Thousands of shoppers across the UK are prepared to embrace the chilly temperatures, traffic jams, crowded transport and throngs of fellow shoppers on jam-packed high streets in order to snap up the bargains of Boxing Day and the January sales. However, more will be opting to shake off their Christmas Day over-indulgences by remaining snug and smug curled up on sofas (or even in bed) with laptops, tablets and mobiles charged up in search of the perfect deals online.

As the virtual shopping event of the year looms, we over here at eCommerce Expo have decided to take stock of the year that has passed and spare a thought for what we might expect of 2015. Some of the year’s online shopping highlights include Valentine’s Day when online sales rose by 21% in the week leading up to Valentine’s Day (7-13 February) year-on-year with spend from mobile sales increasing by 39%.*1 The latest US exports to the UK saw consumers spend £666m online on Cyber Monday which was superseded only by the £810m spent online on Black Friday (traditionally a post-Thanksgiving Day sales day) in 2014.*2 And while not a local event (yet), it would be remiss to not mention the day that blew the ecommerce industry out of the water. Singles Day, an Alibaba co-opted date (11 November) saw online sales of over £5bn in a single day in China.*3 Will the UK industry jump on the Singles Day band wagon in 2015? All indications point to a healthy and booming ecommerce economy – but that does not mean that we can afford to sit back and rest on our laurels. As we all know, customers are a fickle bunch and with our competitors hot on our heels, ready to lure away any straying loyalty, it is imperative that we remain ahead of our game. With such enthusiastic demand for our wares and services online, organisations face monumental challenges making it easy for customers to pay on their terms and keeping customer information and payment services secure, being able to deliver on demand, operating a number of channels seamlessly for a smooth sailing customer experience, getting to grips with how the mobile world is impacting and shaping browsing and buying habits, personalising the shopping experience and of course getting to grips with search. And if there is anything to be learned from such things as the recent Amazon 1p glitch*4, where a number of items went on sale for a penny, it is that we be vigilant and agile. With that in mind, what key trends should we be on the lookout for in 2015?

THE EXPERTS’ VIEW

We reached out to some of our keynotes from eCommerce Expo 2014 to ask for their opinions regarding all that has happened in 2014 and what they are anticipating on the horizon. This is what they told us:

In your opinion, what were the major events of 2014 to impact the ecommerce industry?

So many developments happen on the major platforms daily, it’s difficult to call out the major events, but we look to filter out the noise to help our readers find out the “need-to-know” changes each week, so I can call a few. Major events are often acquisitions and one of the biggest was when Facebook purchased Oculus Rift in March. We have already seen many examples of travel and fashion brands using the Rift for customer engagement, so this is one to keep an eye on in 2015 as it is launched. Updates to Google’s Penguin spam filter continued through 2015 with 3.0, 3.1, 3.2, 3.3 & 3.4 rolled out since the summer. The reality is that these could make a bigger difference to any business affected than a new social network feature. We also saw the ad-free social network Ello rise to prominence in September 2014. I was underwhelmed when I got my trial invite - it didn’t have much to offer users right away. It isn’t slick or user friendly. In general, the increasing growth of mobile and especially tablet usage amongst our prospective and existing customer base. The increased expectations of customers to be treated as individuals and to be recognised however and whenever they interact with us. For Financial Services the huge amount of change necessitated by government and regulator announcements – e.g. fees and charges on platforms, complete overhaul of pensions and at retirement market. The growing number of people priced out of advice and therefore the growth in the number of people needing to be educated and guided about financial services. Plus, the ever increasing rise of aggregators eroding margins. Black Friday and Cyber Monday finally made the transition across the Atlantic and established themselves as a vital part of the UK retail calendar - days which drove immense value to those online retailers who knew how to adapt their marketing to make the most of them.

What are the major challenges that the industry faces?

Integrating digital media and technology are still a huge challenge for many businesses. Looking at the initial analysis from our Managing Digital Marketing 2015 research with Technology for Marketing and Advertising event, we found that less than 20% of businesses rated their digital communications, customer communications or performance improvement processes at an advanced level. However, they are taking steps to improve their capabilities. When asked about managing digital transformation, again just 20% of businesses had a transformation programme in place, but 33% are planning to implement a programme within the next 12 months. Another related challenge highlighted from the research was integration. Only a quarter of companies (24%) were happy with their level of integration of digital marketing and traditional communications. The main barriers to integration are 1) lack of integrated strategy and plans (27%); and 2) teams structured in silos (23%) and lack of skills in integrated communications (17%) At a practical level we also found that many businesses are failing to deliver on the 360 degree customer view and customer lifecycle marketing, this means that many are not delivering the personalised communications that we have become familiar with from larger brands. How to deliver a personal service across multiple devices and contact centres whether on or off line, whilst at the same time ensuring absolute safety of customer data. Having a generic undifferentiated online offering is harder and harder to maintain - competition in all ecommerce verticals is huge, and marketing is becoming harder as consumers have ever more control over what they see and what messages they receive.

Do you have any advice for businesses facing these challenges?

Integrating digital marketing to the level they want to is a huge challenge for most businesses, so a planned approach where projects are prioritised and put on a roadmap is essential to avoid distractions from the latest hyped technology. We were surprised how few businesses have a plan for digital marketing - one half of businesses said they didn’t have one - this likely means they don’t have SMART objectives for their digital channels and are unable to track performance through dashboards in the way they should. So create a prioritised plan for digital defining how it will be integrated. It’s good to see that many people who completed our survey are looking to act, with one third of respondents planning to implement a digital transformation programme in 2015. We need to re-invent the way we do things, simply adding a few bits here and there won’t do – we need to look outside our industry or region to see what real innovations are coming along and how best we can leverage them. We need to move to a more agile build fast/fail fast and iterate attitude – whilst ensuring that none of the inevitable failures compromise customer date or confidence in us as a provider. The best new ecommerce businesses are data-driven technology companies, not simply retailers. They understand their customers entirely, they know exactly what those customers want and when they want it, and they ensure that their entire business is built around this understanding and the ability to act on it.

What do you expect the major trends and developments of 2015 to be?

Alongside more transformation projects ‘kicking off’, I expect to see more use of optimisation approaches for digital media, although we were surprised that use of the 7 digital optimisation techniques*10 we defined in the course didn’t increase greatly in 2014. In tools and techniques, I expect to see the more adoption of personalisation platforms outside of ecommerce for personalised content targeting. Of the platforms I don’t expect Ello or any other social network gain significant share, but do watch out for the continued growth of Instagram and Snapchat. Instagram just recently overtook Twitter in users, so consumer brands definitely need to think how to make full use of it to develop customer relationships*11. Increase in the traffic from smartphones and tablets. The continued need to be able to aggregate data from multiple legacy systems and provide as seamless and personal experience across on and offline as possible. The main trend in 2015 will be shifting from data to action. With the growing complexity in the communication between retailers and their customers, simply having data will not be enough. Automated systems and processes will be implemented by cutting edge ecommerce businesses, giving them a clear competitive differentiation in the eyes of the consumers.

DEVELOPMENTS AND TRENDS IN KEY AREAS OF ECOMMERCE PAYMENT AND SECURITY

Getting customers through checkout easily and securely on their mobile is definitely an area to focus energy on in 2015. It is expected that by the end of 2014, 78% of UK consumers will own a smartphone*5 and it is therefore very important that work is done on optimising mobile experiences in order to keep up with customer demand. During an interview at eCommerce Expo 2014, Rob Harper, Head of Retail & Hospitality Services at Paypal told us that “incredibly, 50% of consumers drop off of a mobile checkout process because they find it too difficult.”*6 Rob goes on to explain that during a traditional payment flow, there are about 150 taps that consumers have to make to get through the process, so an element to focus on could be to think about how to reduce the tap journey for your customer. With 2016 set to be the year that the mobile replaces the wallet for transactional purposes, Rob recommends that 2015 be all about working on delivering capability for customers in order to reach that 2016 date.

EDELIVERY – LOGISTICS AND FULFILMENT

To discuss the operational nightmare that can be getting purchases to customers, we reached out to James Hyde, Operations Director at James and James Fulfilment. Here’s what he told us:

In your opinion, what is the biggest let down for customers regarding fulfilment and delivery of online orders and why is it happening?

Unquestionably, it is getting the wrong product delivered. Late delivery is a huge pain but that is nothing compared to not delivering the item the customer paid for. For the customer, it means the huge hassle of returning items, arranging a collection, waiting in for a carrier, etc. You have just ruined someone’s day and at this time of year it can mean ruining someone’s Christmas as well. The process might seem very simple, and it is: Product A, B and C need to go in order D. However, when you scale this up to thousands of orders per day it becomes a logistical nightmare.

What are the major challenges for online businesses in this area?

While some online stores sell large quantities of just one or two products, others have a catalogue stretching to several thousand. There is no right number of SKUs to have of course, but there are some who have too many. Clearly if you have more lines, you’ll need to keep more inventory which equals more capital investment. If you assume a 10% cost of capital (what the bank will charge you for a loan, or what you could make with the cash elsewhere) then the cost of holding £10,000 more stock is £1,000 a year. So to justify the additional lines on this value alone retailers need to make an additional £1,000 more profit after tax (not just £1,000 more income) to break even. This might be £4,000-10,000 in turnover for most businesses. Retailers also need more space to store the inventory, and to invest more capital again in shelving and racking to hold it. The cost of storage can vary from free (back bedroom) to cheap (sub-urban warehouse) to expensive (city centre store). Other costs include the overheads which are very hard to apportion, but from experience they can be substantial: managing the inventory levels and producing orders, managing more suppliers, time spent stock counting, time spent looking for items! The greater the number of lines retailers have, the harder it will be to pick and pack orders accurately without increasingly sophisticated software.

What do you expect the major trends and developments of 2015 to be?

Cloud technology driven outsourced fulfilment! Greater visibility of warehouse processes for the end customer. They will be able to see the order’s journey from payment confirmation to delivery at the door online in one place, live. Every aspect of the customer experience, from shopping cart to receipt of product, is vital to the success and growth of the internet retailer. Therefore, fulfilment companies will need to grow and evolve in their abilities to provide more customised, unique, and creative fulfilment experiences with end users. Of all of the potential areas for growth and change within the industry, this arena provides the most competitive advantage for smaller and nimble fulfilment firms. They have the ability to tailor the fulfilment experience to the specific needs of each client, not necessarily requiring their clients to ‘fit into a box.’ Nonetheless, more and more pressure will be placed on fulfilment companies to customise packaging, inserts, follow up correspondence, and other ‘touches’ within the process to personalise the experience and set the stage for future sales, repeat business, and referral business. Fulfilment companies won’t be looked at as a source to ship a product. Rather, they’ll be viewed as a partner that can help increase sales for their customers.

MULTI-CHANNEL, OMNI-CHANNEL AND CUSTOMER EXPERIENCE

David Bowen, Product Manager at EPiServer spoke to us about the developments, challenges and 2015 trends for the ecommerce industry in terms of multi-channel, Omni-channel and the customer experience. Unifying content and commerce, being aware of the direct from manufacturer to consumer trend and being available on your customers’ terms are his key messages.

Are multi-channel and Omni-channel still just the latest buzz terms or have they moved into being an integral part of the customer experience?

Multi- and Omni-channel have definitely moved beyond the hype and established themselves as an integral part of the customer experience in the past couple of years. As new technology becomes available customers are changing the way they shop and engage with brands at a rapid pace. Just look at how quickly mobile/tablet and services like ‘clickand-collect’ have grown from ‘nice to haves’ to ‘must haves’. Take the Black Friday sales record this year as an example – mobile traffic accounted for 60% of all online traffic, surpassing desktop and recording an increase of a whopping 30% over last year. But in terms of sales, 53% bought from desktop, 23% from tablet and 24% from mobile*7. In addition, the battle of click-and-collect and lockers are key in winning customers who want to get their hands on their new purchases faster than ever, validating the important role multi- and Omni-channel plays in consumers’ online shopping journey which retailers cannot afford to ignore.

And how important are they to customer experience?

They have empowered a new breed of consumers called ‘connected customers’. Customers are now hyper-connected with multiple devices from desktop, mobile, tablet to wearable technology. They are always-on, social and in full control of the shopping journey. The traditional funnel or AIDA model is dead and customers are on a continuous, non-linear path-to-purchase. Brands now need to attract, engage and delight their customers anytime and anywhere with the right content that speaks to the customer as an individual. So it’s really about context and the ability to personalise customer communications across multiple touch points.

What are the major challenges within multi- and Omnichannel?

The biggest challenges to multi- and Omni-channel lies in the lack of data integration and a consolidated view of a company’s digital marketing ecosystem. Marketers are still struggling with siloed technology platforms that don’t talk to each other. The building blocks are typically there with CMS, ecommerce platform, CRM, and other digital marketing tools such as search, email, social media, optimisation and advanced analytics. But the problem is these tools and platforms are rarely used to their full extent with the right integrations. They need to be integrated via APIs and connected so the customer data can be shared, analysed, and most importantly, acted upon across platforms. Without a single customer view and the right technology infrastructure to enable the customer data to travel across platforms, it’s difficult for companies to understand what content is needed and when to deliver a truly personalised experience.

Were there any major developments for multi- and Omnichannel in 2014?

Apart from mobile and in-store/delivery services mentioned above, we are seeing a steady rise of the content + commerce trend and manufacturers/distributors selling direct to consumer (DTC). Unifying content and commerce: according to Forrester, marketing and e-commerce groups often operate in silos with differing objectives leading to a poorly integrated digital experience for their customers. Our latest research shows a surge in retailers such as M&S, Mr. Porter, Schuh and Lovehoney increasingly focusing on creating and integrating content into ecommerce journeys. Some of these retailers are very content heavy; they look like a news magazine with a series of articles and advice that is interesting to the consumers but not solely about the product. So they are using things like style guides and trends to create content that really adds value to the customer experience. Direct-to-consumer: As the content and commerce trend continues, manufacturers and distributors are now choosing to sell Direct to Consumer (DTC)*8. Take Lenovo, Dyson and Canon for example, these manufacturers are increasingly opting to run their own Black Friday sales on their websites, challenging their traditional distribution channels such as John Lewis, Currys and Argos.

Why does this matter?

It creates problems for traditional retailers or distributors because those brands are going to start selling DTC and more often than not, the consumer trusts the brand more than the retailer. People who are selling someone else’s product need to think about how to differentiate themselves and keep their consumer in their consideration set.

What do you expect the major trends and developments of 2015 to be?

The content and commerce trend will continue to gain traction. Ecommerce companies have to begin to think of themselves as a publisher. They have to create content about how products are used and why this product is interesting to engage with, rather than just the hard sell. It’s not just features and functions, or, product specifications and a picture, it is content that “romances” the customer into buying that particular product. Early adopters of this approach will be leading the game in terms of brand affinity and customer loyalty, as in the increasingly competitive online landscape, there’s a need to engage customers and build trust well ahead of a sale to ensure success and reduce price sensitivity (compete solely on price).

LOCALISATION AND INTERNATIONALISATION

At eCommerce Expo 2014, Julian Wallis, Head of Sales at Ingencio Payment Services and Sarah Francis, Compliance Director at PPRO Finance spoke to our delegates about smart strategies for expanding ecommerce business across borders and meeting the challenges of international ecommerce, especially with regards to mcommerce and payment methods. With so many options globally, UK merchants should look overseas to find successful methods in modern ecommerce and to lower the rate of cart abandonment said Julian. “Many merchants believe they are already international in their outlook but are they really maximising opportunities?” He believes not and he urged merchants to “think about the last few steps” in the transactions chain. The rapid rise of mobile ecommerce across Europe and particularly Southern and Eastern Europe was not matched by the UK where credit cards were still the preferred method of payment. Think outside the credit card box he said, before adding that “there are 150 plus methods of payment and you have to think about who you are looking to target and what payment methods are popular in their particular country or region.” Understanding and adopting localised trends and preferences is key according to Julian, a sentiment that was echoed by Sarah. Europe has “250 million e-shoppers, but we have to ask, what is Europe?” She pointed out how Europe had 36 different currencies, 23 official EU languages and several different alphabets. “So think about whether or not they have a different payment culture”, she added. Italy was said to be a cash focused culture when it came to payment with Spain and Turkey very card centric. Sarah pointed out the example of the Netherlands where only 16.1% of people used card to pay online, with Germany at 21% and Poland just 9%. Language is also a consideration with sites offering more language options which provides customers with “much more confidence that they were paying safely,” said Julian. He believed that the lack of more localised options meant a greater number of hurdles for customers to overcome in order to purchase. “The more you can bring down steps the more likely customers will stay,” he added.

PERSONALISATION

Personalisation is definitely an interesting one for 2015. The value of getting it right is unquestionable, but most organisations will be struggling with the how to do so. Steven Shaw, Digital Director at Branded3 offers some practical tips, great examples and of course what we can expect in 2015.

Where do you think UK online brands are on the curve of the personalisation trend?

UK brands are just starting out on the curve of personalisation as the technology to plan and implement this becomes more widely available. Ecommerce brands are leading the way in personalisation as product recommendations, up-sell and cross-sell opportunities based on user behaviour are widely being demanded as standard.

What are the major challenges online brands face getting this right?

The major challenges in getting personalisation right is either in planning the right strategy using the tools available or trying to implement an overly complicated strategy without covering the basics. In order to provide meaningful personalisation there is an overhead in resource requirements to create the various different versions of the content.

What were the best examples of personalisation for you in 2014?

Amazon is still providing great personalisation experiences and is accepted as the leader in the ecommerce space at providing data-driven personalisation. Sitecore powered sites have been providing some great experiences in the past year, including Manchester City FC, EasyJet and our own client Inchcape Automotive are starting to deliver more personalised experiences.

Will it remain important in 2015?

Personalisation will continue to grow in 2015 as web visitors increasingly become aware of giving both implicit and explicit information and expect this to be used in the same way as it would offline. This is an evolution of B2B and B2C systems to more H2H (Human to Human) where we exchange information in return for relevant and engaging experiences and this is certainly true in consumer-facing and brand experiences.

What do you expect the major trends and developments of 2015 to be?

In terms of personalisation, I expect the major trends to be focused on provided more connected experiences across multi-channel marketing. The combination of email marketing, mobile messaging, social and video experiences all being driven by behavioral and preference based data will be the key to successful campaigns.

SEARCH

Stephen Kenwright, Head of Search at Branded3 shared his very insightful views about the status quo of search and what he thinks 2015 will be. Leaning heavily in favour of SEO, he suggests what we should be on the lookout for.

What were the major developments for search in 2014 and how did these impact online brands?

2014 was the first year in a while where algorithm updates didn’t make the headlines. There have been very few noteworthy manual links penalties since Q1 too. The biggest shift for Google in my opinion was retiring Authorship, which has/will continue to decrease brands’ investment in Google+. It’s all part of Google’s “mobile first” initiative which should have seen everyone getting on board with mobile now, or risk starting to become obsolete in 2015. The other key event for us was Searchmetrics’ Ranking Factors 2014*9 study, which goes some way to affirming what we’ve been saying for the last couple of years: engagement is now the most significant ranking factor.

PPC or organic SEO? Where are budgets and resources better spent?

Organic SEO is, in my opinion, a better use of budget, simply because SEO benefits so much from many of the other things you’re doing. Get a new site design and it might increase your conversion rate from paid and reduce your costs, but it will benefit SEO too. For the most part we work with businesses that spend a lot more on PPC each month than they do on SEO, but often get more visitors from organic search.

What do you think are the major challenges for online brands to get this right?

The major challenges for SEO in the coming years will differ massively depending on what kind of brand you are. Huge businesses – the ones who have always ranked by virtue of being popular and spending more above the line – will slow in search because they often struggle to get things done. Developer queues impact SEO because sites look out of date, slow down and stop performing. If this looks like you… be prepared to pay Google to keep up. Despite this, Google still wants to rank brands that people know and care about. TV has a massively understated effect on organic search. Expect medium to large companies with a digital heritage to start taking over from high street behemoths in the coming years unless they can become more agile.

If organisations can find the budget to invest in one major thing in 2015, what do you think it should be?

I would love to see more investment in user/customer experience. If there’s one thing that will benefit every area of the business (and SEO especially) it’s reducing bounce rate, increasing engagement and creating a website that customers actually like to use.

What do you expect the major trends and developments of 2015 to be?

More video and more investment in photography for ecommerce sites. Personalisation and automation in ecommerce will likely be areas of interest, but I doubt that more than a couple of companies will really get this right next year. Google will roll out its Pigeon update in the UK and ecommerce brands with physical stores will have to invest in their location pages.