Five eCommerce Trends We're Following in 2018

Five eCommerce Trends We're Following in 2018

While there are some trends that are so obvious they don’t need mentioning (Mobile shopping will increase! Companies and consumers will use social media platforms for e-commerce a lot more!)  there are others that we’re following that are just as intriguing and not as widely covered.

 

1. Experimentation with Brick and Mortar

Expect a lot more announcements (like this one from Samsung) from companies that are enabling retailers and brands to launch pop-up stores in the available vacant retail spaces around the country. The pop-up “movement” once the domain almost exclusively of experimental chefs opening short-term restaurants have become increasingly popular with online-only stores looking to make stronger connections with shoppers. Retailers are also using the pop-up model to launch capsule collections and create “temporary” departments within their stores.

 

Pop-ups aren’t the only way that retailers will experiment with brick and mortar models. In October, Nordstrom launched its new “local” model, a small (by their standards) 3,000-square-foot showroom-meets-hangout spot where shoppers won’t encounter any dedicated inventory, but will be able to sip a cappuccino (or a microbrew) while getting a mani/pedi and then potentially try on merchandise that an in-store stylist handpicked for them from the Nordstrom website. Will it work? Who knows, but we know that innovative retailers like Target are willing to try just about anything to please experience-minded millennials who still like shopping in person.

 

2. Private Labels Go Big

Retailers like Amazon, Target, Walmart, and Kroger have become so competitive on price that their collective bottom lines are all taking a hit. The solution may be something familiar to lovers of Costco’s Kirkland Signature products: private labels. Private labels give those retailers the flexibility they need to address specific shopper concerns while having more control over costs. From Investor’s Business Daily (October 2017):

“For a retailer, owning a brand means margins are higher, prices are more competitive, and customers can't get the products anywhere else. At Amazon alone, the private-label market represents a $1 billion gross-profit opportunity, Morgan Stanley has estimated.”

Private labels used to be an avenue for discerning grocery shoppers to save money on store brands. However, forward-looking stores like Trader Joe’s, Whole Foods, and Target reinvented the store brand throughout the 90s, making it a trusted alternative that buyers trusted and even preferred. The future of online retail (as well as brick and mortar) will unquestionably follow in this mode, with Amazon continuing to lead the pack.

 

3. Expect More Product Diversity

One of our consistent messages here is that digital success relies on speed. Trends in the digital space move quickly, and can change practically overnight. Smart, omnichannel sellers need to plan for product diversity and create nimble strategies that follow consumer tastes that are even more mercurial than ever.

Consider that specialty stores need to make products for an increasingly diverse audience. Consider that more and more shoppers are expecting to find everything they want and need online. Consider that “seasonality” is mattering less on the digital shelf than it did on the physical one. Consider all that and plan accordingly.

 

4. Less Bad News

Yes, there are stores that are probably not going to make the cut, and bankruptcies will continue, but 2017’s watershed was a tipping point...probably. Also: the 2017 store closures mean less competition for the many physical retailers who are still around.

We loved this coverage from Retail Dive, and this quote from Phillip Emma of Debtwire:

"With fewer stores expected to close in 2018, there may be an opportunity for the survivors to generate some better margins by not having to compete against [liquidation] sales...I think you can look at both J. Crew and Neiman Marcus, who, while still facing challenges, have seen their results start to improve because they have started to align their inventory levels to their sales results, providing an opportunity to push up gross profit margins."

We can expect that store closure announcements in 2018 will continue as the collision of overexpansion and online sales hit even stalwart stores like Sam’s Clubs (that announced today it’s closing 63 underperforming stores around the country). We’re not out of the water just yet, but the worst may be behind us…for now anyway.

 

5. Personalization

If you’re at NRF this week, you’re probably already a little weary of this year’s buzzword: personalization. It’s been a buzzword that has floated in and out of fashion (and practice) since the dawn of web shopping. Contextually, in 2018, it means anything from streamlining suppliers to using AI. It refers to customization and the hybridization of online and in-store shopping. For fashion brands, it could mean leaning more into online influencers who have niche audiences.

In our world: we know one thing about personalization, and that’s that you’re going to need data and a lot of it. You need the right data to target the right customers for promotions and product launches.

What’s going to work? What does personalization really mean in 2018 and how will it differ from all those other times that retail swore by it?  However you personalize: you’ll need to measure the overall success of every single online innovation with measurement and data.

 

The Content Analytics dashboard sits in between your shoppers and your content, measuring the efficacy all of your online initiatives. No matter where 2018 leads all of us, we’re here to help you make smart content decisions that improve the online experience for sellers and shoppers alike. Let us show you how our end-to-end platform can improve your content and increase conversions in 2018. 

 

Further Reading

5 Ecommerce Trends Everyone Should Pay Attention to in 2018
Adweek
December, 2017

4 E-Commerce Trends to Watch for in 2018
Huffington Post
December, 2017

7 trends that will disrupt and define retail in 2018
Retail Dive
January, 2018

How Private Labels Could Be Amazon, Target's Next Cash Cow
Investor’s Business Daily
October, 2017

Terry Lundgren, Retail CEOs All Agree: Personalization Is Paramount For 201
Retail Touch Points
January, 2018

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