2019 saw the retail sector continue to battle to keep ahead in an environment of rapid market, technological and consumer behaviour changes. Couple that with disrupted spending habits, both in terms of level of spend and the channels consumers prefer to buy through, as well as rising costs, the UK uncertainty surrounding Brexit, and increased international competition, it all added up to another challenging year for retailers.
While 2020 will undoubtedly bring a new set of macro-market challenges, that are outside any one organisations’ control, retailers can ensure they maintain or increase their competitive advantage by staying close to trends, pre-empting consumer preferences and implementing the right technologies to simplify the purchasing process and increase customer engagement. This is according to Andy Burton, CEO at digital commerce consultancy Tryzens.
Burton commented: “Innovation for engagement will continue to drive retailers’ priorities in 2020, and with this in mind, our talented team of digital commerce practitioners have outlined the key trends we see impacting eCommerce agendas in 2020:”
1. Contextual commerce
Contextual commerce is the notion of retailers taking on the relevant concepts that enable consumers to purchase wherever, whenever and however they want. It essentially refers to commerce cues that appear seamlessly in everyday activities and places, whether that’s buying a product while walking by a store window or the second a friend shares it on a social channel. It also includes pop up stores, as we’ve seen through the likes of Amazon’s ‘Clicks and Mortar’ pop-ups last year.
This includes simplifying the way in which products are found, using the likes of voice and image search, natural language processing and social selling, as well as tools to ensure the right product has been found, such as improved content options, VR contextualisation and size/fit where appropriate.
This is all about ensuring the shopping experience remains aligned with consumer habits and keeping pace with how they use and interact with various technologies in their everyday life, whilst building loyalty over the longer term.
2. Sustainable at the Core
Nobody can avoid the sheer weight of pressure when it comes to driving a greener, sustainable footprint as an industry. Whether looking at the issue through the lens of the recyclability of packaging materials, shipping distances, sustainable materials in products, energy efficiency or operational ethics, the agenda has changed and digital commerce provides the means to effectively showcase and explain the brand / retailers mission and mandate for a greener world.
According to data from an upcoming Customer Insight Report from Tryzens, 83% of consumers expect brands they shop with to have sustainable practices and 87% expect sustainable packaging. However, it’s not enough just to talk the talk, consumers want sustained change for good.
This will include the likes of “dark mode” which boasts the benefit of using less energy on devices as well as causing less strain on the user’s eyes. Adoption of this style is on the rise and we would advise retailers to start assessing their collateral and online presence for dark mode suitability.
3. Componentised commerce
Traditional eCommerce infrastructures are often built around an ‘enterprise software’ all-inclusive platform and, therefore, material change often requires retailers to deploy an entirely new application and /or IT capability which is resource hungry, lengthy and, unsurprisingly, costly.
‘Headless commerce’, or, as we prefer to call it, ‘API-enabled’ commerce places the focus on a technical architecture driving reusability of common capabilities, time to market benefits for changes, transactional scalability, efficient launch of new channels etc. This enables retailers to integrate a wide variety of social, visual and in-store digital touchpoints from the customer-facing front-end to a back-end eCommerce platform, which can be efficiently updated and changed at any point.
Over time, this means that retailers can be much more agile to adapt to changing consumer trends and behaviours and can quickly implement contextual commerce add-ons. Whilst this approach has typically leant itself to large scale retailers to date, the good news now is that the leading vendors in the eCommerce market are making strong in-roads, through their roadmaps, to enable this next generation of capability for retailers of all sizes.
4. The advance of payment preference
Consumer loyalty is not just limited to retail brands, it is increasingly being seen in the changes in behaviour around payment methods. The shift from the large corporate high street banks and credit cards is seen most clearly in the younger generations today where alternative banking and financial services like Monzo, Klarna and Zip are building their own loyal following across a range of payment services.
To help maximise customer engagement and sales success, retailers need to align with more innovative payment methods that resonate with their customers to help streamline the purchase process, as pre-registration with a payment service simplifies the data capture and authorisation process, reducing time and increasing convenience.
The ‘Buy Now, Pay Later’ (BNPL) payment options offered by firms like Klarna and Laybuy increase consumer choice, within the realm of responsible lending, and are coming to the fore in Europe, having already been well established in Australia and New Zealand for many years. The Tryzens Customer Insight Report found BNPL to already be the fourth most preferred payment method, after PayPal, then debit card and credit card.
Burton concluded, “The overarching theme running throughout all of these trends is keeping the customer at the heart of everything a retailer does; from recognising how they want to shop, to manging them across multiple channels, to demonstrating a commitment to sustainability, and to enable them to purchase through their trusted payment services. Those retailers recognising this and implementing the right technologies to enable these experiences will be the ones we see come out on top in 2020.”