Earlier this year, we took Euromonitor’s ‘State of the Global Tobacco Industry’ webinar with Shane McGuill. It was a very insightful presentation, which covered the impact of emerging regulation and discussed the new nicotine industry.
For today’s blog, we decided to talk about another one of their webinars. Michelle Evans is recognized as a thought leader in digital commerce, she was named to Innotribe’s Power Women in Fintech in 2015 and Asian Entrepreneur's Women on Top in Tech in 2016. In one of Euromonitor’s latest webinars, Michelle explains how technology is fundamentally reshaping commerce.
She starts by explaining how the world is more connected than ever before. Did you know - An estimated 46% of the global population uses the Internet, with this figure expected to rise to 58% by 2022.
Michelle lists the following as the five most impactful trends reshaping digital commerce in 2017.
MOBILE TIPPING POINT
Smartphones are becoming a must have device and slowly the default screen for brand engagement and digital commerce transactions. Eight percent of connected consumers already report using a smartphone to access the internet on a weekly basis. And - one fifth of connected consumers globally buy an item or service using the smartphone a weekly basis.
But there is only one true mobile-centric nation - and that’s China. China accounted for 1.1 billion mobile internet subscriptions as of 2017. For the first time in 2015, Chinese consumers made more purchases through mobile than computers. As of 2016, 66% of digital purchases were mobile based. Chinese connected consumers turn to their smartphone most frequently for service oriented purchases like entertainment tickets and food service takeaway/delivery.
Now this mobile-first mindset is being duplicated by its asian neighbours including Indonesia, South Korea and Thailand. In contrast, until now, major developed market have been slower to turn to smartphones as the default device for commerce.
Euromonitor projects consumers in Australia, US & UK will spend more through the mobile device than the personal computer for the first time during the latter half of the 2016-2021 forecast period.
NEW CONDUITS OF COMMERCE
Digital commerce is no longer restricted to computers or smartphones. There are a plethora of things all with the potential to disrupt commerce. These connected things could become an important tool for brand strategists, brand marketers and merchants looking to bridge the physical and online worlds of commerce.
The figures below put consumer adoption of IoT into perspective. We expect 28% forecast CAGR of smart wearables, which is fastest growing electronics category. South Korea is the growing leader for connected washing machines, accounting for 37% of their market. The US is the global leader when it comes to fridge freezer, with 15% already connected.
As of 2016, 52% of global households own smartphone. For many smartphone owners, this device is never out of reach - whether at home, work, school or out with friends. Smartphones unique position at the centre of the consumer’s everyday lives that promises to drive greater adoption and integration of IoT.
Making life easier for consumers. Many innovations are more subtle in nature, autonomise a process or removing friction from another. Michelle lists three ways the IoT will influence digital commerce:
- Improved Fulfillment Logistics
- Automatic replenishment
- Goods “as a service”
A generation ago, a consumer would visit a store to fulfill one’s shopping needs and undoubtedly pay in cash. Not anymore. Technology has changed commerce, including where and how consumers pay. Technologies is introducing consumers to more new payment environments. She lists several examples:
The Fitting Room: Despite news reports on the number of store closings, 85% of all apparel purchases globally were made in physical outlets as of 2016. For example - Oak Labs, which offers smart mirrors to improve the fitting room experience for its retail partners, will soon allow NFC-enabled payments through those mirrors.
The Car: The arrival of the connected car has led to a flurry of activity from players looking to cash in on the potential in-car commerce location. New Jaguar owners in the UK can use their car’s touchscreen to pay for fuel in Shell service stations, Honda are testing a system to allow drivers to pay for fuel and parking from the driver’s seat, in collaboration with Visa as well as smart parking metre and gas pump manufacturers.
In 2017, Ford announced it would integrate with Amazon’s Alexa to allow owners to direct in-car navigation, control their smart home and place orders on Amazon by human voice.
Laundry Room: New ways for consumers to interact with appliances, including remote monitoring, product replenishment and automating ordering process. GE Appliances, which controls 17% of the major appliances market in the US, integrated its connected appliances with the Amazon Dash Replenishment Service.
US consumers spent US$8 billion on automatic detergents and US$2 billion on fabric softeners – two replenishment products where purchase is likely to be automated in the smart home era.
There is no way to spell “retail” without AI. Commerce players are being reminded daily that their future is intertwined with artificial intelligence. To put AI’s rise into perspective, look at the below numbers:
- 58 mn - Number of wireless speakers, like Amazon Echo, sold globally in 2016.
- 7,000 -Number of skills on Amazon’s Alexa voice platform.
- 7.5 bn - Global population and number of people who expect a 1:1 experience.
How will AI transform tomorrow’s commerce experience?
- Empowering store associates. (autonomous robots have the ability to greet consumers and guide them around the store, source product info and aid inventory management.)
- Enabling more powerful search. (leveraging machine learning software can automatically tag, organize and visually search content by labelling features of image or video)
- Improving recommendations. (brands can more intelligently comb through data to better predict consumer behaviour and offer recommendations that are tied to those individual consumers).
A NEW COMMERCE REALITY
Virtual and augmented reality technologies offer an escape from everyday life and in time could pave the way to a new commerce reality for end-consumers. Seven million VR/AR headsets units were sold globally in 2016.
Several forward looking beauty brands have recognised the importance augmented reality is going to play in future beauty product shopping. Beauty specialist Sephora leverages AR to allow beauty enthusiasts to see what they might look like with different shades of lipsticks or types of eyelashes.
Rimmel London, which is owned by US-based Coty Inc, released an AR-inspired app called “Steal the Look” to enable users to mimic their favourite looks from friends or celebrities.
Expedia, which is the leading travel intermediary with 9% of share globally, has been investing in this technology to woo younger travellers. Expedia, which invested more than $1 billion in its technology in 2016, is also looking at incorporating voice like Amazon’s Echo into the booking experience.
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