Yes it’s crystal ball time again and this month I’m picking out my top five key trends that I think will dominate ecommerce strategy for 2014. I‘ve based this list on what I’m seeing evolve in the market, from my own research as well as working across a wide range of B2C and B2B Clients.
I had a lot of fun moderating Econsultancy’s Digital Cream roundtables on ecommerce personalisation. It’s clear that personalisation is high up the agenda for most companies but there’s inertia as people struggle to translate the high level concept into a pragmatic approach with a clear ROI model.
There are quick wins to be had with simple on-site personalisation. A good example is customising brand messaging and USP bars based on visitor type. Freepeople.com does this to differentiate messaging between US and International visitors.
There will be more focus on integrating analytics data with other data sources including customer surveys to increase segmentation intelligence and drive on-site and off-site personalisation.
I put together a slide deck on using a simple roadmap for ecommerce personalisation for a breakfast briefing session with Infectious Media (who are doing some brilliant work in real time advertising – just check the Waitrose case study).
2. Single customer view
Ah the wonder of the SCV! Alongside Big Data, it may sound like a pithy buzzword but it’s actually hugely important to long-term ecommerce success. Companies recognise the need to consolidate all sources of data at customer level but historically there hasn’t been the prioritisation of investment in tools and people.
I’m already seeing that change. There are more analytics and optimisation specialists in Client side teams and more effort going in to customising analytics implementations.
The key challenge for 2014 is to aggregate data across devices and channels using known customer IDs. This is a big challenge for universal analytics and a key goal will be to map the various customer IDs that brands have and consolidate them into a single customer record. For example, this could be data obtained via analytics cookies on desktop, tablet and mobile devices alongside native app data and store data for in-store interactions and transactions.
The ecommerce teams I work with are attacking this sensibly with a phased project; trying to reach the utopian SCV in one hit is probably fools gold. So most are starting with nailing the web analytics challenge by tying up devices and ensuring the analytics tools are configured correctly to match reporting needs across the business. The next phase is to sequentially layer other data sources such as CRM and stores.
3. Mobile and social ad spend
This is already happening and growth is predicted to continue. According to OFCOM mobile adspend in the UK doubled in 2013 to £8.04 per head and was up 127% to £429m in the first half.
Please note this doesn’t cover tablet – tablets account for more web traffic than smartphones but for me, it’s the value of mobile as a ‘between’ device connecting web journeys between desktop, tablet & store that means it will dominate planning in 2014.
For social, there’s a trend towards increasing budget for paid ads. For some brands, this is a portion of the paid search budget, for others it comes from the display budget. Social advertising used to be considered a brand marketing channel but improvements in targeting through networks like Facebook means it’s fast becoming a core acquisition channel.
Interestingly, 49% of Facebook ad revenue for Q3 2013 came from mobile and there are reports that it’s looking to ramp up the use of video in mobile ads. 25% of all mobile internet time is now spent on Facebook and the increase in video marketing options is likely to increase that next year.
I know retailers who are already ramping up budgets for Facebook retargeting, marketing to non-converting visitors within the Facebook platform. Facebook recently opened up the news feed (>1bn users) and companies like AddRoll provide solutions in this area.
4. Testing will increase/improve
CRO is spoken about a lot but it’s surprising how few companies have a properly structured testing program in place. By that I mean a clear methodology and planning process that uses data to inform test plans and use well-considered hypotheses to prioritise activity.
I do think that’s changing and ecommerce is maturing in that respect, partly driven by the increase in analytics specialists in Client teams.
I’m predicting more focus on putting in place a proper testing process that has clear ownership and is aligned with the overall ecommerce goals. This will help increase the reputation of testing at board level because the tests will be geared towards supporting business critical KPIs, rather than being ad-hoc which is often the case now.
For example, the Head of Ecommerce for a retailer I worked with explained his scepticism at the validity of test results shown to him by saying, “I know this test on colours showed that one version had a 3% uplift in click through but I’ve got no reason to believe it was down to colour alone as there is no science behind the test”. Hopefully we’ll see more people embrace structure to ensure that testing results have a genuine influence on ecommerce plans.
5. Same day delivery
It’s already here but I’m expecting this to increase in prominence. I previously talked about delivery as a key battleground for retailers and it’s going to be an even bigger bun fight next year.
Whilst I think Amazon’s recent news on drone delivery was a clever PR stunt (the economics of single parcel delivery just doesn’t stack up for me yet) it demonstrates how important consumer perception of delivery flexibility and speed is to the big brands. Amazon clearly wants to keep people thinking it’s got the best delivery service and will chuck big PR bucks at it.
A good example of providing same day delivery is Schuh, using Shutl for orders over £75. Just take a look at the positive word-of-mouth they’re getting on Twitter:
I spoke to Stuart McMillan, Deputy Head of Ecommerce at Schuh for the business view:
“Shutl was a logical next step for us as we already had a single view of stock, the stores were accustomed to dispatching orders. We’re also growing the size of our store estate, bringing more stock geographically closer to customers. These are important prerequisites for same-day delivery, so it’s not instantly available to every retailer, however it’s a good way to differentiate ourselves from many of our competitors.
Shutl is proving a hit with customers; it’s never going to be the same volume as our next day service but is still an important delivery option. It’s a particular hit with those with higher basket values. It’s also disproportionately London-centric, as there are high numbers of couriers, driving down the price. There is also a high population density, so couriers typically don’t have to travel as far. As it’s not a hub and spoke courier model, but point to point, we’ll be able to offer it right up to Christmas eve and would expect to see volumes rise dramatically in the last few days leading up to Christmas.
Another important Shutl offering is “Shutl Later”, where you can book time slots for delivery in to the evening. I don’t think we’ve packaged this as well as we could and we’ll certainly be looking to improve this user journey in 2014.”
I recommend following Stuart on Twitter because he’s a fountain of ecommerce knowledge – @mcmillanstu.
I expect same day delivery to become part of the hyper local ecommerce strategy, where brands focus in on local markets to drive traffic and revenue. Coupled with acquisition tactics like local search, rapid same day delivery strips back another barrier to purchase and is perfect around peak trading cycles when time pressure is critical. It clearly benefits multi-channel retailers who can tap into local store presence.
What do others think?
After I wrote this, I shamelessly tapped up my #EcomChat network on Twitter to ask the question, “If you could pick one big ecommerce trend for 2014, what would it be & why?”. I wanted to see if people were generally in agreement with me or I was a lone wolf!
Their answers were broadly similar. Here are a few choice quotes:
@magique83: 2014 will be the year of increased delivery options and flexibility. Eve del, shorter time slots etc.
@NeilHaffenden: personalisation – even more so.
@aattias: I think we’ll see a big rise in B2B companies providing commerce aiming to replicate B2C successes.
And the outlier, one I considered but decided it doesn’t yet have the legs to make it a big trend:
@Edwinbongo: Bitcoin – i think there is a decent chance it’s soon to go much more mainstream. If it does, it’ll be huge for international ecommerce.
Some retailers have embraced Bitcoin already to be at the coalface of payment innovation. An example is Petspyjamas. I know from speaking to the COO that it’s too early to know if it’s going to be a core competitive advantage but it’s interesting to see payment innovation.
Comments and questions
So what do you think is going to be front of mind in ecommerce in 2014? Where will teams focus budget and what is going to be driving website optimisation?
Please drop by and share your comments, questions and experience.