By Auni Sen, executive creative director, FP7 McCann Dubai
A discussion on self-driving cars or drones rarely starts with how people and goods were carried on horseback and wheeled carts, yet when there’s a discussion on electronic trade or e-commerce it usually starts with the glorious days of bricks-and-mortar stores.
That’s not because e-commerce has, in the words of Don Draper, “the itch of new”. In fact, the first online company, Boston Computer Exchange, was launched in 1982 and the term e-commerce was coined way back in 1984. It has evolved rapidly and continues to do so.
However, despite the evolution from physical stores to websites to apps and to social media, it hasn’t been a complete transition. Physical stores still exist but most are there more as legacy systems and some to support online trade, rather than the other way round.
Within the last 12 months alone, we’ve seen the pre-launch of Facebook’s metaverse, the launch of Amazon’s contactless payment system, Musk’s Neuralinks demos with monkeys playing video games, and virtual influencers like Qai Qai and Lil Miquela gaining massive social media followings.
It’s hard to keep up with these technological advances but what’s even harder is to predict consumer trends. Consumers today are more promiscuous than ever before. A recent Forbes article found only 37 per cent of Gen Z fall into the ‘loyalists’ category of shoppers, compared with 56 per cent of boomers.
One of the reasons for this lack of brand loyalty is the convenience to switch to a brand that offers better price or better matches a consumer’s values. Even after the purchase, a product can be returned easily, creating a whole new challenge for retailers. In America, 21 per cent of online orders, worth approximately $218bn, were returned in 2021, according to the National Retail Federation, up from 18 per cent in 2020. The primary reason for this was that online traders started offering free returns to compete with the bricks-and-mortar establishments. Shoppers came to expect this, and the lockdowns helped them get used to the otherwise tedious process of repacking and labelling and shipping orders back. Retailers are experimenting with virtual reality to allow users to try on shoes and glasses before buying them as a way to cut down on increasing returns. This opens up a whole new space for marketing innovation.
Another emerging trend to watch out for is virtual influencers. Gone are the days when shoppers would rely on celebrity endorsements. Even influencers with massive social media followings seem to be losing ground to microinfluencers. In the blink of an eye, they soon could be replaced, or at worst forced to share space with virtual ones.
Innovation in financial technology is also shaking up the world of e-commerce. Due to the ubiquity of smartphones in the region, there’s already a surge in contactless payments. ‘Buy now pay later’ services are becoming increasingly popular. From blockchain to cryptocurrencies, from NFC to NFTs, opportunities are rife. Demystifying and understanding these technologies will certainly help businesses gain an edge over their competitors.
There has also been a paradigm shift in the way the whole industry is shaped. There are no more boundaries when it comes to business offerings. Visa exclusively for payments, Amazon for shopping, Facebook for social media and Google for information is no longer the norm. The silos in which these businesses have traditionally operated are being broken down as they diversify. Consumers can now go to Facebook for shopping and Amazon Prime for entertainment.
The marketplace is faced with impending seismic changes. But, more importantly, seismic changes that can strike without warning. All we as marketers and ad people can do is be prepared.
