eCommerce continued to drive the shopper narrative in 2017, from Amazon making a splash buying Whole Foods, to Cyber Monday and Singles Day breaking their own records for the biggest shopping days of the year.

The online landscape is changing by the month, often times giving online native brands a major advantage over established firms. This means manufactures need to stay up on the latest news at all times (we recommend our weekly Top 5 email). Every acquisition or innovation represents a new way to better position items, increase conversions, and grow brand equity. So what can we expect to happen in 2018? Here’s our best guess:

  • Amazon will continue to disrupt – but how?
    • Amazon never stops creating new solutions to ease barriers to buying online. Expect another specialty brick and mortar acquisition (such as Nordstrom's to match Walmart's move with Lord & Taylor) along with serious disruption in the delivery and security space (think Amazon Go). The acquisitoin of Blink may be just the beginning.
    • We expect more payment solutions to make buying on Amazon as accessible as possible to the masses; low income shoppers have remained loyal to Walmart so watch for Amazon to double down on the low income segment, seeking ways to make it easier to shop, buy/pay, and receive orders from Amazon. And this isn’t just a US play: Amazon has invested record amounts in India and across Europe. Watch for continued global expansion, particularly in India, South America, and Canada.
    • The biggest Amazon headlines of 2018, however, will be their entry into the Rx space (the most recent rumors are that they already have distribution licenses in 12 states). While Amazon has tried to downplay the move, rumors and speculation continue to swirl.
    • I also still think a USPS privatization / acquisition is a real possibility, though I've said that for three years now and it hasn't happened yet! Interesting to see President Trump weighing in on the topic as well. 
  • Click & Collect investment speeds up
    • Click & Collect has emerged as one of the leading ways that big box retailers are fighting back against Amazon, and it’s a huge opportunity. They will continue to innovate in the Click & Collect, in-store pick-up and return, and home delivery space.
    • Watch for more acquisitions in 2018, still largely focused on the pure play portfolio side. Expect Walmart to continue to invest in Europe and China to maintain their global leadership position.
  • Voice will continue to enamor retailers, while shoppers figure out how to make the best use of it
    • Adding a screen to voice driven devices is important but it only supports the spear-fishing type of shopping. Voice driven shopping lists are critical in grocery but the conversion from list to purchase without substitution continues to stymie retailers. Watch for innovation facilitating a better voice driven grocery shopping experience, and for Amazon to continue to expand Amazon Choice.
  • Brands will increase investment in Direct to Consumer capabilities
    • This will allow them to list as third parties on Marketplaces like Amazon, as they do already in China. Amazon profitability needs will continue to push more CPG products in particular to CRAP (Can't Realize a Profit) status, forcing brands to cede these listings to third parties, or else become one themselves. Those that don't start or expand this capability now will find themselves farther behind than expected in 2-3 years.
  • Alibaba continues to focus on Asia and battle JD
    • It is unlikely that Alibaba will make a big push into the US or European markets this year, but instead continue to ward off strong competition from rival JD. Continuing to strengthen cross-border and global marketplace sales will be an area of expected focus from Alibaba.
  • Retailer Content APIs
    • Web content is finally getting the recognition it deserves. Retailers will continue to experiment with, and expand, APIs for content management. This are already APIs available for Walmart, Target and Home Depot, with Amazon rumored to be on the way. Retailers must find ways to make content management more automated and hands-off, and thus increase online conversions on their platforms.
  • Mobile Mobile Mobile
    • This year, mobile grew its percentage of total online sales. This trend was amplified during Black Friday. Expect to see this trends continue unabated in 2018. Manufactures that have established themselves with strong online content will move to create mobile ready hero images, which allow logos and key product listings to be easily read on smaller screens. But keep an eye on Voice and AR/VR - combined, these have potential to be the next 'mobile,' replacing the device in our hands with a truly hands-free world.

Happy New Year to all, and wishing everyone a strong and prosperous 2018!

by Danny Silverman
Marketing

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