E-commerce is a lot like Game of Thrones — several contenders fighting for the consumer’s share of mind, along with many to partner and align with. These contenders Scot is speaking of are Alibaba, Amazon, Apple, eBay, Google and Facebook. But who’s going to win the Iron Throne of E-Commerce?
If you look at them from a GMV perspective, Alibaba is the clear leader here with $363 billion in GMV — which is more GMV than eBay and Amazon combined. The winner from a revenue perspective is Apple, driven by its $183 billion hardware business. And usage? Consumers are spending the majority of the time with Facebook.
But who should you align with on the battlefield?
The e-commerce battlefield is drawn by five trends in consumer behavior: mobile, social, zero friction, value and cross-border trade.The winning contender needs to provide consumers (let’s not forget millennials) with value and convenience. Let’s see how each player stacks up.
Trend #1: Mobile
Currently, traditional retail stores make up 91% of US commerce. E-commerce makes up the last 9% with desktop at 8% and mobile at 1% — meaning, there’s a lot of room for growth. And mobile is driving this growth opportunity. Consumers are mainly interacting with retailers via mobile devices. In fact, traffic to retailer sites is at a peak with ⅔ of total traffic coming from smartphones or tablets.
To reach consumers, your site has to be mobile-friendly. Retailers are spending millions of dollars on mobile apps, but studies show that most mobile traffic comes through the browser.
Amazon and eBay are clear marketplace leaders in the mobile space and Google is reportedly working on a marketplace. Alibaba is making huge investments in mobile with its $200 million Snapchat funding. We can’t forget Facebook. The social giant has has 1.4 billion users and 80% of those users are coming to the site from mobile.
Trend #2: Social
Mobile and social go hand in hand, both complementing and amplifying one another. A recent study shows that people look at their smartphone 150 times a day! And the majority of that time is spent within apps — social apps.
But people aren’t just socializing, they’re shopping too. Facebook, Twitter and Pinterest drove nearly $3.3 billion in 2014. Let’s not forget Twitter, Facebook and Pinterest’s buy buttons in the works. Flash sale type of models with limited quantity work best for these type of channels.
The bulk of social activity used to be picture sharing, now it’s transitioned to messaging — with millennials leading this trend. Messaging app usage is through the roof with 40% of US mobile users using messaging at least once a month. Hmm, a coincidence that Facebook paid $19 billion for WhatsApp and hired a PayPal executive to run Messenger? We think not.
E-Commerce is being infused into chat. Alibaba’s pushing its messaging app Tango and recently raised $200M for Snapchat. But Tencent’s WeChat and QQ have a combined total of 1 billion users — more than 5X Snapchat. In fact, 22% of WeChat’s audience use the app to find products.
Trend #3: Zero Friction
Consumers are trained now to look for convenience. Just look at Uber. There are more Uber drivers in New York than taxis. Mobile is the intersection of convenience — and consumers are wanting products and services faster and faster.
The key to enabling this technology is payment solutions. Apple has dominated this field with Apple Pay.The contenders that have the most global credit cards set up on file are the ones set up to win.
Delivery is the next expectation in this “Uberfication” of consumer wants. Amazon is investing millions in this with Amazon Prime, same-day delivery in many cities, drone usage and over 155 fulfillment centers around the world.
Buy online and pick up in store is also popular among many brick and mortar retailers including Kohls, Sears, Nordstrom’s and Macy’s. If you’re a retailer without BOPUS, you’re falling behind the zero friction aspect.
Big data and the ability to predict consumer’s needs will drive the future of this trend.
Trend 4: Value
There’s a couple different flavors of value: daily deal sites (Groupon), flash sites (Zulily), subscription (Dollar Shave Club), and loyalty (Amazon Prime).
A new marketplace that especially understands the loyalty component is Jet.com. If you’re not at Catalyst, you’re missing out on Scot’s live interview with Jet CEO Marc Lore. No worries, catch up on the hot new marketplace with Scot’s recent blog post.
Trend 5: Cross-Border Trade (CBT)
Today’s consumer wants instant gratification — they don’t want to wait for products. The online population that’s willing to buy cross-border is expected to be 130 million by 2018 spend and is $370 billion. It’s a win for retailers because CBT is helping expose your products to fast growing regions.
Many marketplaces are especially aggressive with CBT. EBay has its global shipping program and 26% of eBay listings are available to ship worldwide. Even though Amazon is quiet about CBT, we do know the marketplace sells 2 billion items worldwide. Alibaba’s CBT marketplace is called Aliexpress and is the top shopping site in Russia and Brazil.
E-commerce is predicted to be $1.6 trillion by 2018. Consumers are changing this behavior. Mobile is on a huge rise. Social is widely popular. Value is a huge driver. And CBT is a huge opportunity. So you should you make alliances with? Let ChannelAdvisor help you decide.
ChannelAdvisor supports Houzz, Wanelo, Pinterest and Polyvore. We recently partnered with Facebook to send data feeds to produce two types of heavily targeted ad units. With ChannelAdvisor, you also have the option to have your consumers buy directly from branded manufacturers with our Where to Buy technology. (Sales pitch over!)
Now enjoy the e-commerce revolution!
Blog post by Jordan Nowlin, social media and blog manager, ChannelAdvisor