything has the potential to be smart and therefore enable shopping. What if your pantry could tell when you were low on items and automatically add them to a grocery-store app? What if your cosmetics shelf could keep track of when products expired and automatically order new ones?
YouTube user Grensom racked up over 1.1 million views with his video on a custom-built smart mirror that displays the time, his agenda, the weather, and a music app.
Not only homes but also brick-and-mortar stores will be experiencing an influx of this type of tech. Smart mirrors in dressing rooms will let shoppers log in to their accounts, request that items be brought to them, give a virtual try-on of out-of-stock items, and act as a checkout all in one. Smart shelves will make custom recommendations based on a user’s specified input — dry skin, size 12 pants, and gluten-free items will be identified by the shelves.
All of this means more data, different purchasing sequences, different ideas around ads, suggestions, and more customization. And much of it will be visual and voice-based, especially in the home, where convenience is prized. The new frontier of ecommerce has to account for this new relationship between meatspace and the digital.
The Online Land of Abundance Meets Next-Gen Buyers
Consumers have more choices at their fingertips than ever before. Millennials and Gen Zers alike are risk averse financially, according to Investopedia and Bloomberg. Both groups, at least those in the United States, are worried about the economy and don’t spend as much as prior generations. As if that weren’t enough, Gen Zers and millennials will likely account for at least 60% of consumer spending in upcoming years.
These factors combined are a nightmare for ecommerce. More choices and tighter wallets mean companies will be fighting for precious consumer dollars. That will make the field more competitive than ever before.
While there are many implications involved, one big takeaway is that companies need to think more critically about the user experience of buying. Buying online or with an app needs to be better, easier, faster, and more fun than ever before. A run-of-the-mill ecommerce site will be a thing of the past.
Search has already seen a shift to voice and visuals. Custom options, one-click shopping, and easy repurchasing are cropping up everywhere. Companies must offer the easiest, most pleasing, most user-friendly options for web, mobile, and all IoT connections. Any friction could be the difference between a sale and a click away to another website.
Sephora’s new reorder option allows customers to stock up on favorite items with one click.
In addition to an increasing need for better UX, companies have to think about the way in which items are purchased. Seventy-one percent of Gen Z shoppers are interested in auto-replenishment on their purchases, and this has been an easy-to-spot trend. The most mundane items have moved to subscription services — think razors, for example, which exploded as a subscription in recent years.
Companies that could have a subscription component may have to consider implementing one in the coming years. Clothing stores might offer a quarterly subscription with new seasonal items; grocery-delivery providers are steadily encouraging more-automated, subscription-like behaviors.
In the era of endless options, hooking consumers on your website, AI, app, subscriptions, or smart devices will be the difference for many ecommerce companies’ bottom lines, because connecting with consumers on multiple points and embedding into their lives will be key to retaining customers.
New Ad Practices Emerge
The influencer market, while new, is already huge. At the beginning of 2018, monthly marketing spending among influencers had increased 5x over six moths, and it is projected to be up to $10 billion in 2020. It will continue to blossom and may bleed into meatspace, especially as we augment reality. Influencers, like the celebrities they are becoming, may be paid to not just show off a coat in a video but also wear it X days a month in public.
Beyond what we think of as “traditional” influencer marketing and product placement, companies are going to enter a hypercompetitive ad marketplace, often with disclosure practices that aren’t followed.
In November 2018, Wired reported that influencers were offered paid opportunities to place beverages on their desks in view of cameras while filming and told an ad disclosure would not be necessary. In 2017, a study by MediaKix found over 90% of the 50 celebrity social media endorsements they analyzed didn’t follow FTC guidelines.
Part of the reason things are becoming so fraught is that, with better technology, every single thing that appears in front of us in video or image form will be shoppable. Under this new system, simply having a product in a video or movie or on a TV show, even if it is never talked about, can mean a shopping opportunity.
This is different from the early days of product placement, when a logo or a discussion of an item was necessary to clue a viewer in to what the item was. Now, with a smart TV, any consumer may be able to just pause a video, click on an item, and have that and similar products pop up instantly.
Results in visual searches, especially those run by big companies such as Amazon, will be a space to watch. Coming up high in search is hugely valuable, and there will be new ad markets for promoting products at the top of the results for visual searches. You can already start to see this with Google’s ad results in text search.
A Google search for gold necklaces starts with a prominent, shoppable display of sponsored items that match the query.
To prepare for the future of advertising, ecommerce companies must have the best tech at their disposal. Perhaps more important, they need to build fearless, forward-thinking advertising and marketing strategies to maximize the benefits of the new shoppable landscape.
The Future Isn’t for the Faint of Heart
The future of ecommerce is going to be a shift for everyone. Consumers will be adapting to new technology and raising their expectations for shopping. Retailers will be fighting tooth and nail for attention in an oversaturated market. But nothing brings out the best in a company like healthy competition. After all, necessity is the mother of invention.