This week is the 2016 Internet Retailer Conference and Expo (IRCE) in Chicago – probably the most important gathering of the retail and e-commerce industry. This year’s conference convenes in the midst of disruptive changes that are transforming how companies and brands reach customers and conduct their e-commerce business. Let’s take a look at just a few of the biggest industry shifts:
- Just last week Salesforce.com announced their acquisition of Demandware.
- eBay has rebranded eBay Enterprise as its own company called Radial.
- Last year, Oracle released Oracle Commerce Cloud which takes the most powerful features of the industry leading Oracle Commerce with its ATG and Endeca foundations and made it available in an always up-to-date cloud platform.
But those are just on the platform and software side. What about on the consumer side? What trends are most important for us to pay attention to?
It is timely that the Code Conference was last week and Mary Meeker of Kleiner Perkins Caufield & Byers presented her annual Internet Trends Report. While each year’s report is always full of important nuggets for internet marketers to remember, this year’s report highlights trends that are especially important for internet retailers and and e-commerce marketers to consider.
Global Economic Growth is Slowing
Yes, this isn’t specifically an internet trend but it shapes the internet and online commerce.
Globally, we are seeing lower than average GDP and growth is starting to slow in some of the largest economies including China. We are also seeing a decline in commodity prices and interest rates, which all indicate the global outlook on the market potential. We are also seeing other trends that shape the economy including increased debt and the lack of population growth in some key markets.
However, there is a bright spot and opportunity in this shift.
As Oracle CEO Mark Hurd has repeatedly pointed out, when revenue growth stalls the only way for earnings to grow is through cost cutting. And although IT spending has been declining worldwide, the push is on to move resources to the cloud so IT can focus and grow the core business rather than spending time and resources on running old infrastructure.
Against this backdrop Mary Meeker points out that the days of easy corporate growth are behind us. But this is where nimble, disruptive internet companies can make their mark and transform their businesses and industries.
We are in the Midst of a Generational Shift
You’ve heard it before but just in case… “The Millennials are coming!!!”
Mary Meeker points out that millennials now count for 27% of the population in the United States and are reshaping everything they touch. Thanks to this generation, everything is being transformed from the ways companies go to market (more on that later) to media consumption (have you tried Facebook Live or watched a Snapchat video) to how they communicate directly (the phone is dead… long live messaging. Check out slides 97 through 107 of her presentation for more details).
And don’t forget – Millennials’ spending power is only going to grow as they evolve in their careers and have more disposable income.
These shifts are driving how Millennials (and the rest of us) consume media and our expectations for the brands and companies we buy products and services from.
Brands and Commerce Are Rapidly Morphing in this New Mixed up World.
Mary says it best in her presentation:
Products become brands, brands become retailers, and retailers are becoming products and brands.
Need proof? Look at some of the hottest e-commerce brands out there:
- Casper found a new way to build a different type of mattress and have built a unique brand promise along with a great product. Products become brands.
- Warby Parker started with the promise of affordable, fashionable eyewear. Now they are opening their own stores in addition to samples they ship to your home to try on. Brands become retailers.
- Amazon is rolling out their own private label products for everything from diapers to groceries. Retailers become products.
The foundation of this shift is data that these companies and brands have about their customers. For example, if you stop and realize that Stitch Fix is really the “Netflix of clothes,” you can quickly understand how customer data drives sales. So much that their CEO reports that 100% of their sales are driven by recommendations.
So what is one to take away from all of this and think about as we start IRCE 2016?
Start by looking for efficiency. If global growth is declining, marketers and retailers need to look for ways to maximize your IT investment and realize cost savings through technology and services that allow you to focus on your core competency and leverage partners’ expertise and economies of scale.
Consider what modern engagement means and select platforms that will grow to meet those new challenges. Your next customers are engaging in ways you never thought of. As you consider new business tools, look for platforms that will grow with market changes and offer new, innovative solutions to engage customers wherever they are.
Don’t be afraid to rethink business models and implement technology that helps you do that. As competition shifts around you, you are bound to ask questions about your business model and how you deliver. Are you a brand to product? Or a product to brand? Or something else? The key will be technology and partners that understand those shifts and help you navigate the waters.
It’s sure to be an exciting week as we consider these trends and we reconnect with partners, clients and colleagues for invigorating discussion. Because in a world where change is constant, you can see how the timing of IRCE is the perfect opportunity to address these trends and chart a path forward.
What do you think? Do you have a different opinion? Be sure to visit McFadyen Solutions at booth 1707 in the Expo Hall at the 2016 Internet Retailer Conference and Expo to share your thoughts.
For more of Mary Meeker’s presentation, be sure to check out her original slides and the video of her presentation.
View the original Slides: 2016 Internet Trends – Mary Meeker, KPCB
Video: Internet trends report; Mary Meeker, KPCB; Code Conference 2016