2017 Trends That Will Disrupt Your eCommerce Business
Head of Global Insights
Head of Product Strategy
Managing Director, APAC
The ecommerce channel continued its rapid growth in 2016. With overall sales and the channel’s influence on in-store purchases growing, brands that have a solid understanding of emerging trends and best practices will be poised to improve their performance on the digital shelf in 2017.
Listen to this on-demand webinar where Clavis Insight’s Head of Global Insights, John Neilson, Head of Product Strategy, Danny Silverman, and APAC Managing Director, Declan Kearney take a look back at the major ecommerce trends that disrupted 2016 and what brands can expect in 2017.
During the recording, John and Danny discuss:
- The most disruptive ecommerce trends that surfaced in 2016
- Chinese ecommerce trends that will make their way west
- Predictions for 2017 – themes and trends that will disrupt manufacturer ecommerce businesses
- How brands can best optimize their presence on the digital shelf to drive online and offline sales in 2017
John Neilson is Head of Global Insights at Clavis Insight providing market research data and analysis to help global brand manufacturers understand the ecommerce landscape. He has over 10 years of experience and expertise in the FMCG retail and insight industries. Follow John: LinkedIn
Danny Silverman is Head of Product Strategy at Clavis Insight where he is responsible to drive the company’s product vision. Danny is an established industry thought leader with extensive experience helping the world’s leading manufacturers grow their online presence and sales. Prior to joining Clavis, he spent eight years at Johnson & Johnson where he led their eCommerce strategy. Follow Danny: LinkedIn
Declan Kearney is Managing Director, APAC for Clavis Insight. Declan has worked in leadership and consulting roles across Financial Services, Supply Chain and Retail Analytics industries over the past 20 years. He has a passion for business relationship management, and applying data and analytics to drive value. Declan leads the China APAC business from Shanghai. Follow Declan: LinkedIn
So we’re not quite finished with 2016 but it was a busy year, maybe a little of a slower start than expected within the eCommerce industry. But if we look more recently, as the second half of the year, it was really a flurry of activity. So we’ll go through a couple of the key highlights and key moments as we saw over the past eleven or so months.
In terms of 2016, it was very much a year of change and developments as we saw. From Amazon Fresh launching in the U.K.; from Dollar Shave Club and Unilever, with that acquisition there; to Walmart; and I think probably the biggest news of the year — their acquisition of Jet.
To touch on that Amazon Fresh piece: it throws up an interesting dynamic at play within that U.K. market, in terms of Amazon launching in and really disrupting what is the online grocery norm within the U.K. market. But also if we look to Sainsbury’s with their acquisition of Argos and Home Retailing Group, you’ve got traditional online grocery retailers making a move to really mirror the breadth and range that Amazon offer in acquiring non-foods and retailers as well. So it will be interesting to see how that dynamic plays out. There’s always the rumored take-over talk of Amazon and pure-play retailer Ocado in the U.K.
So it is destruction at its very definition. I think 2017 will see Amazon increase its presence more, expand its footprint outside of the greater London area where it’s currently focused with its Fresh proposition. And that will lead to I think greater disruption within the overall online grocery market in the U.K. Destruction maybe for the current retailer set, but I think a positive change for consumers. I think it will be interesting to see how that one plays out.
In terms of Walmart and Jet, again a really interesting 12 months to come and really see where the whole relationship there settles. Many people were maybe taken a little by surprise at the acquisition. Our resident expert Danny Silverman was predicting this for 12 months or so. His 2017 predictions, you can be pretty much set, are going to happen because seemingly he can see the future. But it was interesting in terms of what that means for the Walmart business. Obviously chasing their tale a little when it comes to online, with Amazon and their dominance within the space. I think what Jet really signals in terms of Walmart is the seriousness in which they are now looking towards online — and to start off in really strategically focusing on that channel in a really big way.
Also we’ve seen their engagement in the Indian market in terms of investment in Flipkart. In that area we know the eCommerce growth within that Indian market, it is predicted to be one of the big boom markets over the next couple of years. So Flipkart want to get a leap on Amazon in that respect and go head-to-head in that latest battleground. Very much a year of change and acquisition. So interesting to see what 2017 holds in that respect.
In terms then of record-breaking events online, sales and these mega-shopping events are very much here to stay. I think there was some skepticism, even from myself, so far as — is there longevity in the mega-online shopping days, and I think 2016 has proven, absolutely yes, there is. And they are very much here to stay. We saw single-day smash every record that it had set previously. And this year we saw similar trends emerge from Black Friday, Cyber Monday in the U.S. And Prime Day as well in its second year expanding to more markets outside of the U.S. and mainland Europe. So if there was any risk in these events being diluted, I don’t see that being the case. I think the skeptics may have said that these events are no longer events, that they’re becoming weekends — Amazon is having 12 days of continuous sales and their impact will lessen in the eyes of the consumer. But I think that the consumers have voted with their wallets in this instance at least for 2016. And has really shown that it’s not a lessening activity and that it really is something that we’ll see continue even more so into 2017.
And finally then in terms of 2016 and what the overall highlights were: it was very much a year of continued innovation and underlying convenience in what that innovation brought to the market. So it really was a year where mobile emerged as a platform very much in its own established right; in terms of the eCommerce channel, I think it’s predicted to account for up to 50% of all digital transactions in the U.S. by 2017. So mobile is going to be an even more significant presence as we look to the next 12 months. Obviously in terms of technology and how Amazon are really pushing the boundaries in that regard, we see continuing development of their offerings, their voice-recognition offerings in terms of Echo Dot. That was even their number one seller on Black Friday and Cyber Monday, if we just relate that back to those online shopping days. That then is generating a greater connected shopping experience in the form of Amazon Choice and the predictive recommendations, product assortments based on your purchasing history that that is offering up. It’s a really exciting time. How they’re bringing all those elements together in a very easy-to-access way. Outside of that, I suppose we see Walmart leveraging their strength in physical infrastructure and more recently launching the pickup and fuel concept. So it will be incredibly interesting to see where that goes. Obviously Walmart has some way to catch up in the online space. But that is one to keep an eye on as we move into 2017, just to see how that plays out and how we can possibly see Walmart creep up on Amazon.
A very recent advance in terms of technology in the online spaces is Amazon Go, which is an incredible proposition for anyone on the line today who has seen the videos associated with the concept. It really is a next step in terms of that grocery offering, both seamlessly connecting to that omni-channel aspect — you’re online, you’re offline — shopping purchase history. So incredibly exciting in terms of an overall year for eCommerce. As I said, it may have been a little slow to get going but these past six months have really seen that activity come to light. And as Danny will come on to talk about later in the presentation, 2017 is full of more good stuff. With that I will pass it over to Declan, who will take you through the key eCommerce trends in China.
Thanks and good evening to everybody who’s joined. I’m calling in from Shanghai and looking forward to talking you through a number of the key trends that we’re seeing from a China market perspective. And also touching on the impact that these trends are having both on the shopper and, obviously from your perspectives, the brand manufacturers.
Chinese people are really obsessed by a number of things, as those of you who have been to China and spent time working here will be familiar with. Starting with the traditional Chinese hot pot. Next from a social media perspective, with almost 700 million netizens. Chinese really are addicted to their mobile phone devices and social media platforms, such as Weibo, WeChat, and QQ. Another area of obsession with the Chinese in the past couple of years has been live streaming of popular TV series. In this example we have “House of Cards;” and also an example of live streaming of brand manufacturer products is the Meme Box, which is a Korean brand. Here this image here, you can see that the brand is actually advertising in real time, so live streaming, which consumers are watching on their mobile devices, consumer products. This is over Tmall’s mobile app.
Another area of obsession as well and a recent trend is that of the key opinion leaders, KOLs, in China. One of the online stars named Papi Jiang recently secured an investment — of 22 million RMB, which is about 3 million Euro– from Lily & Beauty. So again individuals, not all of them famous, but some are building fame through live streaming and social media channels.
And finally, in terms of obsession, obviously Chinese consumers and shoppers are obsessed with brands. Not only international brands, such as Apple and Samsung (who had a tough time recently), Giorgio Armani, Gucci — but also national Chinese brands such as Xiaomi, which is a consumer electronics manufacturer with a very strong mobile phone market share, certainly in the top 3 or 4 in China, very closely tied with Apple and Samsung. Huawei is also an example of a manufacturer who plan to enter the U.S. market. They planned towards the end of 2016; that’s been delayed. But expect to see them in the U.S. in 2017 starting with low-cost mobile phones. So that gives you an idea of the obsession in market in China.
Particular trends that I want to talk about: China truly is a mobile first market. However, research has shown that multi-screen users are spending more than mobile-only peers. So there is a percentage of the market that is really mobile-only, and they no longer actually use a PC. Singles’ Day, as we’ve touched on before, saw 87% of purchases over mobile devices. We see a lot of our customers who are seeing very high percentage figures in where the actual buying is occurring.
An image there — I spent a lot of time on the metro in Shanghai and truly it’s from a very young age to quite an elderly age that Chinese shoppers are using mobile devices, which I think is one of the differences — the absolute capture of shoppers and the adoption of using mobile devices across all age groups in China.
There are a number of examples of innovation coming from the market. A couple I’ve got here are from Xiaomi (to use a Chinese manufacturer). This is the Mi Box, which is a very innovative live streaming TV device. The next one, an example in terms of online, is a brand called 3 Squirrels, which we refer to as an eCommerce borne brand, which was not originally available in the physical store, so it was essentially borne online. Very popular. And the next example is a computerized Xiaomi toy robot, which seems to be an engineer’s toy, whereby you can write your own scripts and instruct the robot to take action. It’s actually possibly a good Christmas present for my 12-year-old son. So there are some of the examples of the innovations.
Next we have the emergence of brand manufacturers establishing their own stores on social media channels. This is an example of JD … this is the retailer store on WeChat. Many luxury brands are seeing WeChat and other social media channels as not just an alternative but at times superior route to market — and an opportunity to establish and maintain strong brand image. And it’s a highly personalized shopping experience because, essentially, if I’m online on WeChat — which Chinese people are permanently on WeChat — it’s a highly personalized shopping experience, whereby once I buy something I can post my moments on WeChat. And these moments or these shares via WeChat and other social media channels are proving very influential on brands’ followers. And therefore manufacturers see it as a clear route to market and also a massive influence on their success.
Other trends: We see obviously the emergence of cross-border sales, which has had its challenges recently. But a lot of our customers are talking about monitoring cross-border channels. Essentially, these channels allow shoppers in China access [to] products that are internationally otherwise unavailable — that are not available in China to buy. So a couple of examples, brands who are succeeding and building significant market share over cross border would be Swisse Wellness in the multivitamins market, and also Ocean Spray.
The next that I want to touch on is online to offline. It’s something that we learned a lot and our customers obviously speak a lot about online to offline. In China, Alibaba would certainly have you believe that the physical world is merging with the virtual world. And I believe it is. However, online to offline is maybe not as prominent for our brand manufacturers given the dominance and the online-only presence of the likes of Tmall and JD. So I recently tried to coin a phrase around omnichannel, replacing the “i” with an “e”; because in truth there’s so much to address and get right in the eCommerce channel and the multiple channels across eCommerce.
So essentially shoppers now can virtually visit, or visit through the cross-border stores, Tokyo, or Macy’s in New York, or a farm in New Zealand to buy products. A couple of reference points here: consumers in tier 1 cities are often buying premium healthcare products from overseas vendors — like dietary supplements, medicines, medical instruments. And for the shopper or the consumer in China these are supplementing the offerings of local retailers. In the tier 2, the smaller but still, by international standards, massive cities with millions of people, luxury goods are accounting for the highest proportion of purchases from foreign vendors, which I think is a really important trend for you guys to look out for.
Obviously we can’t talk about eCommerce in China without talking about Alibaba. And recently there have been a number of articles, there are always articles, on Alibaba. One of the recent ones, I think it was on Forbes, was talking about Alibaba becoming or being an eCommerce company or an economy. In truth I think that’s certainly the vision. Not yet an economy, but its dominance in the market and its strength in the market is such that I think they are becoming its own economy. A point I’ll touch on shortly but briefly now. I certainly see the world merging between the shopper going from a virtual experience shopping, but also socializing over the likes of WeChat. And really this idea of merging commerce and entertainment, I think it’s going to happen even sooner than even Alibaba might believe. So this is certainly one of their stated goals.
The next couple of points: Robotics, the role of artificial intelligence, augmented reality and virtual reality according to Alibaba will be adopted across sectors like eCommerce statistics. And I know we’re seeing these internationally. We’ve seen the likes of Microsoft and Volvo in Europe using augmented reality. So not China-specific but certainly on the back of 11/11 recently, I think augmented reality was probably planned as being more prominent over 11/11 than it was. But I think it’s certainly setting a trend for next year, that augmented reality will certainly be prominent, certainly in eCommerce and as Alibaba different market verticals and functions.
A couple of examples here of augmented reality are Alibaba’s work with Cainiao’s AR, which has been developed with Microsoft. So you can see Alibaba are partnering with a lot of third parties. And another example which was new to me in the last couple of months is that of facial recognition payments. Alibaba’s affiliate, namely Ant Financial, recently acquired U.S.-based EyeVerify. To digress for a moment, you’re seeing a lot of Chinese companies invest obviously in English premiership football teams, U.S. companies, etc. So you can really see China globalizing in various markets including in eCommerce. So I believe in beta version, the EyeVerify. Again very easy to see this being in the future, and the future truly is tomorrow.
So a couple of other examples: Alibaba have partnered with SoftBank, one of Alibaba’s early investors in the area of humanoid robots, enabling the scanning of passenger ID cards and printing boarding passes. The next example I have here is Yunos; “yun” is the Chinese for cloud. Essentially this is Alibaba’s own cloud operating system. And the Yun operating system is being used to power the Roewe RX5. And for those of you in the U.K., Roewe is the old Rover brand, which was acquired by SAIC; they acquired the technical rights to Roewe. So that’s an example of Alibaba who aim I believe to have about 10% of the operating system market within the next couple of years. So that’s one of their latest innovations. And the other example in the middle there is the more robotics, the AGV, the automated guided vehicle, used within warehouses and with distribution, which again is optimizing automation.
So I’ll just touch briefly, before I pass to Danny, the impact of all these trends and what’s happening in eCommerce and omni-channel in China on shoppers. So in truth with sophistication comes massive choice. The first point here is that there’s no need to enter the physical store. If you’re a little bit old fashioned like me, you still like entering the physical store. Well certainly there’s a generation of shoppers in China who really I think are growing a disdain for the physical store and maybe only will enter it if they need to collect their online-ordered products. With the sophistication of the market there is a massive choice. But I see also the risk for brand manufacturers is that it’s information overload.
For me the shopper is consuming a massive amount of content and is generating content. Now similar to the concerns that you might have on Tmall in terms of fake products: there is an element of concern over fake reviews in China. But it’s nothing like the concern — the valid concern — around fake products. However, the shoppers’ voice, which I’ll come to again, is really proving highly influential in the marketplace and is one that the brand manufacturers are listening closely to.
I’ve touched on that already in terms of the influence of social media. So I’m originally from Ireland. And in Ireland and other parts of Europe, we talk about the seamless, simple experience in terms of shopping and buying. But I think we’re light years away from the likes of China. So it truly is a seamless shopping experience. Most of my colleagues don’t carry cash; everything is on their mobile device. Everything is conducted — in terms of payment, shopping, transactions — over the likes of Alipay, again which dominates. So it is a seamless shopping experience.
Given cross-border trade and given the size, the eCommerce market in China represents just over 50% of the global eCommerce market. So shoppers in China are having an influence in my opinion on global brand manufacturers’ strategy not just in China but in all parts of the world.
So I’ll briefly touch on the impact on brands, which I may have covered already. Really there’s a battle for loyalty. With choice comes change. And in China shoppers have that choice; they have that opportunity to change. So securing the one-off purchase or the initial purchase is obviously key. But the constant innovation, the constant user experience is critical from the brand manufacturer perspective.
Interactive content is — you could call it the new battlefield, to use a cliched phrase. But it truly is. It’s not good enough any more just to have accurate and effective content. Shoppers are expecting dynamic live video and more from their brand experience. We’ve touched on this already in terms of the experience. So again they’re not just looking for the product; they’re looking for an overall experience, and obviously with online to offline that includes the physical store as part of their end-to-end shopper journey. I mentioned this already: we have a lot of customers in China who are leveraging our own platform to really get deep into exactly what shoppers are talking about. Not only just positive or negative sentiment but really — what attributes are they talking about? And we’ve had a lot of senior executives mandating from maybe the global head office or within China that brand manufacturers’ eCommerce teams, CMI teams, need to really delve deeper into the shopper voice. One particular customer yesterday, who I obviously won’t name, their mandate is: look guys we seem to have missed the mark in a few of our recent product launches — we really need to understand what the shopper is talking about and deliver what the shopper wants.
Couple of others before I pass to Danny: Collaboration with e-tailers. I know it’s difficult to collaborate with certainly the dominate player in China. But they are collaborating with third-party software providers as we’ve seen early on and various third parties. So those brand manufacturers who can demonstrate category leadership and online leadership will, I think, succeed more in partnering with Tmall and JD. And I know JD for one have a number of strategic partnerships. There is a limit to how many strategic partnerships they can have. But I think that’s an essential point for manufacturers.
And finally, and aside from our own bias, our brand manufacturers are getting a pretty decent level of back-end data from the likes of Alibaba and JD. However, monitoring and optimizing the shopper’s view remains key to the success certainly of the customers who we work with in China.
Great. Thanks Declan. And thank you for your wonderful presentation. Certainly a good example of our global reach, considering we have presenters on the line here now from Dublin, Shanghai and Danny is actually is Dublin but is Boston based. Danny over to you.
I’m going to round us out today with five things that we should be looking for in 2017 that have potential to disrupt your 2017 plans. I think that no matter how well we plan there’s always the unforeseen but it’s even more so in eCommerce, where we see the rapid pace of technology and innovation. We can predict as much as we want, but particularly in the U.S. where you have Amazon, in China where you have Tmall, and other world-leading innovators there’s a constant state of innovation and change. And being able to adapt to that change is key to success in eCommerce.
We jump into the first trend. To some this may seem rather obvious. But the click-and-collect trend is on the rise. I think that we’ve seen over the last few years it’s been dabbled in here in the U.S. And this is largely a U.S. trend first and foremost. It’s been dabbled in the U.S. but nowhere near what we’ve seen in Europe, in the U.K. and France, where this is the dominant model. But in 2016 we saw some successful models rolled out. We’re seeing this in real time. And just in the last few weeks, as John mentions with Amazon Go, and Walmart’s new pickup and fuel model, where they’re getting aggressive as well in what this click-and-collect or online eCommerce type of connection means — and how it’s going to get more impactful and accelerated.
If we go to the next slide and talk a little about what that means and why it’s important. From a shopper’s standpoint it means more options. It means more convenient and hopefully it means more eCommerce adoptions. So we see click-and-collect and innovation and grocery as a critical tipping point for eCommerce, particularly in the CPG industry where it still can represent less than 5% of sales for a large number of categories. The innovation and options in the convenience space in the grocery space will really rapidly accelerate how willing people are because we’ve removed so many barriers and so many frustrations in the existing online purchase process.
Saved lists becomes essential. We’ve always worried about subscribe and save as brand owners and business owners because it takes discovery out of the mix and it’s all about locking in the subscription. Sorry to say that’s actually going to get worse because the down side for us on the manufacturers’ side is that click-and-collect and services like this means that saved list become more important. This is what you purchased last time — add to cart, with very little opportunity to change unless someone is going in and actively managing that list. So winning the initial purchase or introducing opportunities to interrupt the current pattern or purchase choice will become more important of the marketing mix and the eCommerce mix.
We talked about the additional impact on brands. Click-and-collect isn’t a one-retailer game. And what I mean by that is particularly again in the U.S. Amazon has been the one-man show for a lot of our customers and a lot of those who are focused at Amazon. Click-and-collect is a lot more democratized. There’s a lot more services out there; there’s a lot more technology out there that’s available to more players. There’s local players. We’ve talked to technology partners who specialize in helping mom-and-pop grocery stores add a click-and-collect capability — with both a shopping tool as well as the technology on the web site. So we’ll see a lot more fragmentation to some extent of retailer impact. Becoming very location specific in your monitoring of the analytics becomes critical. In stock and price can vary not only from location to location but even inter-day. We know from Europe that the morning in stock rate can vary quite a bit from the evening in stock rate. And having those analytics and understanding how to optimize them on supply chain becomes critical. And last as many of us already know, grocery opportunity brings a play for those heavy products. The low price point, heavy weight, or hazmat items that previously have been crapped out on Amazon, or simply haven’t been efficient to have any commerce, now have a very valid and growing eCommerce play.
To move to the second theme — for those we’ve spoke with before or who follow us, you know that this is something that we’ve been tracking for some time now. The crisis of confidence in reviews is absolutely on the rise. And while we know that reviews is one of the original, fundamental reasons why shoppers love to shop online — because they like to hear from their peers — the proliferation of reviews clubs, of outright fraudulent reviews, bot-driven reviews, has really created a lot of confidence crisis into how reliable that rating is and whether the review you’re reading was actually left by someone who you would consider a peer and is leaving a credible review.
We’ve seen Amazon take aggressive action on this. In the last year they’ve started to crack down on fake reviews. They’ve banned incentivized reviews outside of Vine. Then they went further and started putting restrictions on their own Vine program. We all applaud Amazon for the efforts they’re making, but the question is, is it aggressive enough? You have products out there with tens of thousands of reviews, and the bulk of them may not be fully legit. How fast are they going to scrub that? How fast are we going to get to a point where we’re back to a point of really knowing that the reviews we’re looking at are almost 100% left by genuine shoppers?
So in terms of implications from a shopper point of view. It means that in theory shoppers will start to trust reviews again. The question we’ll continue to watch is, will it be enough in reality and in general if they are successful in improving the shopping experience overall. I mean in general reviews improves the shopping experience. And outside of Amazon any retailer that’s taking syndicated reviews from brand sites, or has other programs in place to drive genuine reviews, it’s absolutely a positive on the business. So if we then talk about what that means for brands. First and foremost, there’s fewer opportunities and options on how you drive reviews. But it makes sure that brands are being responsible in the options that they’re choosing and making the most out of them. Monitoring reviews becomes even more important because those reviews that may not be genuine we might want to be more responsive to. You’re posting a response if it’s a negative review. But ultimately when you think about established plans for 2017 where you may have reviews programs in place, whether it’s Amazon Vine voice or a content syndicator like a Power Reviews or Bazaar Boys, there’s a whole spectrum of potiential disruption that could happen in those plans. So watching what’s happening in the space is going to become very critical and a potential for disruption next year.
The third trend is marketplaces. There’s a real paradox here where we talk about historically marketplaces to manufacturers have been a threat. The product was from questionable sources. It was of questionable quality. It wasn’t known. It was interfering with your day to day sales. We are seeing on the one hand more manufacturers who are so called “white hatting”; the most credible of the third party sellers where their product source is legitimate. And they therefore want to make sure that they have the right content. I think that’s one element to follow. But even here in the holiday season we’ve seen headlines that the bad seller problem on Amazon is at an all time peak in terms of the fraud and the bad activity that we’ve seen. Fake listings going up and then disappearing overnight and so on. It’s clear that not enough is being done. So again watching for both regulation as well as retailer self-regulation in 2017 has potential to introduce some uncertainty in terms of how you manage your business and how you compete with third-party sellers.
In terms of shoppers: marketplaces can be a good thing; it means more options. But we also know it can be a bad thing, more potential for confusion. And what that means in addition to looking at 3P sellers you can work with and potentially looking at selling directly to that listing that you previously had challenges with online — you can now sell. It also means, how do you ensure that customers have trust in your listings, that you have the right content, you have the right images and everything is there that gives the shopper trust that they’re buying from the right listing and they’re buying direct as opposed to through a third party who’s unknown.
The mobile optimized image revolution is underway. Again a common theme that we in the industry talked about for years is that, taking the pack shot of a product and packaging that was designed to sit on a physical shelf and be viewed from three feet away is not ideal when you’re on a mobile device and the image is smaller than your thumbnail. And we know from eye-tracking data and user data that that image is the large part of what drives the shopper decision on which product to click on. So we’re finally seeing this revolution come underway where retailers are opening up to the idea that the product image doesn’t have to be an exact match to the package. We’re seeing this across many retailers around the world where they’re being increasingly open to adopt it and seeing more and more manufacturers start to put their toe in the water to understand what that mobile-optimized solution looks like. There was a partnership between Unilever and University of Cambridge to establish a standard on it. It’s an open standard that’s available to anybody. The files, the graphic files, are available to anybody’s who interested. But we are of course already starting to see manufacturers put their own spin on those standards.
In terms of implications: In terms of the shopper, it just means a better mobile shopping experience, as we see mobile become more and more important, particularly as we get into the click-and-collect from the first trend and we see grocery and so on. We see maybe it’s Amazon go or the Walmart concepts where there’s more shopping being done online. These mobile images are going to be great for shoppers because it’s going to help them make the right decisions faster, which increases likelihood to convert and sales ultimately.
In terms of brands: This is becoming a must. In 2017 if you don’t already have plans to create mobile-ready and eCommerce ready images, it needs to get into your plan now. This is going to become an industry standard. And those who do not follow will be left behind because they won’t have those same conversion rates, particularly in search, particularly on mobile devices, as competitors who’ve leaned in and gone forward with the mobile-ready images. And I have a note here about eCommerce decision trees. The key thing about mobile images is making sure that the right information is visible. The standard that’s out there, you know, brand, format, variant and size, I’m sure that there’s brands out there who are going to want to validate their own decision tree to make sure that those are the right four. Or if it’s those four, in what combination and what balance is necessary for the shopper to make the decision on their product versus another one.
And then the last one. It’s probably my favorite of all. Screen-less commerce is here. And it’s making a big impact. It’s largely being driven by the Echo device in the U.S., now in the U.K. We’re seeing other technology providers like Google and Apple have similar devices, had Siri, for years. But they’re upgrading that. Shopping device, shopping tools where you don’t need to look at a screen. And all the content and information that we’ve relied on to optimize our eCommerce product detail pages are actually now materializing through a search aspect. So for the shopper it’s great because over time it will introduce more frictionless shopping and the ability to just add items to list or get them ordered more quickly. But for brands, there’s new search rules to play by. There’s new things to monitor for. The Amazon Choice tag is something that has been present in the U.S. for over a year now. We haven’t seen it in other markets yet. But understanding if you are the designated Amazon Choice that that is going to improve your conversion as screen-less commerce, particularly on the Echo device, takes hold and expands.
And then just to conclude here, a quick recap of the five trends that we talked about. We put this into the Clavis pyramid of how to prioritize and how to focus. And if you look at the pyramid foundationally — getting and staying in stock, being discoverable, ensuring accurate fundamentals, right assortment, and ultimately engaging content — taking a look at how these trends then drive into those five pillars of your eCommerce strategy. That store-based eCommerce is going to impact your ability to stay in stock because it’s no longer a one number game. It’s a number game of as many locations as the retailer has. That screen-less commerce now has an impact on how you’re optimizing for search. That mobile-first image now is a key part of how you’re optimizing your accurate fundamentals. That marketplaces are going to impact the assortment decisions that you make. And last that confidence and reviews impact your ability to engage through a time-tested vehicle that reviews is. So having an eye on these five trends and understanding how they have a potential to impact the pillars of your eCommerce plan is critical. I have no doubt that there will be five more, that as we look back at this time next year, and John does his 2017 recap, there will be five additional ones that aren’t here today. But as we sit here today, these are the ones that we think have the most potential to disrupt and the ones we’d strongly recommend manufacturers have on their radar.