Retail Experiences set to drive Customer Loyalty
As continued growth in mobile commerce continued to fuel overall spend online, e-commerce sales are estimated to have risen by 20.1% in 2014 exceeding US$1.5 trillion for the first time globally, according to research by Rakuten, which also found that the retail customer experience has become a critical factor in customer loyalty.
With the rate of growth globally set to slow slightly in 2015, as the market matures, retailers are expected to see e-commerce sales rise by 17.7% to US$1.77 trillion, and 12.2% in the UK. As savvy retailers broaden their horizons to continue driving growth, next year will provide rich pickings for retailers that make the right moves and embrace cross-border commerce.
Consequently, Rakuten.co.uk's managing director Mike Bishop, has put forward several key predictions for how the global retail industry is likely to develop over the coming year:
- Retail experience to drive consumer loyalty The once separate worlds of retail and entertainment have firmly collided. Consumers today want to buy into a brand experience which reflects their tastes, on and offline. To provide this experience retailers have diversified their offering, but this has often been in a siloed way with services existing separately. As we enter 2015, retailers are bringing these distinct offerings together under one branded roof, online and on the high street. Not only will this empower retailers to deliver a better connected experience to consumers, but it will also unleash an enormous opportunity to cross-sell and strengthen consumer loyalty across the entire retail and entertainment ecosystem.
- Make-or-break time for crypto-currencies Payments have been a hotbed for retail innovation globally in 2014 and we can expect to see much more of this next year, however the biggest shift is likely to come in the consolidation of the plethora of payment methods now available to consumers. 2015 will be a make-or-break year for crypto-currencies, like Bitcoin, which have yet to make their presence felt in terms of transaction volume. It will be the year in which we find out whether these currencies will survive, fulfilling the promise of a global currency, or fade away as legislation and security concerns limit consumer uptake. If crypto-currencies take off and gain widespread usage and acceptance, we will see substantial impact on international transactions - a massive step toward a truly global marketplace.
- M-commerce continues to gather pace As more consumers make the shift from desktop-based shopping to discovering products and making purchases via mobile devices, retailers can no longer afford to ignore changing consumer behaviour. In 2014 it is estimated that 54% of consumers were browsing for items on their smartphone, with 35% using the same device to make the final purchase. As this trend gathers pace, we expect to see more retailers invest in mobile retail environments and marketing next year in a bid to capitalise on this fast-growing segment. This will in turn drive greater adoption of omnichannel commerce, as retailers seek to deliver a seamless experience across multiple channels.
- Cross-border commerce to unleash a world of opportunity for retailers The growth of cross-border commerce looks set to accelerate in 2015 as the first truly global marketplaces launch, giving consumers the chance to buy from retailers anywhere in the world. This paves the way for merchants to access markets in other countries and expand their reach internationally. For retailers, entry into new markets through a global platform offers the opportunity for significant growth, particularly in smaller markets where there is less potential to grow internally.
- Social shopping is entertainment Social media is playing an increasingly pivotal role in the shopping journey, influencing both product discovery and purchase decisions. In the US, it is estimated that social shopping drove more than US$2.69 billion in sales in 2014. Already, Twitter and Facebook have introduced 'buy it now' buttons and in 2015, retailers will place greater emphasis on selling products via these channels. However, with image sharing sites like Pinterest and Instagram seeing faster growth in member size and active use than many social sites, most innovation in 2015 is likely to be image-led. With consumers discovering things to buy as they share images and curate collections of things they like, retailers are offered a huge opportunity to make shopping a more entertaining and engaging experience.