Header image source: YouTube/Recode
Venture capitalist Mary Meeker recently dropped this year’s annual release of her Internet Trends.
It’s not deemed the “most anticipated slide deck of the year” for no reason. Standing at 333 slides, there’s a lot to digest in her slide deck for the tech community. Running the gamut from insights into digital media, internet trends, and thoughts on customer experience, retailers who take the time to sift through will discover a wealth of insights.
We spent some time going through her slides and picked out five key observations applicable for e-commerce retailers so you didn’t have to.
1. E-commerce growth rates continue to climb as the Internet economy matures
In her report, Meeker outlined the maturation of the Internet economy, observing:
- More than 50% of the global population is now online, growth is harder to find
- Global internet user growth increased by 6% last year, down from 7% in 2017.
- New smartphone unit shipments were down 4% last year
At the same time, e-commerce globally continued to grow a solid 12.4% versus 12.1% of last year, and made a considerable 15% of total retail sales. It seems there’s still room for e-commerce to grow even as the internet matures. Retailers would be wise to make use of this opportunity as the retail market continues to shift to a digital space.
But e-commerce growth isn’t just coming from conventional sources like offline sales shifting online or customers buying from retailer’s online stores.
According to Meeker’s report, alternate factors like the integration of social shopping into mobile apps, devices and games or e-commerce reaching new global communities and demographics have contributed significantly to e-commerce growth. We foresee that in the coming years, retailers also need to look beyond conventional sources of growth to tap on emerging sources.
2. On the flip side, physical, in-store experiences still matter for consumers
Despite its formidable growth, e-commerce sales only consist of 15% of total retail sales. In fact, the percentage of year-to-year growth has declined in e-commerce sales from the last quarter of 2017 to 2018.
The implications are clear: Consumers spend a lot of time online across multiple devices, but still flock to physical stores to make purchases.
“While consumers are spending a ton of time online — sometimes even on multiple screens as the report notes — real-life experiences are still king, For marketers, this simply means that brands that provide consistent, omnichannel experiences are poised to fare better than those that take a single-channel approach.” – Niki Hall, Selligent.
For retailers, understanding your customer data and having a complete overview across the entire customer journey is therefore essential.
3. Social commerce presents a significant opportunity to create better customer experiences
In last year’s roundup of Meeker’s report, we saw that social commerce was on the rise on visual social media platforms like Instagram and Pinterest, especially in a younger demographic.
Since then, social commerce has matured considerably. Starting off with Instagram Checkout introduced in March this year, social and messaging apps are increasingly incorporating e-commerce and mobile payment features to make the browsing-to-payment process as seamless as possible.
In Meeker’s report, these integrations have since grown exponentially; with South Korean messaging app KakaoTalk incorporating KakaoPay; their own mobile payment and digital wallet service into the app in 2014. Japanese messaging app Line soon debuted their own payment solution that year. Line also recently released a dedicated payment app – Line Pay App.
Facebook has also slowly introduced payment solutions to WhatsApp to give customers new ways to pay businesses when they make a purchase – piloting this process in India from last year.
For e-commerce retailers, these are fantastic examples of how you can use technology to create a better customer experience. After all, your potential customers are on these platforms and want to purchase directly through these channels. Given the time users spend in these apps connecting with people and brands, social commerce continues to be a fantastic opportunity for retailers to tap on. We foresee it will only continue to grow in the years to come!
4. Smart, ethical use of data & artificial intelligence can improve customer satisfaction.
In 2019, winning businesses rely on the smart use of data. They rely on technologies and tools to collect customer data, manage communication with customers and optimize business processes.
For example, e-commerce services like Instacart use data to predict purchases, optimize in-store availability and make appropriate replacements for items likely to be out-of-stock. Data also aids the fulfillment process. By understanding what exactly happens in your supply chain, you’ll be able to make more informed decisions on factual answers.
We couldn’t agree more on the power of data to transform your business!
Data is now fundamental to how people work & the most successful companies have intelligently integrated it into everyone’s daily workflow…Data is the new application. – Frank Bien – CEO & President, Looker, 6/19.
In an astonishing insight, customers are also willing to share some of their personal data in exchange for personalized customer experiences. According to an Accenture Global survey, 91% of customers prefer brands that provide personalized offers & recommendations.
At the same time, people are more concerned about internet privacy compared to a year ago. In the wake of personal data breaches like the Cambridge Analytica scandal and the subsequent regulations like GDPR in the EU, consumers and businesses alike are realizing the power and potential of personal data.
How should e-commerce retailers respond? Maintaining trust with your customers is key. While customers are willing to share their personal data with brands, customers have also said that they won’t use a brand again if the company had used consumer data without the customer’s knowledge
Therefore, retailers who can manage the tremendous volumes of data available and optimize it for business use cases while observing the privacy of their customers will thrive in an increasingly data-driven world.
5. Retailers and e-commerce platforms are stepping up their delivery game.
Unsurprisingly, the growth of e-commerce brings demand for fast, flexible and reliable delivery services. Starting with Amazon Prime leading the way in delivery experience as an e-commerce differentiator, customers have greater expectations from e-commerce retailers in delivery.
Besides Amazon Prime in the US, other retailers and companies are taking notice of the need for an exceptional delivery experience. Meeker’s report highlights several companies that are leading the way around the world in making the delivery experience a priority.
- Meituan Dianping: a Chinese company which started out as a group buying platform and now serves merchants as a combined marketing and fulfillment service. They doubled their number of active merchants to hit nearly 6 million active merchants in 2018.
- In Latin America, same-day delivery startup Rappi digitalizes the delivery ecosystem for the region, reducing inefficiencies and high costs of delivery.
The tip for retailers is clear: the delivery experience matters for your customers. While Amazon is widely known as pioneering the concept of fast, efficient delivery, other companies around the world are sitting up and taking notice.
E-commerce retailers have lots to digest from Mary Meeker’s insights on the Internet and technological landscape
We’ve highlighted the salient points for e-commerce merchants to digest and put into practice. A focus on customer experience across multiple channels along with the smart use of data while balancing it with transparency in the customer relationship are some of the key takeaways from Meeker’s report.
Looking to discuss the implications for your business? Reach out to our team here or sign up to our newsletter for more of such insights.