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Predicting the future is hard, but as science fiction writer William Gibson is believed to have once said, “The future is already here — it’s just not very evenly distributed.” As my day job revolves around poring over petabytes of data about e-commerce companies, I already see the future a little early. Some of the predictions below are already happening thanks to a confluence of technologies like artificial intelligence, predictive analytics and scalable big data tool sets that have become commonplace, but I believe that 2019 will be the year of mass adoption.
1. Voice shopping in vehicles may arrive. I predict that we’ll be able to use our voices to shop during our commutes, thanks to the seamless integration of voice interfaces in cars. We could see billboards prominently using voice shopping calls to action. Amazon released its Alexa Auto Software Development Kit in August, which allows you to summon Alexa for navigation, controlling entertainment options, building a grocery list, etc. Very soon, I think we can expect voice shopping in vehicles because it’s really as simple as retailers adding an Alexa skill for voice shopping.
2. The return on investment for AI initiatives could be clearly understood. I think AI-based curation will likely propel companies in niche categories of adult fashion and baby products into an orbit of fast growth, giving a much-needed ROI baptism for AI tech. Stitch Fix and Kidbox are two examples. These companies have proven that the data they have about the tastes of their subscribers can be analyzed and modeled at scale using AI and machine learning techniques to recommend products that increase relevance and drive the upsell, thereby showing that they’re good case studies for the relevance of AI tech.
3. Computer vision may move to less exciting parts of retail. I predict that technologies like computer vision (a set of AI techniques that enable computers to see, classify and process images just like humans) will have early adopters in areas other than visual search and recommendations and will move into less exciting areas of retail, like product tagging and quality control for grocery retailers. While the technology has always been there, I think the availability of massive caches of images and the big data technology to process them efficiently means that computer vision is a technology whose time has come.
4. Direct-to-consumer growth momentum could be muted.I think the cost of acquisition of customers will likely continue to rise for direct-to-consumer brands due to increasing competition for customer attention across all social media platforms, which could put stress on their ability to scale beyond initial success. Acquisition interest in direct-to-consumer brands might be muted until we start seeing breakouts that cross the $100 million revenue mark.
5. Instagram could challenge Amazon’s dominance in mobile shopping. In the U.S., Instagram now has over 100 million monthly active users, while Amazon’s app has a little over 140 million monthly active users. With the buzz around direct-to-consumer brands that rely heavily on Instagram combined with Instagram’s plans to launch its own stand-alone app for shopping, I predict that the company could become the top choice for mobile shopping apps.
6. Cross-border commerce may no longer be a choice. I predict that top sellers in marketplaces like Amazon will continue to scale seamless cross-border transactions, thereby further cementing Amazon as a destination for midsize brands. As reported by Reuters, in 2017, over a quarter of all revenue for sellers on Amazon around the world came from cross-border transactions, which is an increase of over 50% from 2016. I believe this means that specialty e-commerce companies ought to think about their cross-border strategies to stay relevant even in markets where Amazon sellers in their category aren’t directly present.
7. Social media platforms could become e-commerce platforms.I think social media platforms offering native payment integrations for e-commerce could start rivaling platforms like Shopify for launching e-commerce businesses. Instagram’s 1 billion active monthly users all over the world and WhatsApp’s 1.5 billion provide them with unrivaled access to shoppers already. Native payment capabilities on these platforms could turn the tide against traditional e-commerce platforms.
8. Click-and-collect could come of age.I predict that more retailers will offer click-and-collect services rather than same-day shipping. With click-and-collect, they’re limited only by space constraints at locations that don’t have room for lockers or parking for cars where customers can collect the items they purchased online. As the trade war between the U.S. and China escalates, products in certain categories may become pricier, and shipping may become costlier as well. One way retailers could rein in the price hike is reducing the dependence on last-mile shipping and instead encouraging customers to collect from stores. Target plans to expand its click-and-collect service to nearly 1,000 stores by end of 2018. Walmart already has curbside pickup programs at 1,800 of its stores and plans to expand to others soon.
9. Independent subscription businesses may continue to lose subscribers.Nearly 40% of consumers who use subscription services cancel their subscriptions within a year of subscribing as the novelty wears out and price and product locking with inflexible billing create buyer’s remorse. I think subscription companies that focus on replenishment (e.g., a monthly supply of detergent) and large retailers with their own subscription services will likely experience greater customer loyalty than upstart curation-themed subscription businesses.
10. The aisle could become more interactive. I predict that the product experience in store aisles will improve with video and interactive product information displays that tighten the online-to-offline experience. Many retailers are realizing the value of the in-store experience, which I think will lead to increased budgets for interactive in-aisle experience technology like augmented reality and virtual reality.
For retailers, I predict that 2019 could be the year when the promise of the omnichannel customer experience could truly be met, thanks to hitherto buzzwords like AI, ML, computer vision, big data, AR and VR actually proving their business value. If you’re a founder or a technology executive who’s been sitting on the fence wondering when to delve into these new technologies, take that bold plunge. You have some real-world success stories to benchmark against.