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Thursday, 6 June 2013

4 top trends in e-commerce that you cannot ignore

As a marketer, whether or not you sell your product or service online, here are some key trends that you need to be aware of:

1)The decision making dynamic is shifting online

Increasingly, a large part of the decision making process is being influenced online and there is a potential for brand intervention. For example, Pew Internet Research found out that 80% of internet users first turn to the internet when they have a health related query. In India, an estimated 5.3 million people accessed the internet last year only to get information about products.

2) E-commerce is not confined to affluent upper SEC consumers alone

A recent report by McKinsey and Co. showed that almost overnight, China had become the world’s second largest e-commerce market, after USA. E-commerce sales in China reached $190 billion last year. Consumers in lower-tier cities of China, with less disposable income, are spending as much as those who live in higher-tier cities. India may be set to follow in China's footsteps.

Already, the EBay Census 2012 shows that top 10 e-commerce states in India include Rajasthan (No.3), UP (No.8) and Haryana (No.10), while the top cities include Jaipur, Chandigarh and Pune. We may lag behind China in e-commerce growth due to slower internet penetration, especially mobile internet, but it is likely that we will follow in China’s trend. Definitely, e-commerce will not remain an urban, upper SEC phenomenon. The small town buyers have aspiration, increasing affluence and till now, access was the only barrier. Credit card penetration is only 5% but Cash on Delivery has taken off and has a penetration of more than 30% among online shoppers, higher than credit card as a payment mode.

3) In-store intervention is important
      People search or comparison shop on mobiles when they enter a store and this online decision making represents an opportunity or threat to a brand. Increasingly, brands and retailers try to engage with the shopper in-store to ensure purchase. Take the case of Sephora, a large international cosmetics brand. They have built an app only to enhance the in-store experience – storing loyalty cards and offers, giving history of past purchases and letting a consumer ‘scan’ any product to bring up information, ratings and reviews. WalMart already has a mobile app but plans to make it even more intelligent – it will automatically generate your shopping list, you can scan products to reduce time at check out etc.

In our country where a lot of people still shop at brick and mortar stores, but increasing number have internet enabled smartphones, there is a possibility to use mobile innovatively to remind, re-inforce or stimulate purchase at the outlet.

4) Social Retail

Most people like to shop with friends, family or colleagues and the new trend of social retail is growing to make it possible. This is especially likely to be big in India where shopping in certain categories signals status and people would like to share/ project it.

The potential of social retail was spotted as early as 2011 by Nick Swinmurn, entrepreneur and founder of online fashion retailer Zappos. He launched RNKD, an e-commerce site which rewards users for taking photos of everything in your closet and tagging it with the brand name and the location of purchase. Brands get to know their users, and users get cool deals. Fashion and clothing are synonymous with identity, so this is also a great way for people to browse others tastes and identify with what appeals to them.

Social health is a huge area of opportunity and many start-ups are capitalising on it.