Sting has had quite the celebrated career. He resides in the Rock Hall of Fame, has won Grammy Awards, Ivor Novellos and American Music Awards. If that wasn’t enough, his song ‘Every Breath You Take’ is the most requested song of all time by radio listeners. Yet, amongst the hoard of accolades in his trophy cabinet there is one achievement that not many people would be aware of. His album ‘Ten Summoner’s Tales’ was the first secure online purchase and last week we celebrated the 20th anniversary of this purchase.
How times have changed
Since that first momentous sale on the 11th August 1994, Internet usage has sky rocketed. In 1995 it was estimated that 16 million people globally used the Internet. That figure now is estimated to be an astonishing 2.94 billion people. What’s more incredible is that of those, 80% have used the Internet to make a purchase with 50% having shopped online more than once. How many of these purchases were from the back catalogue of Sting, we can only speculate, but one thing is for sure, the next 20 years are going to be exciting for retail. So, what can we expect in the coming years?
Online and offline will converge
While shopping online and in-store (offline) is relatively siloed at present, this is certain to change. Bricks-and-mortar stores will become more integrated with their respective online portals, and the two will work much more in tandem creating ‘connected’ stores. At the heart of this will be mobile devices. Today, almost four in 10 visits to retail websites are done through a mobile device and they account for 27% of the UK e-retail market, amounting to over £3billion in sales.
The trend towards mobile is set to continue apace and will take the lion’s share from laptops and PCs. The writing is already on the wall as a global survey showed that while 81.8% of shoppers this year still look to the PC to buy online, this is down from 83.2% in 2013.
Personal mobile devices will become key to the in-store experience too. Payments through mobile wallets, via NFC, will become commonplace and loyalty cards will also be housed inside phones, giving customers one place to go for collecting their much-loved reward points and coupons.
Building an emotional connection
With e-commerce comes a wealth of new data. Retailers will be able to use this to build accurate and holistic profiles of their customers, creating a much better understanding of each individual’s needs and preferences. They will be able to digitise, optimise and personalise their customers’ loyalty experiences thus creating a highly personalised dialogue. This will be targeted to individual customers which will improve the customer experience, boost loyalty and yield positive results in terms of sales. Furthermore this could well move into the ‘connected’ store space – with mobiles at the heart of the engagement. It gives retailers the opportunity to provide rich content to aid the sales process. Whether this is through NFC/QR codes in the aisles or the Mobile Point of Sale, the mobile device has the potential to become a great enabler of sales through the collection and use of relevant and targeted information.
Securing the retail future
As more and more customers decide to shop online or in ‘connected’ stores, customers will become even more conscious about how their data is stored and by whom. For retailers this will be crucial.
Of the multiple data breaches we have seen in the past years, from such retailers as Target and Office, it can do serious financial as well as reputational damage. Whether it is card data from a transaction, or the housing of personal customer data used for loyalty purposes, retailers will have to ensure they can secure customer data. In this sense, some things will never change; security will remain the linchpin of e-commerce. Consumers may become more comfortable with purchasing via mobile devices and engaging with brands online, but if they don’t feel a retailer can be trusted, they won’t give them their custom.
Some things never change
For customers and retailers the next twenty years will be very interesting. Technology moves so fast that it’s impossible to predict with 100% accuracy what the future will look like (how many people truly saw the iPhone coming?) yet we can make some calculated assumptions.
As the distinction between digital and physical becomes blurred, mobile devices will become central to retail: the connectivity and customer data they provide shaping the way we buy things in the future. For the consumer, their phone will be indivisible from their shopping experience while for retailers it will open up a new world of customer interaction. One thing is for sure though: if e-commerce is to continue on its upward trajectory, retailers must ensure the security of its customers’ payment data otherwise customers may start to lose their faith.
By Ben Gale, VP of The Logic Group.
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