Where will the eCommerce train take us?


Submitted by Lori.Montgomery - February 09, 2018

Of all the super powers in the universe, I’d choose the ability to predict the future. Or, if someone wants to go ahead and invent a crystal ball, I’ll be the first investor on Kickstarter. Predicting the future in business is hard enough, but predicting where this high-speed eCommerce train will take us is nearly impossible, says David Reinkemeyer, VP of Business Development at DM Fulfillment. We all have ideas of what might happen next, and we do our best to anticipate and plan for change, but it’s a constant state of evolution ultimately driven by consumers.

Businesses whose fate rests in the hands of eCommerce have to be progressive, proactive and have the technology and innovation to react quickly to change. Manufacturers, merchants, retailers and all the 3rd party providers along the supply chain are joining forces to take on their biggest challenge – consumer expectations. “Amazon set the bar for high expectations beginning in the late 90s, and they’ve been leading the charge for most of the change in eCommerce ever since,” says Reinkemeyer. “It’s just a reality we have to embrace. All 3rd party providers are working hard to offer services and technologies to address their customers’ needs while keeping up with consumer expectations and trends.”

The value-driven consumer has always approached shopping as a game of strategy versus convenience, but whether we seek value, convenience or both, mobile devices have changed the game. With 77% of American adults owning smartphones, and more than half of them making purchases via those smartphones (Pew Research, June 2017), we’re seeing a rise in the number of savvy, integrated shoppers. They’re on-the-go and using numerous online data points via mobile devices to find what they want, at a price they’re willing to pay, in a timeframe that works for them. The trend is pushing responsive web design, webrooming and showrooming to new levels.

“Integrated shoppers expect to be able to toggle between the in-store and on-line shopping experience seamlessly,” says Reinkemeyer. If they choose webrooming – researching online before purchasing in-store, or showrooming – seeing in-store then purchasing cheaper online, their expectation is that the information both in-store and on-line is the same and accurate. “What that means for online sellers and retailers is that content is king. Product descriptions and photography are so crucial. What it means for fulfillment providers like us is that our inventory processes and data integration have to be flawless. Our investment in the people and resources responsible for these processes will continue to be of utmost importance.”

Millennial shoppers, on the other hand, seem to be motivated by convenience more than value. Subscription-based eCommerce came on the scene with Birchbox in 2010 offering not only convenience but personalization. “Obviously, ‘subscription’ is not a new concept. Clark Griswold was a member of the Jelly of the Month club in the late 80s, but now you have eCommerce technology and social media making it an easily marketable and viable selling channel for a variety of products from health and beauty to toys,” says Reinkemeyer.

Bigger retailers are jumping on board with subscriptions for replenishing daily household needs while other retailers and online merchants are seeking targeted markets with the lure of surprise, discovery and try & buy concepts. “The predictable, recurring revenue of subscriptions is a win for both e-tail and retail businesses, but they can’t lose sight of how their subscription model impacts the entire supply chain. The upfront profit might be lost in back-end expenses,” according to Reinkemeyer. For example, a monthly, themed box of goodies that renews at the beginning of each month for all subscribers could put a strain on fulfillment operations. Additionally, if the subscription offers a more personalized approach where the consumer has some level of control over the items they receive, you’ll need to invest in technology to manage or have a cost-effective process for kitting individual items.

As with most things, the consumer mindset and behaviors across generations varies. Millennials grew up in the age of Amazon, high-speed internet and instant gratification. They are very comfortable with this idea of tangible products in an intangible world. Gen X’ers and Baby Boomers, who still use check books and remember the sound of dial-up, tend to proceed more with caution. Now that the number of Millennials has surpassed the Baby Boomer population, (Pew Research, April 2016) and Generation Z is coming into adulthood, all of us within the supply chain making our living in eCommerce need to be sure we’re tapping into the brains and behaviors of our younger counterparts, because they are the ones truly driving this train, creating the trends and taking us into the future.