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Six Digital Commerce Shopping Trends to Watch in 2013

January 2, 2013

2013-300x191Commerce continues to evolve at a rapid pace, with digital experiences continuing to reshape shopping.  The transformative impact of digital commerce will continue– and indeed accelerate–  in 2013 with six notable trends leading the way:

1. The arrival of more intelligent, digitally-oriented, destination-based stores

The prediction for the ‘death of the store’ has not come true, as stores continue to remain an important and vibrant channel for retailers and shoppers.  Rather than disappearing all together, stores will get smarter, more nimble and become more of a social, experience-based destination for shoppers.  We’ll start to see smaller footprint stores in 2013, stores that are driven more by virtual inventory than physical inventory and ones that are more flexible and intelligent, displaying product and allocating inventory that is selling best in that local market and a particular location

Retailers such as Target, with the smaller footprint City Stores,  Nordstrom, with a more flexible utilization of cross-channel inventory for smarter merchandising and Vero Moda brand virtual, pop-up stores are good examples of what we will see more of in 2013.  We will also see stores, with a greater reliance on virtual inventory that frees up floor space, become utilized more for events that attract shoppers and connect them emotionally with the brand. Retailers such as lululemon, whose stores are destinations for like-minded yoga enthusiasts, are a good example of this.

2. The continued decline of the incredibly shrinking Point of Sale (POS) 

The traditional cash wrap in the store is slowly disappearing with retailers looking to replace cash registers, free up retail space for selling and unburden themselves from the cost of legacy POS systems.  2013 will see an influx of “registerless” stores that mark the move towards traditional wraps disappearing and extending beyond the traditional function of a “queue processing” to one augmented by the availability of better customer, product, inventory and order data. Retailers such as Urban Outfitters and JC Penny took major steps in 2012 to end traditional checkout and more retailers will follow suit in 2013. 

3. The arrival of smarter mobile shopping experiences

2010 was the year for retailers to get a mobile presence in the market to keep up with consumer expectations, often in the form of mobile optimized websites that were quick and cheap to deploy. 2011 was the year to “do mobile right” and think about ways to optimize their mobile websites. 2012 was the year of the tablet, namely understanding whether a traditional desktop website will suffice for the tablet or a tablet optimized site made more sense.

2013 will be the year that retailers create smarter mobile shopping experiences by designing for mobile first and providing contextual, mobile specific experiences. With the mobile device install base expected to eclipse traditional desktop install base in 2013, we will see traditional “desktop first” design, with its long-form content and larger screen size navigation be replaced by “mobile first” design where the mobile consumer is put front and center.  This will greatly simplify user experiences for shoppers and development strategies for retailers.  We will also see retailers in 2013 focus on differentiating their mobile experiences with richer, more interactive user interfaces that is very channel and device specific.

Experiences will emerge, such as “in-store mode” for mobile websites that detect when a shopper is in a retailer’s store (through geo-fencing and the device’s GPS) and offers up a store-specific experience that is different from when they are not in the store.  Walmart’s In-Store Mode is a good example of this type of experience we can expect to see more of in 2013.

4. The emergence of the elusive digital wallet

The idea of a digital wallet has been around for long time, but has never been fulfilled due to the complexity of the challenges in the ecosystem, namely financial institutions, device manufacturers, credit card companies, technology vendors, retailers and others not being able to agree upon standards.  With Apple’s release of Passbook in iOS6, we will see in 2013 the first step towards overcoming these challenges, namely because of Apple’s influence in the industry, the fact that iOS comprises a large percentage of the consumer mobile market, and perhaps most importantly—Passbook solves a real consumer problem.

By aggregating loyalty program information—from coupons to boarding passes—in one central location on their mobile device,  consumers no longer need to manage separate, retailer-specific silos of information through email, mobile apps or other digital interactions. In time, Passbook will connect payment processing to retailer purchases online and in-store (Apple intentionally steered clear of payments in the first release), taking the next step towards fulfilling the dream of the elusive digital wallet. Other vendors, such as Googleand PayPal will follow suit with similar solutions, further pushing the digital wallet to reality. While challenges such as card present transaction fees for in-store purchases and what the main technology will be for processing payments (Near Field Communication (NFC), electronic barcode scanning or another standard) will still need to be negotiated, consumer adoption coupled with increased retailer development of integrated solutions with Passbook (similar to pace we’ve seen in 2012 already), will accelerate the emergence of the digital wallet in 2013.

5. The rise in new services to combat the “Amazon effect”

Amazon has been an incredibly disruptive force in the industry—in a good way for consumers by making it easier for them to shop—but in a bad way for retailers, putting the squeeze on their direct-to-consumer model, both online and in the store. 2013 will see a rise in new services provided by retailers to combat the “Amazon effect” to attract consumers and preserve and grow their online sales. Examples include new experiences in shipping services and personalized recommendations.  Amazon has competed on shipping for a long-time, enabled through growth in their fulfillment centers and Amazon Prime, aiming to close the shipping window to same day or less.

In 2013, same day shipping will become the norm, with providers such as eBay NowTaskRabbit and others leading the way. Retailers will leverage these services as well as provide their own same day shipping services through their web shopping experiences, perhaps leveraging these third party services.

Recommendations—a long-time staple of most online experiences—will also see a transformation in 2013. Amazon Friends and Family Gifting will push retailers to make recommendations more personalized and relevant in the online shopping experience.  Retailers will seek to enable gifting, leveraging Facebook data and/or other customer data they already have to suggest gifts shoppers can buy for friends that make sense—based on that friend’s past shopping history and a relevant event, such as a birthday or anniversary celebration.

6. The extension of personalized social commerce into the physical world

To date, social commerce has largely been focused on what shoppers can do online, with a heavy focus on Facebook and interactions, such as gameification.  2013 will start to see social commerce become more present and applicable in the physical world, whereby shoppers can get relevant, personalized data from their social networks based upon where they are physically shopping and with the products they are interacting. The consumer-held mobile device will be the connective tissue to make this happen in the physical world, whereby location-based services—activated either actively by the shopper, such as a physical check-in on the mobile device or passively through opt-in, automatic GPS detection and check-in—will activate a number of digital experiences in the store through retailer provider devices, such as tablets, digital signs, digital shelves, and associate-held mobile POS devices.

Data about that shopper and his or her social graph will provide contextual information about products and offers, such as in-store ratings and reviews on digital signs, number of “likes” a product may have displayed on a hangtag or store associate suggestive selling based on social data. Such interactions will happen over time, emerging in 2013 as leading retailers begin to uncork the power of Big Data, particularly by analyzing tweets, Facebook likes, Pinterest pinned products, Instagram product image likes, and other social data and mapping it against customer lists, transaction information and loyalty data.

While other trends will transform shopping in 2013, none, I feel,  will be as impactful as these six. What do you think? What trends do you see transforming the way we shop in 2013 and beyond? Share your thoughts in the comment section below.

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