eCommerce 2014: The year of evolution rather than revolution
When it comes to eCommerce, this will be a year of evolution rather than revolution. We won't see anything radical per se, rather a maturity of ideas that have been talked about over the last few years that are only now becoming realistic for retailers today.
The term "big data" has been talked about a lot, yet nobody has really illustrated what it means for the eCommerce world or how to use it in a realistic and nonabstract way. So, the term became another irrelevant technical phrase that was mostly ignored, as it was never positioned in a way that meant anything real.
My view on "big data" is that the "big" element will be taken away and made more relevant to those who want to use the behavioural data they have available to them to help grow their business. The main concept of "big data" is that enterprises are capturing and storing so much information now in every interaction, that it can be harnessed for other uses (although most evangelists championing the term don't really show how exactly to do that). However, as there is so much data available, how do we know what is useful and what is not?
During 2013, many retailers found the market in general to be quite tough. While we saw some brands disappear from the high street, we also heard a lot of our customers talk about very competitive trading conditions online.
The headlines spoke about the best "Black Friday" and "Cyber Monday" recorded, but usually these figures talk about turnover rather than profit. Furthermore, it seems there were more retailers with an online presence than ever before, making it difficult for those looking to capitalise on digital trading with so much competition around.
There were some of the usual big names claiming they were capitalising on more people going online to shop, but I believe these retailers were the ones who had already decided what information of their "big data" was useful to them and so began to leverage the data they had about their customers' shopping behaviour to target them.
These aforementioned retailers are mining the "big data" they have on each customer and grouping them to build relevant campaigns to target those customers with. They are able to look at their data and decide, for example, which customers do a lot of shopping, or those who have an increased 'average order value' (AOV) in October or November and so they begin to target them with promotions and vouchers before the main Christmas rush. These retailers are able to look at the specific product categories that customers have bought from in the past and decide if there are particular products they will then recommend to them, with a combined promotion or voucher. This proactive approach to relevant merchandising can have a significant impact on AOV and revenue in general.
However, recognising trends in data is only one part of the issue. The other, using it in an easy and effective way, is also very important. Many eCommerce solutions have now made it easier to offer personalised journeys within their systems using business configured rules, content and data. Personalisation is not new, but what has been problematic is for retailers to understand how they can use the tools available to them to create relevant personalised offerings. The combination of having the data and easily using it has been a breakthrough for some, but I believe it will be realised for many more retailers in 2014.
Those retailers doing it already are being quite targeted about which data in their enterprise they want to mine and so calling it "big" I think makes it scarier than the reality. Just focusing on a small set of data that will have a real impact will be realised by more retailers for eCommerce in 2014 when trying to grow their businesses. Looking at the little sets of "big data" across the customer touch points will allow for much better targeted data and growth. We will start to see a convergence of more relevant data across different channels becoming more important and being tied together, where the behaviour of one channel is allowed to affect the others. For example, what a customer browses for and buys in store will have an effect on how they are engaged in the digital world.
Furthermore, social networks will begin to have a much bigger influence on what and how the customer buys in 2014. While I think these networks are not quite at the stage where a shopping transaction will occur (or at least in a way that a customer would consider secure), the influence of the data on these social channels will play a big part in 2014. For those who "Like" a brand or who "hashtag" a phrase will be letting retailers and brand merchandisers know a lot more about what they actually want, so they can be targeted with more relevant ads to tempt them to buy, rather than providing very generalised offerings about what other people may be buying.
The year just gone has seen a lot of these ideas executed by those very few retailers who have the budgets to make significant investments in these areas. While very large investments may not be necessary, those who do make some investment in the infrastructure to capture the data, the analysts that can interpret it and the ecommerce frameworks that can surface the merchandising, will capitalise on the retail opportunities of "Grey Thursday", "Black Friday" and "Cyber Monday" in 2014.