Future of Online Retailing — Four Predictions

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Forrester and Jupiter report that more than 70% of online shoppers seek out user reviews before making a purchase decision.  MarketingSherpa reports that 84% of consumers prefer the opinion of other consumers vs. experts.  Hundreds of retailers including WalMart, Best Buy, HP, and the Home Depot have followed Amazon’s lead by allowing their consumers to review products in the online channel.  Consumers demand social commerce solutions and retailers are driving measurable results.

As consumers are presented with increasing choices, channels, and messages, they will continue to turn to peers to discover, research, and make decisions about products and services.  Retailers will need to utilize technology and best practices to provide authentic, relevant, and effective social commerce solutions to retain their customers into the future.

1)    SOCIAL CONTENT IS GOING MULTI-CHANNEL

The future of reviews and social content is going beyond the product page and into other channels such as mobile phones, kiosks, print collateral, online advertising, and social networks.  It is clear that consumers rely on social content to make purchasing decision.  They will expect to be able to access to this content regardless of channel in order to inform their purchasing process.  The retailers that provide this multi-channel access will develop competitive advantages in their markets to attract and retain consumers. 
Additionally, more retailers will see the value of integrating social commerce with CRM and other “back-end” channels. Retailers will start to leverage social content as a key input into driving decisions in marketing, sales, advertising, customer support, and product design groups.   There is a big opportunity improve the top and bottom line by incorporating the “voice of the consumer” in every aspect of a retail business. 

2)    EXPANDING SOCIAL INTERACTIONS & CONTENT – “Micro UGC”

There’s a sizeable personal investment required for a consumer to contribute a product review, forum post, or blog post. In order to capture content from a wider population of consumers, we will see social commerce solutions enable additional types of social interactions such as: votes, polls, questions, answers, shared wish lists, and social networking.  These consumer-to-consumer interaction and content types will further support consumer product discovery and purchasing decisions. 

3)    SOCIAL COMMERCE WILL DRIVE PRODUCT DISCOVERY

As Barry Schwartz elegantly outlined in “The Paradox of Choice”, consumers today are offered in increasing number of choices in all purchasing decisions.  In response to this challenges presented by making choices in this environment, consumers will increasingly rely on best practices in social navigation, profile affinity, and social networks to help them discover the best products and services for their needs.  These solutions will be focused on the discovery of products and complement product review and Q&A solutions that aid the consumer purchase decision.

4) DECENTRALATION OF DATA & CONTENT

For retailers to expand the ROI driven from the many forms of social interaction and content, we will see a trend of opening up content to be absorbed by new channels. The online travel industry and Amazon have had a head start in this trend.

The purchase process of consumers in the future will become a more complex ecosystem of touch points and interactions, mostly occurring outside a retailer’s web site. The retailer’s opportunity to influence within this ecosystem is dependent on its interoperability of product and social content with external applications.  The whole point behind RSS, APIs, XML feeds, and other data sharing technologies is that they allow consumers to customize and personalize their online experience.  I expect that aggregator interfaces (iGoogle, MyYahoo, web browsers, social networks) will enable commerce from within a customizable interface that represents a mosaic of the consumer’s favorite brands and products. As more consumers purchase through these interfaces, more marketers will win the case to open up and de-centralize their data. In turn, the sharing of this data will drive more external innovation and value consumers and retailers.

They tagline for tomorrow’s retailers: OPEN for Business!

3 Responses

  1. Unsung Zero says:

    As I commented earlier in a similar article from a similar blog, this whole thing makes so much sense because we are all unavoidably consumers (to some extent). I personally consider myself to be part of the “70% of online shoppers seek out user reviews before making a purchase decision” as well as the “84% of consumers prefer the opinion of other consumers vs. experts”. However, I am curious if there are any businesses or industries that may, for any reason, be an exception and unable to benefit from the social movement. For example, can small businesses without much exposure justify the time investment to set up a social network? Or is my example a good one of “if you build it, they will come”?

  2. Fergus Burns says:

    Great post Sam
    We’re working hard to make 4) DECENTRALATION OF DATA & CONTENT a reality.
    See http://www.ryanair.com/site/EN/bargains.php for example – and a lot more to come
    Met Brett last year in London – should hook up again
    Best regards
    Fergus

  3. Identity Guy says:

    The future is social, I find myself reading all the reviews on Amazon more than other sites maybe because the info is so detailed. A favorite site of mine is epinions for reviews.

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