The Sasson Collection

Online retail also known as eCommerce is a relatively young retail category. Many consider this category an extension of the much older retail category of catalog sales.

In the past two decades we’ve seen some very significant trends and changes in the online retail space. Lets look a bit at the evolution of online retail from its infancy in the roaring 90’s until this very day:

1. Online retail the early years – 1990s.
   • Retailers are basically creating electronic catalogs taking into account slow modem speeds and relatively low tech tools.
   • This is also the dot com boom and there is a rush to gain customers so retailers are selling at low margins and the focus is technology and increasing the user base.
2. Late 1990s to early 2000s
   • Online auction as the hot trend – This increased the chase the consumers had of finding the best deal. Companies are still enamored by the “new economy” and are not focused on profits. The main consideration is getting a large user base, top line growth, and cool technology.
3. Early 2000s
   • The Merchants are coming – While some retailers entered the online marketplace earlier, it seems that most large retailers really invested in online commerce at around this time. This shifted the focus from technology to consumer and merchandising. From increasing customer counts to making sales and profits.
4. 2006 – 2009
   • Web 2.0 – This trend started mainly with blogs but has evolved to a whole realm known as social media. This is not a direct trend of eCommerce but an Internet trend which had great impact on eCommerce businesses. In the mean time many more people are connected via broadband which allows retailers to use “cooler” technology and larger heavier pages with richer content.
5. 2010 onward
   • The rise of mobile commerce – The invention of the iPhone brought with it an amazing increase of Smartphone users. These users want to browse and shop on eCommerce sites. They have fairly slow connections and small screens. But that is the largest growing segment of Internet use and traffic today.
   • The daily deal and flash site world. Groupon created a revolution in advertising and eCommerce. Groupon was able to transform the way people look at advertising and retail in a very short period of time. The shift of risk from retailer to advertiser, the incentive provided to consumer, and the strict and short time limit imposed on consumers created amazingly responsive advertising medium. There are now many daily deal sites operating all over the world, connecting online advertising, and both local and online retail.
   • Flash Deals retail sites such as RueLaLa, OneKingsLane, TheFoundary and others created a unique shopping experience for consumers. Flash sites offer grade A merchandise at discounted prices in sales events which are lasting between 2 and 5 days. Product quantities are limited which create a very strong sense of urgency in the mind of consumers.Flash Deals retail sites such as RueLaLa, OneKingsLane, TheFoundary and others created a unique shopping experience for consumers. Flash sites offer grade A merchandise at discounted prices in sales events which are lasting between 2 and 5 days. Product quantities are limited which create a very strong sense of urgency in the mind of consumers.

Now it’s time to dive in and see what the future holds. Looking back at the brief history listed above we can make some assumptions of what are the up and coming trends of online retail.

One fact that became apparent to me as I wrote this article is that as far as we have gone in online retail many things have stayed the same. To a large degree some of the main aspects of the dot com bubble we experienced in the 1990s was about the “new economy” and how utilizing this new model of reaching customers is making things so much more efficient and therefore goods are less expensive.

As one can see the play on price, time limit, and finite quantity of goods exists today same as it did in the early years of online retail when online auctions were the driving force. Many details have changed but the very essence and core of online retail as a medium empowering the customer to easily do research and find great deals still seems to be at the heart of the buying experience.

Another trend that has happened since the inception of online retail is consumer adaptation. While in the late 1990s very few people were online and only items such as technology, travel, and books were selling, today virtually everyone in the US and other industrialized countries have Internet connection and a large segment of the population is making purchases of items as diverse as art, diapers, t-shirts, and toys.

Below is the framework that online retailers will adapt in order to be successful in the future:

1. Continue offering that feeling of a great deal. As stated above this has been the theme of online retail from its inception and satisfies a basic need of customers. The need of “scoring” or “winning” in search of a deal.
2. Become more social and socially engaging. The Internet is a great tool for customers to see what their friends an other individuals with similar interests think about a certain retailer or certain products. This trend will continue to impact online retail, and successful retailers will continue to build communities around their brand.
3. Technology improvements and breakthroughs – Short term the greatest impact of technology is the mobile web. Mobile commerce allows eCommerce merchants to be connected to customers where ever they are and whenever customers are interested in shopping. However, this is only the beginning. Technology advancements in virtual reality allowing shoppers to virtually try on items by having a camera scan their bodies. Allowing customers to thumb through a rack of items almost feeling the items as they re touching the items. Having virtual sales associates with multiple personalities and look help a customer find what he or she wants and answering questions.
4. Personalization of the marketing massage. Today customers are bombarded by advertising messages more than ever. But they are becoming skilled at avoiding the ones they are not interested in using spam filters, DVRs and simply the delete button. As technology improves customers will develop better control and will request to only get the marketing massages that they want to hear or see. This will require retailers to improve the quality of communications and to become better at asking and receiving permission. Customers will demand higher quality more engaging communication that helps them connect with the brand and improve their experience.
5. The shopping experience. This is the last point in this post because to some degree it includes all of the above. Customers in today’s abundant society already have enough “stuff”. Customers are after an engaging experience. The retailers that will be most successful in the future will provide the customer with a superior overall experience. The experience is broken down to three categories:
   • First, the marketing messages sent will need to appeal to the customer on a number of levels engagement, excitement, and self actualization.
   • Second, the actual time spent on the eCommerce site (in the virtual store) must be fun, easy, exciting, and consistent with the marketing massages.
   • Finally, the after purchase experience must support the same theme. This begins with the item itself which must deliver on the promise, but that is not enough. The packaging, the messages inside the box and further communication by the retailer must all support the experience promised.

So where is it all going? In one sentence we are moving towards online retail becoming more of an enjoyably experience where customers will want to spend time “in the store” and not just quickly and cheaply get more stuff. It will be about matching and exceeding all of the advantages of brick-and-mortar stores by offering a social, realistic experience to shoppers as they arrive at your eCommerce storefront.

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