From predictive personalization to green e-commerce… the trends shaping future technology strategies
Market researcher Euromonitor has unveiled the five tech-driven trends that will most redefine commerce this year. He identified that there are now 4.7 billion internet users in the world, or around 60% of the world’s population. Some 89% of industry professionals surveyed by Euromonitor expect consumers to judge their company on its digital prowess post-pandemic. This requires businesses to stay on top of digital trends more than ever.
With ever-changing perceptions of consumer loyalty, companies that accumulate the most useful data and make the most of it are best positioned, revealed Michelle Evans Global Lead, Retail and Digital Consumer Euromonitor International.
“Consumers are looking for more value in relationships”she says. “We also see that the notion of reward is changing. At the same time, people are more digitally savvy, leading to heightened expectations. Fortunately, there is more data and more types of data that retailers, brands and hotel operators can use to not only become more personal but also more predictive.
Loyalty is different today, she explained, and “next-gen loyalty” will evolve from points to personalized experiences.
Branded digital ecosystems are a tool in these customer retention efforts. Companies should look for new business models that help build stronger relationships with end consumers, she added. They are important retention tools and also a vital source of data.
“Companies must move from reactive customer strategies to predictive customer strategies”,she noted. “AI is going to be central to these efforts, not only because it allows companies to comb through data to deliver greater personalization. But it is also essential to strengthen real-time and even predictive strategies.
Faster lead times are needed in the last mile delivery industry
More of us are ordering food and groceries for home delivery, but as we become familiar with it, expectations are rapidly changing, especially around delivery times, and reducing those deadlines will be key to the growth of this category.
The share of digital consumers saying food and drink is a typical online purchase rose from 48% to 54% from 2020 to 2021, Euromonitor reported. But 42% of global digital consumers also complain about longer than expected delivery times.
We can therefore expect further transformations in this space, said the market researcher. Take the American company GoPuff, which has built its success on fast delivery of convenience store prices. Today, it operates nearly 600 of its own hyperlocal “dark stores,” or fulfillment centers that cater exclusively to online shopping. In November 2021, it expanded to 12 UK urban areas.
Euromonitor analysts expect traditional retailers to build their own super-fast delivery infrastructure. This will cause further disruption for convenience stores, convenience stores and other small retailers that sell many of the same products that super-fast players specialize in. The viability of current working practices will also be tested as consumer expectations for delivery times become more demanding.
Dark stores will be the way of the future, says Euromonitor consultant Bob Hoyler, “engendering a new battle for real estate to house inventory that can house items that can be delivered to consumers in minutes.”
The type of food and groceries ordered for fast home delivery will also change. With lightning-fast delivery times now achievable in many cities, urban consumers can use the internet to make what is effectively impulse shopping. “Consumers will use super-fast delivery to bring back impulse purchases,” said Hoyler, “the same way they would have bought a candy bar or soft drink from the store in the past.
Green e-commerce and the tension between convenience and sustainability
But the environmental impact of rising e-commerce sales is colliding with growing consumer concerns about sustainability, the market researcher observed, and amid the inevitable shift to e-commerce, businesses find themselves also under pressure to implement green solutions.
Due to the rise of last mile delivery, for example, online players will come under increased scrutiny to make products, packaging and delivery more sustainable as consumers demand green commerce. , predicted Maxim Hofer, consultant at Euromonitor. “We have seen a 60% growth in the value of good e-commerce globally between 2021 and 2026. At the same time, 65% of global digital consumers indicate they are concerned about climate change,”he revealed. This shows that companies will need to adopt more sustainable business models, he said. The pioneers will have the advantage of having a low environmental impact.
For example, in 2021, Deutsche Post DHL Group in Germany announced significant investments to accelerate the electrification of its last-mile delivery fleet. The company expects to be able to strengthen its position in the last mile by switching to emissions-free deliveries early.
“We have seen that consumers will increasingly turn to green e-commerce as a solution to the tension between online shopping and sustainability,”Hofer said. “In combination with increasing climate regulation, an accelerated transition to green e-commerce seems inevitable and will force brands, retailers and others to make strategic adjustments.
A larger share of consumers are expected to opt for click and collect in the future, Euromonitor believes. “Delivery has long been the default fulfillment message for many consumers,”explained Hoyler. ”But as e-commerce accelerates, click and collect is becoming a popular alternative because it combines the convenience of online ordering with the immediacy and instant gratification of picking up an item from a physical outlet.
Click and collect is also potentially cheaper for consumers and is also a greener option, helping operators reduce both emissions and the need for additional packaging.
Into the metaverse – taking online shopping to the next level
With consumers likely to demand more substantial immersive experiences, virtual technology has the potential to take online shopping to a new level and can potentially create a more “holistic” online world, Evans said. “The Metaverse combines several emerging technologies, including virtual reality headsets, social media, live streaming, cryptocurrencies and gaming platforms,” she explained. “This advancement will become more important as the purpose of the channels evolves.”
For example, historically, consumers visited stores to “really” shop: a leisure activity where browsing was as much the goal as any purchase. Digital channels, on the other hand, only had a transactional role. But as e-commerce grows, consumers will go online not just to shop, but to make purchases as well.
Its technology is becoming embedded in people’s daily lives, Evans observed. “These platforms offer the opportunity to engage with loyal audiences,” she says. “As the metaverse comes to the fore, brands large and small are exploring how they can make money.” And as with any new technology, those who are among the first to recognize its value will reap the greatest rewards. “2022 will be a year for favorites, but soon every brand will need a metaverse strategy,”she added.