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

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F E

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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

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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

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RE

SP

ON

DE

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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

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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 | hamutal@researchci.com

More articles and researches on Carmelon Digital

Marketing website:

http://www.carmelon-digital.com