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E-Commerce Trends: The Rise of
Omni-Channel Retail
Hamutal Schieber, Ruth Lewin-Chen | November 2017
Introduction: Omni-Channel Commerce
• “Don’t think of e-commerce as a channel. It’s a way for consumers to research, to buy, to experience
brands and then, ultimately, to have them have fulfilled”. These words, by Coca-Cola North America
EVP Sandy Douglas, manifest the implementation of e-commerce as a purchase enabler rather than
destination.
• E-commerce, therefore, is becoming a component of omni-channel commerce, as brick & mortar
competitors establish digital presence, and previously pure-play digital competitors establish a
physical presence. Online, mobile, physical – all integrate into a seamless shopping experience, with
channels blurring, and pureplay competitors entering brick and mortar through acquisitions – and vice
versa (e.g., Amazon’s acquisition of Whole Foods Market, and Walmart’s acquisition of Jet.com and
Bonobos).
• In addition, growth in methods such as auto replenishment, subscriptions and meal kits; smart home
device penetration; and new delivery and payment technologies, may boost e-commerce at a faster
rate despite recent slowdown.
eMarketer, Worldwide retail ecommerce sales: eMarketer’s updated estimates and forecast through 2015-2020
Market Trends Map
BestBetterGoodTrend / Strategy
Stylists at hand, omni-channel
service, curation + leveraging data,
samples with purchase
Personalized couponing,
chatbots
Recommendations based on
previous searches/ orders, Wish
Lists, loyalty schemes, social
log-in
Personal Touch
AR / VR / photo analysis for fitting,
social integration, try before you
buy
“real people” demonstrations,
creating communities, chatbots,
intelligent assistants
Ratings and reviews, videos,
guides, price comparisonsBetter Decisions
IoT and wearables, auto-
replenishment, click and collect,
smart devices, voice
omni-channel, Mobile
Commerce, social commerce
Bundling & item pairing, m-
commerce, product comparisonHyper Convenience
same-day delivery, 1-hour delivery,
“pre dawn” arrival
Click & collect, lockers, track
shipment, free shipping
2 day delivery, free shipping
over a specific sum, package
tracking
Delivery & Shipment
New business models (e.g., rent it,
sell it, swap it), surprise boxes, pop
up stores
Free trial / sampling, promotions/
cashback
Convenient cancellation & return
policies, omnichannel service,
chats
Call to Action
Source: Schieber Research, 2016 - 2017
Online Retail Share of Total Retail
• Global retail e-commerce sales, including products and services
(barring travel, restaurant and event ticket sales) ordered via the
internet over any device, reached $1.9 trillion in 2016,
accounting for 8.7% of total retail spending worldwide
(source: eMarketer).
• According to eMarketer, e-commerce sales growth worldwide
has slowed from 27% in 2014, to 24% in 2017, and eMarketer
predicts that this trend will continue, reaching 16% growth in
2021. Schieber Research believes, however, that due to the gap
between low penetration rate and high potential of e-commerce,
as well as the influx of new (enabling) technology for ordering,
delivery and payment, growth will accelerate. 1,336
1,548
1,859
2,290
2,774
3,305
3,879
4,479
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
SA
LE
S IN
BIL
LIO
N U
.S. D
OL
LA
RS
Retail e-commerce sales worldwide
2014 - 2021 (in USD Bn)
Online Retail Share of Total Retail
• Brick & mortar competitors enter the e-commerce
world by acquiring companies that are digitally
savvy, and have the data and experience that can
leverage a company’s physical business, by
investing in them, or by investing in own platforms.
Recent examples include:
– PetSmart’s huge acquisition of Chewy.com for
$3.35bn
– Walmart’s acquisitions of Jet.com for $3.3bn,
Bonobos for $315mn, Shoebuy for $70mn, and
delivery company Parcel and fashion retailer
Modcloth for an undisclosed amount (lower
than the above acquisitions)
– Unilever's acquisition of Dollar Shave Club for
$1bn
– Wal-Mart ‘Store No. 8’ tech incubator in Silicon
Valley
Biggest e-commerce deals of all time
Target (acquirer, year)
Source: Recode, April 2017
Digital Commerce: Penetration Rates
• For some product categories, such as furniture, or homeware and household appliances, consumers prefer to go to a store to see and try the products.
• For this reason, more retailers are adopting a “showroom” model: a store which constitutes a hub for trial and consultancy, with mobile payment and direct to home delivery.
• Nielsen reports that, globally, 58% of respondents in a 2016 survey said that they have made a purchase online in the fashion category, and just 21% reported making a purchase in fresh grocery. Indeed, according to data from PwC, the grand majority of consumers still prefer to shop for groceries in brick and mortar stores, but with the influx of food and beverage direct to consumer offerings, including the expansion of Amazon Fresh and Jet.com in the US, and rise in meal kit penetration, Schieber Research believes online grocery will grow significantly.
58%
55%
50%
43%
41%
40%
29%
27%
38%
27%
24%
23%
23%
21%
18%
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%
Fashion-related products
Travel products or services
Books/music/stationery
IT & mobile
Event tickets
Consumer electronics
Furniture, decor, tools
Video game-related products
Beauty & personal care
Restaurant & meal kits
Packaged grocery food
Medicine or health care
Household cleaning
Fresh groceries
Flowers, gift sets
Source: Nielsen, Worldwide; October 31 to November 18, 2016; total survey n = 30,000
Share of internet users who have ever purchased products
online as of November 2016, by category
Online Retail Share of Total Retail
• eMarketer expects retail e-commerce sales
to increase to $4.058 trillion in 2020,
making up 14.6% of total retail spending
that year.
eMarketer, Worldwide retail ecommerce sales: eMarketer’s updated estimates and forecast through 2015-2020
7.4%
8.7%
10.1%
11.6%
13.1%
14.6%15.5%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
2015 2016 2017* 2018* 2019* 2020* 2021*
Share
of
e-r
eta
il sale
s
E-commerce share of total global retail sales from
2015 to 2021
58.3% 60.2% 61.6% 63% 64.6% 65.2%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
2016 2017 2018* 2019* 2020* 2021*S
ha
re o
f in
tern
et
us
ers
Digital buyer penetration worldwide 2016-2021
In 2017, 60.2% of global internet users had
purchased products online (1.66 billion internet
users), and this figure is expected to reach 64.6%
in 2020 (over 2 billion). Growth potential is huge,
due to this increase in penetration – as well as
through increasing frequency and basket size of
existing shoppers.
E-Commerce by Market
• The Asia Pacific region registered the highest
penetration rate of e-commerce sales, with
12.1% in 2016.
• In fact, China has been the growth engine of
global e-commerce, with sales of $ 975 billion in
2016 according to Euromonitor, and surpassing
$ 1 trillion in 2017 according to eMarketer.
12.1%
8.3%
8.1%
3.4%
1.9%
1.8%
0.0% 2.0% 4.0% 6.0% 8.0%10.0%12.0%14.0%
Asia Pacific
Western Europe
North America
Central & Eastern Europe
Latin America
Middle East & Africa
Share of total retail sales
Source: eMarketer
975
648.6
192.5
124.4
79.1
74.1
71.3
43.5
44.7
24
766.5
595.1
174.2
114.4
71.9
66.2
64.8
35.7
25.5
22.8
0 200 400 600 800 1000 1200
China
United States
United Kingdom
Japan
France
Germany
South Korea
Canada
India
Russia
Market size in billion U.S. dollars
Mark
et
2016* 2015
Worldwide largest B2C e-commerce markets in 2015-2016
Source: Euromonitor
China: The World’s E-Commerce Growth Engine
• Centralization is one of the contributing factors for China’s e-
commerce boom: whereas in the US leading retailers operate
independently through their own websites, China’s Alibaba is
responsible for over 75% of e-commerce transactions, with
websites including tmall.com, Taobao, and Alibaba.com.
• Alibaba is an extremely innovative competitor, fine-tuning all
elements in the consumer’s journey, including the store fronts
(in collaboration with brands and through social media), the
shopping process (including VR), delivery and payment
technology (mobile apps).
• The single-login element of China’s e-commerce is something
we also see in the US – through Facebook, rather than
Amazon. Combined with Facebook’s “store front” position, and
the strides it is taking on the content-commerce front with
Instagram, the company’s e-commerce future seems bright.
China’s Mobile Commerce
• Another interesting fact is that
over 50% of China’s digital
commerce stems from mobile
commerce, with chat apps such
as WeChat driving this trend.
China, like many other
developing markets, went straight
from brick and mortar to mobile –
many shoppers have never made
a purchase using desktop. We
might speculate that younger
generations in America and
Europe will go through the same
process.
Mobile wallet usage reach among mobile shoppers worldwide as of
August 2016, by country
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0%
China
Norway
UK
Japan
Australia
Colombia
Country average
United States
Singapore
Canada
Austria
France
Ireland
Brazil
New Zealand
SHARE OF RESPONDENTS
Source: IAB
Device Trends in E-Commerce
• Mobile is becoming more dominant in e-commerce
shopping, as eMarketer expects 48.5% of e-commerce
sales to stem from mobile commerce in 2020.
• At the same time, artificial intelligence is becoming the
growth engine for mobile commerce, with smart assistants,
chatbots and smart appliances all changing how people buy
digitally, converging mobile and social commerce.
U.S. mobile retail commerce sales as
percentage of retail e-commerce sales from
2015 to 2020
23.6%
29.1%
34%
39%
44%
48.5%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
2015 2016* 2017* 2018* 2019* 2020*
SH
AR
E O
F E
-CO
MM
ER
CE
SA
LE
S
Source: eMarketer
• According to reports, Amazon is planning to
launch its own Alexa-integrated messaging
app, called “Anytime”, that will let users text,
call, video chat, play games and send photos
across a range of platforms including
iPhone, Android and PC. Anytime will link
with other key Amazon offerings including
music, food delivery, shopping and
interacting with businesses.
Device Trends: Connected Devices
• Connected devices,
including wearables, smart
appliances and smart
homes are expected to
experience growth by 2021.
• This affects how people buy
everyday items, especially,
since it creates a limited
choice of retailers that are
integrated with the device.
Number of connected things/devices worldwide by vertical from 2015 to
2021 (in millions)*
*Berg Insight, Worldwide; 2015 ** including appliances
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
2015 2016 2017 2018 2019 2020 2021
Other
Healthcare
Wearables
Smart homes
Smart buildings
Smart cities
Automotive
POS/Vendong/ATM
Consumer electronics**
Utilities
Mobile Commerce
• The growth in M-Commerce stems from
technological advancements in mobile
image recognition (MIR), augmented reality
and NFC-enabled payments – as well as
the growth in mobile penetration, usage,
and types of use (including accessing social
networks and video content through mobile
devices).
Mobile popular mobile purchase channels of mobile
shoppers worldwide as of August 2016
49%
32% 31%
25%22%
17%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
A retailer'swebsite or
app
An auctionwebsite or
app
A brandspecific
website orapp
Anaggregatorwebsite or
app
A socialmedia
website orapp
Amessaging
app
SH
AR
E O
F R
ES
PO
ND
EN
TS
IAB, Worldwide; July 22 to August 17, 2016; 18 years and older; 3,800
Respondents; mobile users who have purchased a product or service on
mobile in the past 6 months
• Convenience is the number one reason for
purchasing through mobile, on all regions but
South America where the number one reason is
“to save time”.
55%
45%
33%
25%
23%
21%
18%
12%
10%
39%
50%
35%
25%
22%
17%
23%
8%
12%
48%
44%
32%
24%
28%
22%
15%
11%
11%
52%
44%
35%
29%
23%
20%
16%
11%
10%
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%
It was convenient
To save time
To get the best price possible/to save money
Couldn't find it in store
To get something immediately/didn't want to wait
For entertainment
It's safer than carrying cash
It's the only way for me to purchase items online
Advertising prompted me
Share of respondents
Asia Pacific South America North America Europe
Reasons for mobile shoppers to purchase products via
smartphone or tablet as of August 2016, by region
Social Commerce
• Social media is an important
vehicle for driving awareness and
consideration along the path to
purchase, less so a sales
channel.
• “Buy now” buttons on Facebook
are in decline, but at the same
time, social media is a major
purchase driver for shoppers.
• ,Facebook announced that users
will be able to order from
restaurants right on Facebook,
thus mo
Primary attitude toward shopping via social media sites or buy buttons
according to internet users in the United States as of April 2016
7.3%
2.6%
18.7%
45%
26.4%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
Used it beforeand plan to use
it again
Used it beforeand won't beusing it again
Open to it buthaven't used it
yet
Would not use it Never heard of it
SH
AR
E O
F R
ES
PO
ND
EN
TS
eMarketer; Sumo Heavy. United States; April 2016; 18 years and older; 1,029 Respondents
Social Commerce: Platforms
Social media platforms used to shop for
products among social media users in the
United States as of May 2016
55%
12% 12%9%
5%3%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
SH
AR
E O
F U
SE
RS
OF
EA
CH
P
LA
TF
OR
M
eMarketer; Cowen Group, United States; May 2016; 18 years and older
Content and commerce are becoming interlaced,
presenting a renewed opportunity for social commerce.
In the USA, this is evident from the huge part Pinterest
plays in online shopping.
Alibaba’s Taobao as a social commerce platform: a
hub based on data, mobile, content, personalization
and a loyalty program.
Chatbots: Growing Social/Mobile Commerce
• A recent enabler for social media shopping is Chatbots. Chatbots are automated dialog
systems which trigger dialog with customers within a messaging app or intelligent personal
assistants (IPA) that use voice recognition, such as smart home devices (Amazon’s Alexa,
Google Home etc.).
• This artificial intelligence (AI) technology has been increasingly available via instant
messaging apps such as Facebook Messenger, WhatsApp etc., and is especially popular
among younger shoppers.
• Voice is trending: Digital assistants and voice search are becoming more prevalent. Thanks
to digital assistants such as Amazon’s Alexa and Google Home, people can already book
trips, order pizzas, order groceries and compare prices, without encountering a screen. The
implication is that brands need to be able to offer quick purchase options, including purchase
history. They should also take into account the nature of search queries – which are how
people naturally speak, usually in the form of a question.
Chatbots: Consumer Attitudes
• The number of Chatbots available on Facebook
Messenger grew X3 within six months: from 11,000 in
June, 2016, to 34,000 in November, 2016.
• According to Statista, more chatbots are currently in
development for messaging apps (e.g., Messenger
and the rising star Slack), than for virtual assistants;
and indeed, consumers prefer messenger over virtual
assistants when it comes to chatbots
34%
27% 25%20% 20%
15% 15%10%
0.0%5.0%
10.0%15.0%20.0%25.0%30.0%35.0%40.0%
SH
AR
E O
F
RE
SP
ON
DE
NT
S
• 34% of respondents stated they would be
comfortable receiving customer service from
artificial intelligence in online retail,
compared to 20% in banking, 15% in
insurance and 10% in government; which
means that for complex decisions and
information, shoppers are interested in
speaking to an actual human.
Pega, Worldwide; 2017; 18 years and older; 6000 Respondents
Acceptance of artificial intelligence chatbots by customers
worldwide, as of 2017, by service
Chatbots
• Levi’s, one of our “best in class” companies of previous reports, recently launched an online feature available through Facebook Messenger – a ‘Virtual Stylist,’ which “takes all the wisdom of our in-store style experts and puts it at consumers’ fingertips 24 hours a day.”
• The chatbot is powered by mode.ai and personalized fit data from True Fit (another best-in-class company, reviewed in another report).
Beyond Messenger, apps such as Kik and Slack are
offering brand chatbots. On Kik, Sephora provides
users with make-up tips and reviews, channeling
them to Sephora to make a purchase. The company
sums up its experience with the US teen oriented
app, here.
Driving Conversion: Online Reviews
• When researching about a certain product, 55% of shoppers search online for reviews and recommendations; 47% visit the company website; 26% visit physical stores to see or try the products; and 23% spoke with their friends of family about it.
• The factors which drive final product decisions are: Price or promotions (27% of respondents); features (23%); brand reputation (22%).
• However, the factors vary by category, whereas brand reputation is more important for fashion, food and luxury items while product features was more important for electronics.
Most popular purchase influences according to Amazon buyers in
the United States as of November 2016
49%
16%
11%
10%
7%
7%
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%
Product reviews
Word of mouth
Online ads
Social media
Gift guides
Other
SHARE OF RESPONDENTS
Radial; Various sources (Finn Partners)
Source: KPMG, 2017
Driving Conversion: Retailer Preferences
• In online shopping, encouraging shoppers to purchase a product, does not ensure they’ll buy it from the same source.
• After deciding to purchase a certain product, price is the most common consideration when consumers are deciding where to buy it.
• Amazon’s foot-in-the-door approach with Alexa (the Amazon Echo devices, as well as the AI technology integration) helps the company turn more shoppers into Amazon customers. No wonder, then, that Amazon offered Echo devices under a major discount on its latest Prime Day.
• Amazon's Prime program is expected to reach more than 50% of American homes in 2017, according to Cowen and Co..
Pricing Tactics
• Loyalty programs, auto replenishment and subscriptions, are all tactics that take care of 2 important factors in e-commerce: time-saving/ convenience, and best price. Offering vouchers, cash back, and “subscribe and save” are widespread instruments for e-tailers today.
• Coupon aggregators are also popular.
• Cash back is a powerful loyalty/ payments tool, used by many retailers and payment companies. It provides a discount, or a voucher, for the purchase.
• Buying in bulk and bundling (a tactic most used by e-tailer Boxed.com) also provide a way to lower prices.
• Jet.com is committed to lower prices, and offers a “price drop as you shop” tactic, where the customer benefits from operational synergies for products that have been co-purchased.
Pricing Tactics
• Ulta, the beauty retailer, is implementing
pricing-based marketing tactics that move
the shoppers to action, creating a sense of
excitement and opportunity.
• The company’s online sales climbed 71%
in q1 2017 and are expected to register
+50% growth for 2017.
Delivery
• Delivery is the number 1 driver – and barrier –
for e-tailers. Free delivery is very important to
shoppers, and 63% of respondents in a q4,
2016 GlobalWebIndex survey said that the main
reason for shopping on Amazon is – free
delivery.
• Delivery is a major challenge for e-commerce,
and the costliest for e-tailers. As shoppers
expect free, quick, and limited-slot deliveries,
retailers turn to creative solutions to solve the
“last mile” problem - the portion between a
store / distribution center and the customer's
home. This is the costliest part of the delivery
element in the purchase, and as a result, many
start ups and retailers opt to solve the problem.
9%
3%
6%
20%
20%
42%
0.0% 10.0% 20.0% 30.0% 40.0% 50.0%
Ship to store or pick-up in store
Same day from time of purchaseto delivery
Next day - 1 day from time ofpurchase to delivery
2-day - 2 days from time ofpurchase to delivery
Ground - 3-5 days from time ofpurchase to delivery
Economy ground - 5-7 days fromtime of purchase to delivery
SHARE OF RESPONDENTS
Most frequently utilized delivery options for digital
purchases according to online shoppers in the United
States as of February 2016
Source: Statista - UPS; eMarketer. United States;
January 30 and February 9, 2016; U.S. n = 5,330; Digital
buyers
“The Last Mile”
• Autonomous cars, drones (piloted by Amazon), “click and collect” (buy digitally, collect from a store or
locker), ride sharing such as Uber and Lyft, and alternative parcel companies, are all tactics used by
retailers and brands to try and offer cost-efficient solutions for delivery.
– In the US, Amazon has been the first to offer a 2-day delivery option for many items, with no
additional charge to Prime members. Today, the company offers “Prime Now”, a 1-hour delivery
service from local retailers and restaurants, in almost 30 cities in the US.
– In June 2017, Walmart began testing home delivery of some orders by Walmart associates
heading home for the day in their own cars, offering them extra pay and the ability to opt in our out
at will. Following Walmart’s $3bn acquisition of Jet.com, Walmart lowered its minimum threshold for
free two-day delivery to $35, leading Amazon to lower its own minimum. Walmart is currently
testing a Jet.com one-hour delivery, offers “click and collect” options, and acquired Parcel, a “last
mile” technology company in New York City.
– In the UK, Tesco launched same-day delivery across most of the UK: Customers who order online
by 1pm will be able to receive their groceries some time after 7pm on the same day. “Click and
collect” is popular in Europe.
Dealing with the Try-On Barrier
• Feeling and trying on the merchandise is
a barrier to growth for e-commerce, and
we have covered technological and non-
technological attempts to resolve the
issue in previous reports, including
receiving several sizes/ designs (e.g.,
“Rent the Runway”, Warby Parker),
waiting for the customer to try on and
decided, digital measuring, VR and plain
old easy returns.
• More retailers today use stores as display
spaces that support the need to try out
and try on prior to purchasing online.
Warby Parker
Bonobos: a “tailor made” ecommerce solution, acquired by Walmart for $310mn
Driving Convergence: Personalization
• Personalization continues to be one of digital
commerce’s main strengths relative to brick & mortar.
• The availability of data from various sources on the
shopper, including due to single-login (e.g., forming
an account through Facebook), and using past
browsing and purchases, creates a more engaging,
convenient experience to consumers. Failure to offer
a personalized experience will render a website
irrelevant to the shopper. Furthermore, a huge
opportunity exists in defining unique shopping
parameters to help drive conversion rates up.
• However, despite buzz regarding personalization, it
seems that in 2017, e-tailers were more busy trying
out chatbots, than investing in personalization.
• Sampling, based on consumer preference, is a
powerful tactic used by Boxed.com, L’oreal, and
others.
• Alibaba: using data to offer relevant
offers and “anticipate needs”
StitchFix: “change the way people find clothes they love by
combining technology with the personal touch of seasoned
style experts. “
Driving Convergence: Personalization
• L’oreal uses a mobile app
to let consumers “try”, and
perhaps purchase,
different looks.
• L’oreal’s successful digital
initiatives made e-
commerce its “number 4
market”, according to the
company’s CAGNY 2017
presentation.
Personal Touch: Trial and “Curation”
• Subscription boxes are on the rise, as they reduce stress by creating ongoing replenishment, as
well as the indulgent “surprise” element.
• Beyond meal kits and “subscribe and save” options, boxes are offered in many industries, including
fashion and beauty.
52%
35%
6%4%
1% 1%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
Discoveringnew
products
Receivinghigh-qualityproducts for
a goodprice
No need togo
shoppinganymore
I don`tknow
Other I can`timagine
subscribingto a beauty
box
SH
AR
E O
F R
ES
PO
ND
EN
TS
Most common reasons women in the United States would be
interested in subscribing to a beauty box as of May 2017
Statista, United States; May 16 to 18, 2017; 18 years and older; 616 Respondents; who subscribed to a beauty box, used to
subscribe to a beauty box or are interested in doing so
Hitwise; MediaPost, United States; January 2013 and 2016
Monthly visits to subscription box sites
in the United States in January 2013 and
2016 (in millions)
0.72
21.4
0
5
10
15
20
25
Jan '13 Jan '16
MO
NT
HLY
VIS
ITS
IN
M
ILL
ION
S
Personal Touch: Trial and “Curation”
• In June 2017, Amazon begun testing a new subscription service called Prime
Wardrobe that lets customers try on clothes before they buy them and return
them for free.
• Amazon's Prime Wardrobe will be available to Prime members at no extra
charge and gives customers one week to decide whether they like what they
ordered. They pay only for what they choose to keep, a service similar to
those offered by Trunk Club (owned by Nordstrom) and Stitch Fix.
• Amazon also introduced “Echo Look”: Using
just your voice, easily take full-length photos
and short videos with a hands-free camera
that includes built-in LED lighting, depth-
sensing camera, and computer vision-based
background blur; See yourself from every
angle with the companion app. Build a
personal lookbook and share your photos.
• Get a second opinion on which outfit looks
best with Style Check, a new service that
combines machine learning algorithms with
advice from fashion specialists
Personal Touch: Trial and “Curation”
MM.Lalfleur’s “Bento” concept for a personal fashion
stylist in a box
Meal delivery:
Plated, Chef’d are
just 2 of the
competitors in this
arena
Birchbox: a leader
in beauty product
subscription
Abandonment Issues
• E-tailers deal with high rates of cart
abandonment, usually by retargeting through
social media and content websites, as well as
through e-mail marketing.
Online shopping cart abandonment rate in
selected industries as of 4th quarter 2016
SaleCycle, Worldwide; 4th quarter 2016; 500 global brands
67.4%71.2%
74.1%76.8%
81.6% 82.1%84.4%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
AB
AN
DO
NM
EN
T R
AT
E
Payments
VR Checkout Innovation
• Swarovski has teamed up with Mastercard to launch a virtual reality
shopping app for the brand's line of crystal home accessories,
Atelier Swarovski. The app is designed to immerse consumers in a
beautifully decorated home setting where they can virtually browse
and purchase crystal artwork using Masterpass, Mastercard’s digital
payment service, without ever leaving the VR experience.
• Swarovski plans to have VR headsets at certain retail locations as
well as different events.
• In June 2017, Amazon has launched the Amazon
Prime Reload program, offering Prime members
a 2% cash back on purchases, even if they don’t
use an Amazon cash back credit card, by
reloading the gift card balance.
Opportunities, Barriers & Retailers Strategies
Marketer StrategiesOpportunity / Barrier
• Mobile commerce and social commerce
• QR-Codes and Virtual Stores enable shoppers to shop on the go
• Pure-play online retailers have been opening physical stores
• Leveraging showrooming – retailers trim stores for in store digital
purchase
• While online retailing assures hyper
convenience, consumers seek
anytime/anywhere experiences where
online-only may not suffice.
Pure-Play /
Omnichannel
• Consumer reviews and recommendations provide assurance, as
well as “real life” people demonstrations and influencer reviews
• New tactics such as trials and rentals are taking advantage of the
digital platform, surpassing physical retailers
• Consumers prefer to touch the products
and try them before they buy them. This
is a main barrier to online-only retailing.
Product
Experience
• Chatbots and multi-channel assistance (via phone as well as web
and video)
• To replace store representatives, advisors and stylists are made
available, as well as bundling completing products
• Using VR and AR for demonstration
• A flesh and blood person may answer
shoppers’ questions more easily, thus
eliminating frustration and leading to a
bigger sale.
Live Assistance
Source: Schieber Research, 2016-2017
Opportunities, Barriers & Retailers Strategies
Marketer StrategiesOpportunity / Barrier
• Utilizing virtual wallets, mobile payments, bank transfers
• new payment technologies are becoming more established
• Consumers in many countries do not own a
credit card / are reluctant to provide card
details
Payments
• Communicating the security technology / level to the shopper
• Utilizing social identities to tailor personal offers and enjoy word of
mouth
• Emphasizing trial, flexible return policies
• Consumers do not trust information and
payment data sharing
• However, younger consumers do share vast
amounts of information with friends and
brands to enjoy personal offers
Trust
• Utilizing virtual wallets, mobile payments, bank transfers
• new payment technologies are becoming more established
• Consumers in many countries do not own a
credit card
• Reluctance to provide card details
Payments
Source: Schieber Research, 2016 - 2017
In Conclusion…
• Offering a great price (using tactics such as subscribe & save / coupons / cashback / loyalty); displaying customer reviews; and free / fast delivery options (including: 1-hour/ next day; “click and collect”) are a “must have” for e-tail success.
• Understanding mobile & social commerce, integrating bots and AI into both, and personalizing offers are “good to have” and can create a competitive advantage (increasingly, they will become a “must have”).
• Combining additional devices and formats (intelligent assistants; voice; video and content commerce) are trending, and will gain importance as customers adopt these technologies for commerce.
• But above all, remember that the customer’s journey is not comprised of channels; rather, customers are looking for a seamless shopping experience, trying something in-store and purchasing online, using AR/VR to learn about a product and picking it up in-store, etc.
Thank You!
The research was conducted by: Ruth Lewin Chen, Hamutal Schieber
Schieber Research | Market Research & Competitive Intelligence
www.researchci.com | [email protected]
More articles and researches on Carmelon Digital
Marketing website:
http://www.carmelon-digital.com