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Enterprise Marketing & Promotions Management

The Future of eCommerce for Retailers: From Amazon to Augmented Reality

By / September 2016


First, Amazon introduced two-day free shipping with a Prime membership in 2005. With Amazon Prime Now, consumers can expect two-hour shipping for necessities such as bread, vitamins, shampoo and printer ink. Up next, Amazon Air will introduce drone delivery in 2017 or 2018.

eCommerce has been forever disrupted as consumers’ need for instant gratification becomes even more immediate. Shoppers are used to buying everyday items on the internet from the comfort of their homes or whenever they have free time to browse online. Soon driverless cars will get in on the act with faster, cheaper delivery, as well.

Robert Peck of SunTrust Robinson Humphrey calls this E-Commerce 2.0, saying, “E-Retailers are leveraging new capabilities in old business models to expand existing and new markets like apparel, grocery and personal care, where eCommerce had only limited penetration till now.”

A Business Insider article notes that specialty retailers are populating the e-commerce ranks now, including Warby Parker, Blue Apron, and The Honest Co.

Cheaper cloud services are making it easier for boutiques and start-ups to enter the marketplace. These smaller players can also deliver lower prices and personalization because the people making the products are also the ones putting them in boxes and shipping them to consumers. This cuts out the middlemen and overhead of big box retailers, allowing for more affordable budgets.

An eMarketer study on retail eCommerce sales, states that internet purchases will make up 7.4% of the total retail market worldwide, or $1.671 trillion. By 2019, that share will jump to $3.578 trillion. However, retail eCommerce will still only account for 12.8% of all retail purchases.

In fact, online retailers continue to create physical locations to elevate the brand experience, as well as enhance fulfillment and customer service. This click-and-collect model allows shopping to be done online, but the items are physically picked up by the consumer at a fulfillment center or a retailer.

Purchase & Pick-Up

According to the 2016 eCommerce Trends Report by Absolunete, an eCommerce agency based in Canada, depending on the types of products sold and the retailer’s network of physical stores, the proportion of consumers who prefer to pick up their purchase in store can reach up to 40%.

The report states, “offering customers the option to purchase and pick-up often increases the average purchase value.” Advantages to retailers when offering the purchase and pick-up option, include:

  • Increasing net sales once the consumers is at the store picking up their online order
  • Increasing conversion rates by making it easy for consumers to get their merchandise
  • Decreasing return due to in-store exchange options
  • Decreasing shipping costs and thereby increasing profit margins

In-Store Digital

The Absolunete report predicts the rise of “in-store digital,” where consumers make online purchases while inside the physical store. The report says it’s increasingly common to see in-store advertising screens enabling shoppers to search for and buy products online that aren’t available on the store itself. Connected kiosks and displays will also allow real-time, contextually-relevant messages to be displayed.

Social Media Drives eCommerce

In recent months, the largest social networks, Facebook, Twitter, YouTube, Instagram and Pinterest, have been testing or introducing integrated commerce options connecting buyers to brands. In addition to increasing engagement, the networks are opening new revenue streams.

According to Absolunete, solid social media management allows online stores to generate results that are sometimes superior to search marketing strategies such as Google Adwords. Pinterest, Facebook and Twitter are working to enhance their value to online retailers by adding functionalities that will guide the shopper to product pages with a goal to convert their users into online retail customers.

Virtual and Augmented Reality for eTailers

The popularity of Pokemon Go has elevated virtual reality (VR) and augmented reality (AR) to the mainstream.  Consumers are demanding the same level of interaction and real shopping experience while online. Melding the online and real-world will differentiate a brand and increase conversion rate.

One example is Epson’s Moverio smart glasses.  The new technology allows online shoppers to click the “GoInStore” button and a sales associate at the physical store will walk the customer through luxury products while wearing the smart glasses. The smart glasses can initiate a two way voice call and a one way video stream of whatever the sales person is viewing.

Luxury car dealer Amari in the UK uses the glasses to showcase their high-end cars to online prospects. Amari’s customers include international investors and collectors who typically know what they want but often have to rely solely on the pictures that are on the website. The smart glasses enable customers to travel “virtually” to the showroom in real-time and experience the cars remotely, driving the purchase decision.

The eCommerce model is expanding – including the integration of online and instore with the popularity of purchase and pick-up and instore digital. Learning from the success of the eCommerce pioneer, Amazon, retailers have increased opportunities to evolve their omnichannel strategies. Using new technologies and catering to consumers’ need for instant gratification, personalization and augmented reality, retailers will continue to be relevant and profitable.


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