Data science and expert intuition: Understanding 2016 e-commerce trends

Data science and expert intuition: Understanding 2016 e-commerce trends

You’re familiar with these lists. During every holiday season, marketers scramble to make their predictions for the coming year.

But where do these predictions come from?

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From a few Google searches for data and quick conclusions? From a handful of hunches yet to be proven? Some marketing Willy Wonka factory where fantastic ideas are created?

Or, perhaps even out of thin air?

I wanted to find a better way to advise e-commerce stores how to prepare for the following year. I set out determined to create a list with integrity. A list I could defend.

So where was I supposed to start? I was caught in a chicken and egg conundrum: did I first come up with ideas, and then find data to back them up, or look at the data and make assumptions?

Discovering 2016 e-commerce trends (or, turning gut instincts into data science)

Our marketing team frequently argues over data vs. intuition. The logical and rational thinkers largely make up the data camp who defend data for its predictability, its reliability, its strength in numbers.

On the other end of the spectrum, our emotional thinkers argue for intuition’s sake – explaining that they want to feel good about decisions, want to be able to see the decisions our marketing team makes in terms of a larger structural company story.

But maybe the answer for us lies in the Tech Crunch article by Steven Hillion, who argued intuition guides analytics and analytics inform intuition.

I decided to start by asking my coworkers, who were equal parts informed of current trends as well as creatively thinking towards the future.

After all, who better than to make e-commerce predictions than the eComm marketing experts themselves?

Justin, Director of Business Performance and contributor to Kissmetrics, Shopify and more, had quite a few ideas:

ecommerce trends 2016

Doug in Product Marketing and Yoav from Optimization both brought up issues related to customer experience. Specifically, the rise of new trends in delivery.

ecommerce trends 2016
ecommerce trends 2016

While Pola, our Director of Content, video whiz, and storyteller, gave her input:

ecommerce trends 2016

I did a lot of thinking about these suggestions and strategized how I could tap into our database of over 120,000 e-commerce stores to see if there was data to support these hypotheses.

To start, I broke the trends down into a few overall ideas.

Screen Shot 2015-11-10 at 2.16.25 PM

Then, I put the list aside. I didn’t want to go searching for a fact to match guesses, I wanted to find intersections of expert predictions and unbiased data.

Our 2015 benchmark report took a look back at the top trends in e-commerce over the course of the last year.

I combed through to see whether any of the major issues we touched on could give clues as to what to expect in 2016.

And here’s what I found:

1) Direct marketing channels will beat out social media

Justin’s prediction was obviously true right off the bat (not so surprising, considering he is a data diehard).

All I had to do was a quick look at overall traffic sources for our users to see that social isn’t in its heyday anymore.

True to Justin’s prediction, direct and referral traffic were overwhelmingly the most dominant traffic sources in 2015, with 74 percent of e-commerce visits coming from these sources.

Social gets a lot of hype, but today, it only makes up six percent of the total traffic for e-commerce stores.

However, that’s not the whole story. You may not be getting enough social traffic because you aren’t measuring it correctly: it’s impact is often difficult to track.

Plus, although social makes up a smaller percentage of overall traffic, the traffic you do get from social is highly valuable, especially if combined with social proof.

ecommerce trends 2016

But from the data on overall traffic, we can gather that direct marketing such as email or one-on-one techniques will be important focuses in the current year.

But, when looking into this data, I found something else related that piqued my interest.

According to a graph summarizing the distribution of mobile vs. non-mobile page views, traffic source plays a major role.

ecommerce trends 2016

As we all know, in 2015, mCommerce and mobile marketing strategies really became a thing, with huge portions of e-commerce traffic coming from mobile devices.

So what’s next for 2016? Next year, it’s no longer enough to just be mobile optimized or have a mobile marketing strategy.

Marketing is going to need to be more specific than ever, not just catering to device type, but also to traffic source.

As you can see from the data above, it’s not as black and white as breaking traffic down into mobile or non-mobile.

Some sources – particularly social networks – have higher mobile visits. Yet Reddit and LinkedIn, which are both also places where people connect socially, have an enormously high percentage of desktop visits.

2016 will bring changes like specific campaigns for LinkedIn geared towards desktop visitors, Instagram strategies built to be mobile, and investing in specific ad campaigns for Facebook, depending if the visitor comes from mobile or desktop.

What does this mean for you?

In 2016, marketing is going to be more specific and direct than ever, whether that means creating content for customer lifecycle stages or defining goals based on traffic source and mobile device.

2) Marketing and sales tactics will move to delivery and doorsteps

Yoav and Doug brought up the ideas of how changes in delivery style will impact e-commerce.

Self-driving cars and drones have been predicted to impact e-commerce since their development, but the impacts for the majority of the industry have been minimal so far.

Innovation in the transportation industry will increase the competitiveness to deliver quickly and cheaply, but research says the full repercussions of this won’t be felt until 2017 or 2018.

What’s more important is not the new delivery methods, but how marketing and sales tactics will keep up as stores rush to bring the best store-to-door service.

For this, we don’t have data, but we do have real examples.

Let’s take a look at two, the first being Amazon trying out Amazon Prime Air. This is a cool step forward, but more than how technology is impacting delivery methods, it’s important to look at why these changes are taking place.

Amazon Prime is a way for Amazon to increase customer loyalty. Offering their customers the quickest delivery methods is simply a byproduct of marketers wanting to get ahead of the crowd.

For another example, look at how companies like Trunk Club bring packages with no strings attached. This is another method sprung from sales and marketing. Their goal is to get you to buy and to take away any purchase anxiety.

A need for more cut-through marketing and sales – not transportation innovation – will determine whether new delivery methods are instituted or not.

Similarly, in 2016, tactics like upselling and signing customers up for loyalty programs will no longer be online specific – they’ll also happen at the door.

Marketing and sales need to look beyond the in-store and online experience and consider the delivery experience as well.

Over the past five years, the world has seen an enormous rise in e-commerce sales.

Around the globe, e-commerce sales continue to rise, and as e-commerce sales continue to increase, more businesses will fight to get a piece of the pie.

The competition is getting bigger, and as a result, brands are becoming more reliant on analytics and optimization to win critical battles over their competitors.

Take a look at how Google searches for e-commerce analytics have risen over the past decade.

ecommerce trends

And guess what is the country searching for it the most? India.

Just as Justin predicted, India and China have become strong players in the e-commerce world (if you need any data to back that up, consider how Alibaba sold $1 billion in eight minutes on Singles’ Day this year).

Next, expect to see the emergence of e-commerce in Africa and other new markets.

4) New media and authenticity will replace marketing gimmicks

Both Pola and Justin mentioned content marketing. Specifically, how storytelling and forms of new media are changing the face of what consumers expect from online brands.

Brands who are leading the herd all have one thing in common: they’re not trying to build artificial conversations with customers anymore.

Look at how big brands like Lulelemon, Lay’s and Lowe’s have begun creating genuine connection with customers through UGC.

They’re joining in on the conversations customers are already using, and a rising trend we saw in 2015 that shows no sign of slowing down is the use of UGC to share authentic stories in marketing.

As Tomer Tagrin explained in Why UGC is the future of e-commerce Content Marketing, UGC is no longer going to be just a content marketing tactic – it’s going to be central to every brand’s marketing strategy.

This is directly related to a rise in the importance of the story behind the products.

People are seeking authenticity from brands, whether brands like Everlane who disclose exactly how their products are made. Hand in hand with this desire for fair trade, eco-friendly products comes a want for authentic brands.

The data has said it time and time again: The number one thing consumers want today is honesty.

UGC is a way of connecting with customers not in a contrived way. In 2016, top e-commerce brands will connect products to an emotional story – through authentic content and information.

➀ This post originally appeared on Yotpo

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