The world of online retail is progressing rapidly due to two important factors: the advancement of technology and the evolution of consumer expectations. In 2014, we saw the growth of social and mobile commerce, the rise of mobile payment options like Apple Pay, and the increase of preferred (and often expected) shipping options such as free shipping and returns.
So what should we expect in 2015 and beyond?
WalkerSands Communication recently shared the results from its annual Future of Retail Study 2015, which highlights growing trends in ecommerce. Here are some interesting findings from their study:
- Consumers are shopping online more often (and spending more too). The study revealed that 68 percent of U.S. 100 dollar cash advance online consumers shop online at least once per month. Online shoppers are also buying more expensive items online, with 76 percent saying they would spend more than $100 on a product before seeing it first. In addition, 27 percent are willing to buy an item costing more than $1,000 without first checking to see if free return shipping is available.
- Amazon is still the number one go-to online shopping destination. Amazon’s popularity is evident with 96 percent of consumers saying that they’ve purchased from the website in the past year. Consumers prefer Amazon because of its wide range of products and generally feel more comfortable purchasing from third-party websites than from traditional retailers like Best Buy, Home Depot, etc.
- Online shoppers are hesitant to purchase groceries and food online. Amazon doesn’t win them all though – 36 percent of online shoppers say they would never buy groceries or food from the retail giant or any other third-party website. (Side note: I personally don’t fall under that 36 percent and recently bought some chocolate chips and olive oil from Amazon. These items are heavy and would normally have high shipping costs, but with Amazon Prime, I don’t have those concerns.)
- Free return shipping surpasses same-day shipping in shoppers’ purchase decision-making. While free shipping is still the dominant reason why shoppers say they will purchase online, free return shipping comes in second, surpassing the convenience of same-day shipping. This may be because free returns makes the online shopping experience more convenient.
- Eight out of ten consumers are hesitant to use mobile payment services like Apple Pay. As you can see from the chart below, the biggest concern for consumers in using mobile payment services is the security (57 percent) followed closely by privacy concerns (48 percent).
- Consumers see drones as the next rapid delivery option. While drone delivery is probably still far from reality, two out of five consumers (66 percent) believe they will receive their first drone-delivered package in the next five years. In addition, almost 80 percent of survey takers said they would pay for drone delivery, with 32 percent saying they would pay more than $20.
I’m a big fan of drones and have several small ones that I use leisurely (and crash regularly). My personal view on how drones should be utilized? Large trucks could be deployed with an on-board drone fleet and packages could be delivered to one or two areas. The truck would park in one area and the drones would be sent out to deliver packages in that specific location. Then, they would return to the truck and nestle into charging bays. The truck would then drive to the next location, which would be optimized based on the next set of deliveries.
In this way, the drones never have to fly too far and can be recharged as they move from one node to another.
- 63 percent of consumers expect virtual reality to become part of their online shopping experience in the future. Not only is virtual reality expected, but more than a third of consumers say they would shop more if they were able to try on a product virtually.
While it’s uncertain when drone delivery and virtual reality will become the norm in ecommerce, there are a number of things online businesses can do now to meet consumers’ online shopping expectations. For instance, you can offer free shipping and discounted returns if it fits within your business’s budget. You can also provide shoppers with a variety of payments methods (i.e. accepting mobile wallets like Apple Pay). Lastly, keep an eye on emerging technology and start to imagine whether they might fit within your business strategy.