FUTURE OF ECOMMERCE: HOW MID-SIZE RETAILERS MAY CHANGE BY 2022
Now that emerging technology like virtual reality, beacons, and voice assistants are finding their way into more consumer homes, what role will these play in the future of ecommerce? Not only is hardware improving and creating new ways for consumers to buy goods, the software such as artificial intelligence, is improving how products directly correlate with needs and wants.
Over the next five years, mid-size retailers such as L.L. Bean, Hasbro, and Wayfair will see large impacts and face the most challenges. While we may not have a crystal ball, industry experts, like Greg Zakowicz, have a direct tap into the changing landscape of retail, so we asked them how they see mid-size retail and ecommerce shifting over the next five years. From emerging technology to shifts in how consumers receive their goods, there are a lot of iterative changes that our industry is likely to see.
HOW WILL MID-SIZE RETAILERS CHANGE OVER THE NEXT 5 YEARS?
Greg: I don’t expect we’ll see drastic changes from many of them. I think retailers will do more behind the scenes to integrate data sources and sharing. We might see retailers put more emphasis on improving the overall value they provide to customers, by providing more personalization and value-driven loyalty programs, for example. Of course, much of this requires accurate, integrated data. Without that, marketing programs likely will fall short of expectations.
WHICH IF ANY EMERGING TECH WILL BECOME WIDELY ADOPTED WITHIN THE NEXT 5 YEARS?
Greg: In some cases, yes. In most cases, no. I believe virtual reality will be more prominent but I don’t think people will be wearing headsets to do the majority of their shopping. For brick-and-mortar stores, beacons will probably become more mainstream than they are today, but it will take some time for retailers to figure out how to use them to provide value to their shoppers. They need to make sure they get it right – almost from the start. Otherwise, consumers won’t adopt them readily over time. Again, it’s all about value for the consumer.
Some online retailers will likely rely on some technologies more than others. Looking at ways furniture retailers can help people picture items in their house is a great example. How much more can this be improved than what we see today? Who knows. Does it need to be improved drastically? I am not sure it does.
Voice assistants are an intriguing topic, because that technology puts us at the front end of “browserless commerce.” No one really knows what the user’s experience will be. Will we be able to shop using voice commands? Already, we can purchase items on Amazon using our voices. But will our daughters use it to purchase a prom dress? I don’t think so. I don’t think anyone can predict this, but the run-of-the-mill ecommerce retailer will not be using it on a day-to-day basis the way Amazon users do now.
As with any technology, simply implementing it does not improve the shopping experience. If the technology makes the experience better then it will be adopted. If the experience is about the technology, ultimately, it will fail.
HOW WILL SHIPPING CHANGE IN THE NEXT 5 YEARS?
Greg: Wow, great question. U.S. consumers already expect free shipping, and their tolerance for longer shipping windows, even with free shipping, is lessening. We will likely end up in a place where free shipping in 3 or less days is expected. There will always be exceptions for custom products. However, I would not be surprised to see a slow revolt against the “big guys” where consumers purposely choose to wait the extra day, or pay a little more so they can buy from a smaller retailer. People love the underdog, and when mass consolidation happens, many times consumers have pivoted in the opposite direction.
This is all predicated on domestic purchasing. As more consumers participate in the global marketplace, they might be willing to wait a little longer for their product to be delivered. This could help train people that immediate shipping is not needed, and their tolerance for slightly longer shipping windows or cost could be expanded.
For brick-and-mortar retailers, I think we will see a bigger push to drive people in-store. These retailers may stick to a shipping charge or longer shipping windows for at-home delivery, while quicker and free delivery will happen for in-store pickup. This would provide consumers the option to receive fast and free shipping, while providing retailers what they want – in-store traffic.