A publication by PricewaterhouseCoopers and TNS Retail Forward predicts that the retail industry in 2015 is likely to become even more complex, at an ever-increasing speed.1. Retailers, therefore, need to adjust and modify their existing models quickly. The “mass appeal” approach has already become a thing of past. We now live in an age where retailers, both online and physical stores, need to tailor their offerings to win over their target audience and foster greater customer loyalty.
Let’s take a look at the emerging trends of 2015 and what online retailers should arm themselves with in the battle for ecommerce business.
1. More Payment Options
Customers will look for more options in 2015, especially when it comes to payment. Around 64 percent of customers in a survey by Wiser they prefer multiple payment options. In fact, adding 3 to 4 payment options can increase conversion rates by 20%. Security reasons also contribute to this want for more payment options. Almost 28 percent of shoppers accepted that they won’t shop online using their credit cards because of security concerns.
There are over 230 alternative payment methods available currently ranging from e-wallets, prepaid cards, mobile payments, and real-time bank transfers to offline credit transfers.2 An online retailer would really benefit by offering customers their preferred payment options in addition to all major internationally used credit cards.
When selecting alternative payment methods for your site, it is crucial to choose one that guarantees payments with no chances of fraud or chargebacks, apart from delivering a higher average order value.
If you’re selling to a cross-border market, offer alternative payment methods that your customers use locally in their countries. This increases you chances of conversion and also helps you stand out from the competition. You could also look at options such as locally used debit cards, prepaid cards, gift vouchers, coupons, e-wallets, mobile payments, etc.
2. The Influence of Boomers and Gen Y
The baby boomers and millennials will heavily influence the retail sector in 2015 with their respective needs and preferences. Most boomers will hit the 60s and 70s in 2015. Retailers catering to these consumers need to adjust their business models to make shopping easier for them. This generation has great financial resources at their disposal.
Generation Y will also continue to influence the retail industry. In 2015, Gen Y will be reaching their household formation years. This generation is even more diverse in their shopping patterns, including where they shop and how they shop. They pose a challenge to traditional retailing. This demographic too has a lot of money to spend owing to increasing incomes and capital generation.
Retailers, therefore, need to respond to the dissimilar interests, tastes and customers of these two generations. While they need to emphasize customer service for boomers by providing in-store, “personal shopping” experiences, retailers need to be more tech-savvy to lure the media-saturated and brand-conscious Gen Y consumers.
3. Seamless Shipping & Delivery
Free shipping and timely arrival of shipments not only drive sales but also help you gain online retailer recommendations. Almost 81% of shoppers agree that free shipping is the one of the most preferred options at checkout. Over three-quarters of online buyers accepted that they add additional items to their shopping cart to qualify for free shipping.3 This suggests that online retailers can encourage upsells and cross-sells just by offering free shipping.
According to a study published by PwC, retailers can gain an additional 8% to 12% margin by offering free shipping. 4 The study also found that 2 out of 3 online shoppers in the U.S. are likely to cancel their purchase if the retailer fails to offer free shipping.
If you are unable to offer free shipping, try to include the shipping cost in your final product price to avoid adding shipping fees at checkout. This often helps in cutting down shopping cart abandonment. There are many other ways you can save on shipping costs while maintaining sales and profitability.5
Also, if possible, offer same day delivery. If you’re a retailer selling through services such as Google Shopping Express, you can provide customers in certain cities instant gratification with same day delivery.
4. Social Networks as Shopping Platforms
Social commerce is not an alien term anymore. Facebook and Twitter have both rolled out their individual ecommerce platforms; the integrations are more likely to deepen in 2015. The “buy” buttons of Facebook and Twitter followed by Like2Buy for Instagram will change how people shop in the social realm. Retailers like Nordstrom and Target are already using Like2Buy to boost mcommerce sales.6
Social commerce allows consumers to make a purchase without ever leaving the network, providing great sales opportunities for retailers to tap into without compromising on engagement quality. This also eliminates one age-old dilemma of all retailers – how to get customers to their websites. You don’t have to; instead, you take your products to their social channels, while they are happily browsing the latest trends, sharing photos or chatting with friends.
This approach is especially beneficial for short-term deals associated with fleeting trends. All you need to come up with is a time-sensitive offer and consumers are likely to be inclined to seal the deal.
5. Recommendations from Influencers
It is no longer enough to create a highly personalized shopping experience. Every interaction with your customers must be memorable, valuable and resonate with them. This is how you extend your reach to boldly go where only big budget ads can go. With content-focused marketing now being the norm, ask yourself two questions: Will anyone care about this? Will people share it?
You need to give people a reason to not only purchase your product, but also advocate it by sharing your content. Let me explain this with an example. I recently bought a suit from OwnOnly, a retailer of custom-tailored suits, blazers and accessories for men. OwnOnly aims to bring “Saville Row to the man on the street” by tying “customization” to “cost savings.” Like many high street tailors, they also run a referral rebate program. When a customer introduces a friend to the brand or website, they both receive a coupon marking down future purchases.
This tactic is by no means new, but when used for a product that needs customization and sells well through recommendation, it answers two essential questions:
- Does anyone care? Yes, because the product is being endorsed by a person they know and they’re getting a concession on premium goods or services.
- Will anyone share? Yes, because in the process, they’re helping someone get a good deal and saving some money themselves.
The Bottom Line
The retail industry is expected to go through lots of changes through 2015. This is all very exciting, although it poses certain challenges. For retailers, it is time to break old habits and embrace new business models and brand engagement methods. For long-term success, businesses need to deliver a unique selling experience to the customers. Innovation and personal appeal are the key phrases for this year.