The last 12-months have been full of action in the online retail space, but 2019 will also mark an exciting new chapter for the industry.
Technology has been the driving force behind the growth and development of the online retail sector over the last 12-months, and it’s unlikely this will change in the year, or years, to come.
The Trends That Dominated in 2018
According to Stuart Simms, the CEO of Rakuten Marketing, artificial intelligence and data privacy are two of the biggest talking points for retailers at the moment, and will be a huge focus in 2019 as well. “There is no denying that AI is having a major impact on e-commerce, whether it be in enhancing customer service or delivering more efficient targeting in advertising,” he says. “Combining AI with behavioural insights and employing this into programmatic advertising has yielded incredible results for retailers.”
However, while emerging technologies like AI have marked an exciting chapter for retailers trading within the online realm, escalating consumer concerns surrounding data privacy have proven challenging. “There are growing concerns from consumers about how their data is collected, where it is being stored and how it is being used to re-shape the e-commerce industry,” Simms says.
“Privacy and data regulation, along with ITP compliance is challenging the way retailers target and engage with consumers. Privacy by design is more than buzzwords and thinking about how the end user’s choice can be managed, it is the new normal,” he continues.
Take the scandal surrounding Facebook when news of the Cambridge Analytica breach broke earlier in the year. At the time, the social media giant faced immense backlash online with users claiming that Facebook couldn’t be trusted. Recent research has also indicated that 58 percent of Australians would opt out of sharing their personal data with businesses if they could, while 70 percent of consumers in the US and UK are uncomfortable with how their data is collected and used.
“It’s on us, as an industry, to make sure we’re supporting our customers to ensure data meets evolving privacy regulation requirements around the world, and that the technology and tools we use are designed to create a positive experience for consumers. It is certainly a new and evolving challenge, but not insurmountable, and will lead to better advertising across the board,” Simms explains.
While both AI and data security have been talked about a lot over the last 12-months, and indeed, long before that, Simms says it’s unlikely these conversations will fizzle out anytime soon. “We will see a rise in the use of AI and machine learning to ensure retailers are delivering interactions that are timely, relevant and that add value to consumers’ shopping experiences. We’ll see programmatic evolve into the next iteration of other traditional digital marketing strategies, like affiliate marketing. The possibilities for AI and programmatic are really endless, and we are constantly exploring additional applications of its use across our products and solutions.” At the same time, Simms says that data security will continue to evolve. “We are starting to see the effects of the GDPR, and it will be interesting to see how privacy regulation influences other regions as policies are adopted locally,” he says.
What to Expect in 2019
Customer experience. It’s a term that’s thrown around constantly in both the offline and online retail space, but its importance has never been greater than it is now. “Creating a seamless experience, regardless of where a consumer chooses to shop, will continue to be a driving force for retailers. Each consumer experience is different, and with no uniform customer journey or persona, we need a greater understanding of how each consumer is interacting with brands,” Simms says.
“These will be garnered through robust reporting and attribution, providing behavioural insights that can be used to improve consumer experiences.
“In Australia specifically, retailers will work to overcome the barriers of online shopping in an effort to continue driving e-commerce growth. Our State of e-commerce report found that the key barriers to online shopping in Australia are high shipping cost, uncertainty around returns and payment security. Retailers are aware of these barriers and in 2019 they’ll work to break these down and improve online consumer sentiment.”
The Current, and Future, Evolution of Online Retail
Each trend and e-commerce initiative that emerges has a role to play in the future of the online retail landscape. According to Simms, data regulation will form stronger relationships between consumers, retailers and technology providers, while technology will put the power in consumers’ hands when it comes to choosing how and when they will shop.
Interestingly, he also believes that programmatic advertising will have a role to play in how retailers market their businesses well into the future. “Programmatic will account for half of Australia’s online display advertising spend in 2018, which is set to exceed $ 3 billion. We’re now preparing for a future where the real-time automation and self-learning that comes from programmatic and AI technology are going to shape all the marketing we do online,” he says. “This will revolutionise the way affiliate marketing is done and will set new standards for affiliate marketing performance.”
Ultimately, 2019 will mark the beginning of a new year, but more importantly, it will signal the next stage in the evolution of online retail in Australia, as the current $21.3 billion market continues to expand.