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A Future Commerce Report on the State of Retail
The next phase of the growth of businesses will be based on their ability to plan for the changes coming over the next 10 years. Things to consider include: outsized customer expectations, online behemoths and marketplaces like Walmart and Amazon, Generation Z coming of age, aging of the Millennial population, and so much more.
When it comes to making investments and staying competitive, strategy and insight are everything. Vision 2020: The State of Retail reveals the top trends business leaders need to know to develop a winning strategy for the next decade.
This report will provide:
- U.S. consumer behavior data pulled directly from surveys we conducted
- Original research and insights from Future Commerce
- Ten predictions for the coming years of retail business growth
Here’s a look at some of the up-and-coming trends transforming digital commerce and practical findings backed by data to support rethinking the shopping experience.
How Can Ecommerce Retail Companies Compete with Amazon?
Everyone is competing with Amazon – even major giants like Walmart, eBay, Alibaba Group, Google, Microsoft and Apple are trying to find creative ways to win back market share.
Out of the people we surveyed, 91% of consumer households are Amazon Prime members. Unsurprisingly, the main benefits shoppers found valuable were free shipping (83%) and fast shipping (63%).
Your Brand is Your Differentiator
To compete with Amazon and other ecommerce retailers, companies are leveraging their brand as their differentiator. Additionally, other key strategies ecommerce retailers are using is prioritizing the user experience, putting people at the center of customer service, and doubling down on their niche market whether it’s air travel, gourmet chocolate or crafting.
Make Sure Your Ecommerce Site Provides These 5 Things
With websites competing for eyes and wallets, basic functionality is key. Not having something as simple as a clear “free returns” message could be the reason for so many abandoned carts. We asked consumers what was most important to them – everything from free shipping to payment options. The top five answers in our report are labeled as “Critical” to buyers.
No Algorithm? No problem.
Amazon has built their success on their ability to track what consumers search and purchase. This algorithm, in turn, can make recommendations to the right people, at the right time and place. This micro-personalization is what drives sales and has retailers scrambling to keep up.
Instead of competing with algorithms, companies are leveraging social media influencers. This major trend has turned YouTubers and Instagrammers into key drivers for sales. By partnering with influencers, brands are able to reach millions of viewers who trust and value what their favorite influencer is promoting.
Audience-first is a go-to-market strategy that allows influencers of various sizes to sell products, goods and services directly to their fans. This strategy works twofold – audiences want to feel like they’re part of a larger story and brands want to connect with their existing customer base to deepen their relationships.The power of this relationship has built makeup empires like Kylie Cosmetics and Glossier.
Brands Need to Know their Customers as Individuals
The Attention Economy is the belief that human attention is a scarce commodity. So if you can win over consumers’ attention, you can potentially win over their share of wallet. Customers want to feel known and valued. Wouldn’t it then be helpful to know what your customers care about and how they spend their time?
We asked these very questions and the results reveal people’s preferences. For example, 73% of responders said they would rather binge episodes of a show they’re watching than catch up on reading. While this may not seem like pertinent information, this sentiment highlights the interest in how Americans are consuming media and content. It also helps retailers strategize which channels of communication worth investing in to meet expectations.
Other Big Trends Entering into the 2020s
Death of Monoculture
With the takeover of algorithms, everyone’s online experience will be fundamentally unique. Long gone are the days of searching a site and seeing the same products as any other visitor. Now, people want a curated experience just for them. This is what Future Commerce describes as “death of monoculture”.
The proliferation of best-in-class tools and integrations is making it easier for retailers to compete in the DTC space. This allows small startups to manage and scale without having to invest in coding and costly website infrastructure.
We predict an increase in ecommerce retailers providing unique products and services that are offering the same type of shipping, delivery, return policies and customer support as the market leaders. This means the playing field is leveling in terms of dependencies on a large engineering team, opening up new opportunities for differentiation.
Sustainable and Local
GenZ is a totally different generation, and GenZers are interested in a very different world than Millenials. We are seeing that today’s newer consumers care about sustainability and the environment.
As we learned in 2019, sustainability is a lot more than just a buzzword; it’s the path forward for retail. Second-hand commerce is more sustainable, it allows for less waste, and resellers can capitalize on this. Brands that are leading the way are public-benefit corporations or B Corporations, which has become an important value for ethically-driven consumers.
DIY and Create Your Own Experience
There has been a resurgence in people learning to do things for themself. People are brewing their own beer, patching their clothes, and making their own art. People care about unique experiences rather than just collecting things. We live in a Minecraft world where people want to build out things for themselves and build experiences for themselves and use those experiences.
The Future is Radically Personal
At a micro-level, relationships between company and customer are crucial to consistent retention. Consumers are going to start having expectations that the products they purchase are going to improve their quality of life, and brands are going to have to meet that demand.
Check out the full Vision of 2020 Report – it has all of the info that you need to be able to indeed stay on top of the future of retail.The next phase of your retail or direct-to-consumer business will depend on many factors. Start exploring the ones that will impact your planning most.