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June 15, 2015

e-Commerce 2015: Where Are We Now?

e-Commerce is a growing sector. The latest data from the U.S. Census Bureau shows e-commerce shipments were worth $3.3 trillion in 2013, up 11.1% from 2012. The same report shows those e-commerce shipments accounted for 57% of all manufacturing shipments that year, up from 52.4% the year before. For online retailers to keep up with the changing pace of the industry landscape, it’s important to stay on top of emerging trends for 2015 and beyond.  

e-Commerce Goes Mobile

According to mobile e-commerce statistics from Outerbox, 25 million U.S. consumers own smartphones, and 50 million own tablets. 62% of smartphone owners say they’ve made an online purchase with their device at some point over the last six months, and one-third of all e-commerce purchases made during holiday seasons were made with a smartphone. As e-commerce dollars now account for 10% of all retail, making sure customers have a stellar mobile experience is key to success in this industry.

Even traditional retailers cannot ignore mobile e-commerce, as 80% of shoppers admit to using their smartphone in store to look up information about a product. Common reasons include finding reviews, price comparisons, or other locations where the product may be available. Creating a user-friendly mobile experience needs to be a priority for retailers, as 40% users say they will shop with a competitor after a bad mobile shopping experience. Shockingly enough, retailers have plenty of work to do in this area, as 84% of users have reported issues with completing mobile transactions.

Consumer Focused

Since competitors are just a click or a swipe away on a mobile device, even while a customer is standing in a retail store, it’s important for retailers to make the entire experience as consumer focused as possible. How can retailers do this?

       Make the company website responsive, so that no matter what device and screen size the consumer is working with, the website adapts and provides a pleasant experience.
       Keep phone numbers in text form, so they work with the device’s “tap-to-call’ feature, and make it easier to share via text message.
       Consider building a native app, but stick with major market platforms, like Android and Apple iOS. Many large national retail chains and e commerce giants have done this successfully, such as Kohl’s, Amazon, Walmart, and eBay.

e-Commerce Providers Making an Effort to Stand Out

Retail competition is no doubt fierce, and Amazon is the perfect example of how providers are continually making an effort to stand out. The e-commerce giant grabbed consumers with the introduction of free shipping on orders over $25 (thereafter increased to $35), and again with the introduction of their Prime service that includes free two-day shipping on any order of eligible products.

Since the introduction of Prime, services have also expanded to include: access to a large library of movies and TV shows available for streaming to compete with services like Netflix and Hulu; access to a large library of streaming music and playlists to compete with services like iHeartRadio and Pandora; cloud storage for photos and music to compete with services like Dropbox, Prime Pantry, to compete with big box and warehouse stores, like Walmart and Costco, and more.

Amazon continues to evolve its services with Sunday delivery now available for certain items in certain markets, and the introduction of Prime Now, a service that promises delivery to Prime members in certain markets in an hour or less. As the program continues to expand, it may go nationwide within the years to come.  

Multi-Channel/Omni-Channel Approach

Physical retailers are now driving to create a shopping experience that runs seamlessly whether you’re in store on shopping online, via your computer or smartphone’s browser, a native app, or standing the in store. This can be seen with retailers like Best Buy offering free in-store picking up, or in Walmart offering free shipping to the local store of your choosing.

While this approach is easy for national retail giants, omni-channel POS software platforms enable small businesses to create the same seamless experience. This solution, for instance, works with a wide range of hardware and is compatible with a number of receipt printers and cash drawers, which can provide business owners with an affordable alternative to expensive equipment; and seamlessly creates an online store where inventory, customer profiles, and analytics data can all be managed together.

Driving for Consumer Loyalty

According to the 2015 Brand Loyalty Report, shoppers are enrolled in an average of 13.3 loyalty programs, but only 6.7 are active. The report also reveals 43% are very satisfied with the program experience, while 48% of loyalty program members want to engage with programs on their mobile devices. Top retail programs include: Amazon Prime, Kroger Fuel, Barnes & Noble, Food Lion MVP, My Best Buy, and Target Pharmacy Rewards.

Kohl’s provides an excellent retail example of driving consumer loyalty. Constantly putting products on sale and running discount promotions (with many of them targeted directly at Kohl’s Charge cardholders, these activities drive loyalty in a number of ways. Beyond the sales and discounts, they run Kohl’s Cash promotions, allowing shoppers to earn $10 in Kohl’s Cash to be redeemed at a later date for every $50 they spend. They recently added the new “Yes to You Rewards” which allow shoppers to earn points for every dollar they spend, regardless of how they pay. These rewards work both online and in-store.

Free Shipping and Free Returns

Research shows 28% of shoppers will abandon their shopping carts if they’re hit with shipping charges they didn’t expect. If your business can’t afford to offer free shipping, at least be upfront with the costs so customers know what to expect.

While Amazon may be well known for their free shipping policy, their return policy states return shipping is only free if the issue is a result of their error. Returns often cost the shopper money, so even if their original order is refunded; they’re out the cost of shipping. In some cases, it’s not worth it to the consumer to return the item. One way to win customer loyalty then would be to offer free return shipping. If you shipped the item for free in the first place, why make the customer pay to send it back?

Changes to the e-Commerce Landscape and What They Mean for Investors

e-Commerce payment giant PayPal is being spun off to become independent of their parent company, online auction site, eBay. The idea is that by splitting, the two companies will be able to grow faster, each within their own niches. PayPal is now moving into the realm of in-person mobile transactions, perhaps to keep up with the e-commerce trend. While both companies have competition, the more focused approach should lead to stronger growth, which is a better deal for investors.


Only time will tell where these e-commerce trends will further take us. It’s a fairly safe bet that retailers who choose to ignore these trends and signs likely won’t see the growth and support that retailers who act on the trends early.

About the Author: Nikolai Kuzentsov (Article Archive Here) is an award-winning financial analyst and professional trader with extensive experience in stock market analysis, investment research in FX, commodities, equities and bonds.  An expert in technical and statistical analysis. Kikolai is also an avid chess player and a black belt Brazilian Jiu Jitsu Practitioner. Nicolai writes at Nikolaiknows.com.

The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters. © EconMatters All Rights Reserved | Facebook | Twitter | Free Email | Kindle
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