As free shipping and returns become table stakes, providing a path for customers to opt-out of expensive policies may open an avenue to profits
Last year, total merchandise returns accounted for $369 billion in lost sales for retailers across the U.S. And, of the returns made annually, at least 30% of those purchases were made online. As the number of online shoppers continues to rise, at an estimated 224 million in 2019, returns remain a point of tension in the relationship between a brand and its customers.
If a brand offered you a $3 in-cart discount in exchange for slower (5-7 days) shipping or a $10 discount subject to no returns, would you accept? We bet more companies will be experimenting with this.
2.
The next Amazon competitor is likely going to look like a social or video app, not a shopping app
Shopping is fun in real life. You can go with friends, treasure hunt for bargains, discover new products, better understand a brand’s vibe, ask store reps questions, and also touch and feel items so you have more confidence you’re going to love it.
The shopping revolution will combine ecommerce and entertainment, where both are equal in importance.
For Amazon to fight against this shopping revolution, it's going to need to change from a text-centric, search driven platform to one that delivers on discovery -- users have to want to open the app without a specific intent to buy.
3.
Niches within formerly homogeneous categories will continue to be unearthed and examined
Digital has led to market fragmentation in nearly everything. Reduced opportunity costs have spawned a plethora of Direct to Consumer (DTC) brands which will continue for the foreseeable future. Small niche startups will continue to build followings and “tribes” in ways that couldn’t have been imagined in the pre-internet era.
4.
A new era of Phygital will rise to balance convenience and connection
Since the inception of eCommerce, we’ve watched an evolution from single-channel to multi-channel, to cross-channel, and on to omnichannel. This is evolving into a state of “unified commerce” that recognizes that the consumer does not think in terms of channels, but of brands.
On one hand, Amazon was rewriting the playbook based on a new level of convenience but missed out on connection. Brands are realizing they will need to balance both convenience and connection using phygital means.
5.
Voice interfaces will reshape commerce
Existing supply chains, marketing strategies, and brand systems are optimized for the screen-based way that we currently interact with the web. Companies that are not thinking ahead to the next platform shift will inevitably fall behind.
6.
The expectation of an in-person shopping experience will increase after the crisis
We will see the acceleration of technologies like autonomous checkout, curbside pickup, as well as the rise of appointment-based retail. These have the opportunity to earn major customer trust by putting their safety first and making retail a truly personalized experience
7.
Small businesses will rise back
Simple, portable payments solutions attached to major platforms, like Apple Pay, will reduce friction to a minimum. This in turn will empower small vendors to engage in commerce at the cost of the likes of Amazon, which still generally requires you to go to it to buy things.
Amazon will be tough to topple, but small businesses are going to find out that they can live without Amazon’s platform.
8.
Participating in commerce will become frictionless for creators
Large retailers with legacy infrastructure will struggle and lose market share to challenger brands and creators that are nimble, not locked into long term leases, and that are leveraging the power of social media and audience-first business models.
This presents new opportunities for SaaS and platform businesses that help creators do what they do best -- create.
