| I hope you had a great New Year and that 2015 is off to a good start!
With the holidays right behind us, I wanted to give you a recap of how eCommerce grew in 2014, and some of the trends in online marketing I’m predicting for 2015.
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Online Sales Up 14% (Nov 1 – Dec 31)
According to an IBM Corp report, online sales from Nov 1 – Dec 31 grew 14% from the year before. However, the average order size was down 8% from last year, to $119.33.
More people are shopping than ever before with their mobile devices. People are doing a lot of research on their smartphones, but are purchasing more from tablets (13%) than smartphones (9%).
Mobile Shopping Up. But Desktops are not dead.
But in case you listen to the “gurus” who think that mobile is everything and that laptops and desktops are dead, people still are using their desktops and laptops for the majority of online purchases (77% of purchases).
People also spend more money when they shop on a laptop or desktop. The average order size for orders on desktop / laptops was $125.12, compared to $104.82 on a mobile device.
Why? Screen Real Estate + Keyboard. A real keyboard makes it a lot easier to type in shipping and billing information, and it’s a lot easier to visit a site with on a 27″ screen than on a tiny smartphone.
Plus, many sites still aren’t responsive (so they work well on a desktop, laptop, tablet and smartphone). And many don’t take PayPal, which allows users to checkout quickly without having to do much more than enter in their email address and a password.
As sales trends go, people are purchasing tablets less often, as there is not a compelling need to buy a new iPad every year. And unlike a phone, people are less likely to drop and crack a tablet’s screen, too, as they don’t bring them everywhere they go. Especially if they have carpeted floors at home.
But people still open their email on their smartphones first. They’ll do research, even in the middle of a store, and then buy after that. But they’ll often grab a tablet or walk over to a desktop or laptop for the actual purchase.
Apple iOS users spend more.
Apple iPhone and iPad users spend more than Android.
People who placed orders from an iOS device (iPad, iPhone) spent $110.92 on average, compared to only $87.26 for Android users (27% more).
Apple iOS sales also accounted for a total of nearly 18% of all online sales – about four times that of Android devices.
Web-influenced retail sales.
People are still buying at retail stores, but the latest research shows that 52% of retail sales in 2014 were Web-influenced. Meaning the sale was encouraged by an email campaign, social media, or more.
Delivery Trends – Fast & Slow.
This past year, several companies made a big investment in same-day delivery, testing this out in New York, San Francisco and other big urban markets. I made a purchase via eBay, who was testing same day local delivery. I received the package with a FedEx Zero sticker on it – something I hadn’t seen before.
But even as Amazon has trained their tens of millions of Amazon Prime Members (myself included) to wait patiently for second day delivery, delayed delivery in exchange for a discount, rebate or free digital product is on the rise.
For example, I placed an order yesterday, and I could have free second day delivery (via Amazon Prime), one day delivery for $3.99, or I could wait a week for regular delivery and get a $1.00 credit toward the purchase of a digital song or eBook. I don’t live in any of the same-day delivery areas, so that wasn’t an option for me. I chose the free second day delivery.
Responsive Sites – Extra-Large Full Screen Version.
Another trend I’ve started to see are responsive sites that have a special mode for a really big screen – such as a 27″ monitor. Instead of shopping with small laptop screen, some sites are filling up the page with larger photos, videos and more content.
Site Hacking / Credit Card Information.
It seems that 2014 might be remembered as a time when it might have been safer to shop online than at retail stores like Target, Home Depot or Staples. I had to get new credit cards twice from purchasing at retail stores. It’s a drag, because those credit cards were set up for auto-pay for several things, so I had to remember to go back and re-set that up.
Online shopkeepers – while not at all immune to being hacked – have spent a lot more time securing customer information like credit card information; this hasn’t been the case in the past. Most of the major payment gateways, such as PayPal Pro and Authorize.net, require merchants to only post to their gateway from SSL connections, and have placed a lot more security checks in place as well.
Online, customers are increasingly wary to pay by electronic check – it’s a lot tougher to replace your bank account information, and have to reprint paper checks.
I would watch for a rise in solutions like Apple’s new payment method, where a one-time credit card number is automagically generated, and the merchant never actually sees your credit card number or bank account.
Look also for increased trust in PayPal, which gives end users one more layer in between their bank account, credit card, and a merchant. They’ve been advertising quite a bit on TV as well, talking about their security.
We’ve seen a small uptick in merchants who take Amazon payments – it’s worth testing out. But unless your site caters to the uber geek crowd, you might not want to spend a lot of money trying to take BitCoin, at least for a while.
On the note of security and hacking… with the rise in ransom ware, make sure that your Website is backed up at least once a day, and make a full backup of the system at least 2x per month to another offline location. And make sure your files are also secure – back them up with an online system like BackBlaze.
Personalization – Still Not Going Mainstream.
Customers love it when a company can tailor a site to their interests. For example, if I own a specific brand of camera (i.e. Canon), wouldn’t it be wonderful if when I went to the site, that Canon branded content would be personalized for me?
According to a Business Insider report, 60% of customers want a personalized customer experience when they are on the Web.
The technology is there. It’s been available for many years. I attended the Personalization Summit in New York during the summer of 2000, keynoted by Seth Godin.
The problem, though, is that it’s a lot of creative time to come up with the personalized segments, and design the personalized experience for each segment. Amazon has done this well. But they’ve spent billions of dollars on their Website. But most other companies aren’t doing much in the way of personalization.
Why? With year over year sales growth on many websites that is in excess of 20%, the return on investment from personalization has been too slight. As the space matures, watch for increased personalization… especially for highly competitive industry segments.
Happy 2015!
I hope your 2015 is off to a great start. Let me know if we can help out with any of your Web development projects!
Thanks,
Jeff Finkelstein
Founder, Customer Paradigm
303.473.4400
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