The world of retail and commerce is in a generational upheaval ... in more ways than one. We read dozens of reports and articles every single day to keep up to date on the latest trends impacting Shopify and eCommerce. Here are the top four eCommerce trends we identified so far in 2017 ... and things are just getting started!
Speedy, Speedier, Speediest
Time is the ultimate commodity and the only one we can't buy more of. The only advantage that physical shopping still has over eCommerce is when the customer says, “I want it now … right now!”
There is a huge trend towards faster and faster delivery. Even industry leader Amazon has recognized that their free 2-day delivery for Prime members is still just not fast enough sometimes. They do not release statistics, but there is a reason that the offer premium next day and – in some markets – same day delivery. This is the real reason that they are experimenting with drones right now. It’s not necessarily to save money on cars and drivers or even to be more eco-friendly – though those are a bonus. It’s to get some products products delivered within hours.
Rule #1 is “don’t fight the market.” The trend is toward faster delivery, so make sure that yours is as fast as it can be.
Niche To Meet You
The beauty of the internet and modern logistics is that it truly doesn’t matter “where” anything is anymore. This is the perfect environment for the niche eCommerce entrepreneur. The market in Tampa, Florida for recordings of Tibetan Throat Singing is probably not enough to feed a family on. But the world-wide market might make you rich.
So while Amazon and eBay and Walmart beat each other up over the huge mass-market products, independent online retailers are gravitating more and more toward specialty products and services. Makes total sense, right?
In 2017, the three top trending niche product categories for entrepreneurial eCommerce are:
- Baby Stuff – strollers, blankets, pacifiers, onesies, and everything else baby-ish.
- Cosmetics and Personal Care Products – including Men’s Grooming.
- Art and Craft Supplies – from beads to silk flowers, from acrylic paints to glitter, and beyond.
Talk’in ‘Bout My Generation
Not surprisingly, Millennials are more likely to prefer buying online. But it is not an “age” thing … not really. It is a generational shift. If you grew up without computers, you are less likely to use them when you get older. But if you started tapping the keys of a PC in grade school, it is second nature to you as an adult. Ditto for tablets and smartphones.
This holds true for engagement as well. On average, both Millennials and Gen X’ers spend six hours per week shopping online. Boomers spend 4 hours, and Seniors 2.5.
The key going forward is to not get locked in to thinking “older” is not your customer. As the tech and internet savvy generations mature, they will take their buying habits with them. That means that low competition markets for traditional mid-life goods and services will explode as Gen X and Millennials hit life’s milestones.
But interestingly, across all demographics, 97% have purchased multiple times on line each year. This means that penetration – the amount of the market accessible to eCommerce retailers – is about as high as you can get (100% penetration is considered theoretically impossible).
2017 is the Year eCommerce “Wins”
Up to this point, eCommerce has been taking market share and capturing customers’ attention. And the big, slow-moving retailers have not just noticed ... they are staring to "beleive." The news is filled with reports of store closings and upheaval.
But stuff’s just about to get a lot more real.
Financial giant Credit Súisse has recently estimated that in the second half of 2017 and early 2018, more than 8500 stores will close in the US alone. This will be the worst year for store closings on record, even exceeding the worst year of the Great Recession (2008). Currently, there is an “inventory” of 24 square feet of physical retail space for every man, woman, and child in America. Expect vacancy rates to skyrocket.
If you remember the best-selling book by Malcolm Gladwell, many think that this is the tipping point when malls become barren, less-pleasant places. This pushes more people to eCommerce as the “social and festival” value of physical shopping is diminished. But consumers are still buying. Spending is strong in 2017. The only difference is where and how they are spending.
But consumers are still buying. Spending is strong in 2017. Respected business and financial company Kiplinger's has reported that consumer spending is set to rise by 3.5% this year. The only difference is where and how they are spending.
This shift is marked by what’s called “capitulation” in the markets. Major retailers that once treated eCommerce as just another bit of “normal” competition are starting to see the light (or in some cases, the cliff) and are acquiring eCommerce businesses or diving in themselves to face – what is for them – and existential threat
No one thinks that ALL physical shopping will go away. But 2017 could be the year that eCommerce truly dominates consumption in the US. And all those empty malls will be converted into offices, manufacturing, and fulfillment centers.
There are a ton of other things going on in the marketplace right now, but these are the top four eCommerce Trends we’ve identified so far in 2017. We will keep our eyes wide open and keep you updated.
Thanks for reading.