Brave New World for Online Retail: 3 Trends to Watch in 2014

By Ian Thiel | Small Business

Brave New World for Online Retail: 3 Trends to Watch in 2014 image online retailBrave New World for Online Retail: 3 Trends to Watch in 2014

It’s mid January, the time of year where the top retailers are convening under one roof at the National Retail Federation Convention and nearly every company with anything to say is outlining for you, the reader, their predictions for 2014. It’s common knowledge at this point that most companies keep under lock and key a crystal ball that is deployed only once a year.

Brave New World for Online Retail: 3 Trends to Watch in 2014 image mobile ad revenue explodesBrave New World for Online Retail: 3 Trends to Watch in 2014


There’s no crystal ball here at Optimizely, but we do have access to something I daresay is a bit more interesting: data.

At the time of this writing, our 7,200+ customers have run upwards of 380,000 experiments, delivering 4.4 billion optimized experiences worldwide. Both quantitatively and qualitatively, we have learned much in these past few years, especially about the world of online retail.

For online retailers, 2014 will be a year of getting acquainted with mobile, learning from the web-first retailer and using big data to delight customers. The retailers who approach these trends via optimization and testing will have a lasting competitive advantage.

Mobile as a primary touchpoint

The first trend is mobile as a primary touchpoint. As Eric Schmidt noted recently, “The trend has been that mobile was winning; it has now won.” Internet Retailer, an authority on such things, states “…mobile commerce in the U.S. is now mainstream commerce.” I can quote a few more authorities, but suffice to say this is something you should already be aware of, especially as an online retailer.

Why online retailers must care about mobile

The group of consumers connected to a mini computer in their pocket is growing—rapidly. mCommerce has become a primary part of the purchase experience for online and brick-and-mortar retailers.

“Retailers have to continue to invest to make sure they get their mobile offerings right, or will increasingly risk alienating customers and leaving significant money on the table, ” Vicki Cantrell, the executive director of said in a 2013 article on Internet Retailer.

The portrait of the mobile consumer is evolving just as rapidly as it is growing. Consumers ready to shift loyalties if their expectations are not met on mobile devices. Missteps in designing mobile are costly, which is why experimentation is key.

The intersection of mobile and optimization

In 2014, e-tailers will need to work hard to understand how the mobile context affects the consumer.

The consumer uses a mobile device to research, purchase and compare items from a number of different places ranging from in the store to on the couch. Should the mobile experience be the same for each of those various contexts?

Applying methods of conversion rate optimization (CRO) through A/B split and multivariate testing will enable brands to understand evolving consumer behavior and profit like they should from this mobile explosion. Testing exists for brands to learn about the experience their customers are having and improve it.

The brands that make CRO and personalization part of the mobile design process will be better equipped to design experiences that meet the consumers’ needs.

Leverage mobile web testing to improve everything from category pages to detail pages. Target offers, and personalize experiences by geography and device type. Testing gives you insights into how your customers are interacting with your mobile site.

The proliferation of the web-only retailer

The second trend to watch in 2014 is the emergence of the web-only retailer. Broadly speaking, there are two types of online retailers: those who came into existence online (think Amazon and Zappos), and those who started with a physical brick-and-mortar store and expanded to an online store (think Target and Wal-Mart).

Online-only retailers have been shaking things up for a few years now. Amazon is web-Walmart. Warby Parker and Bonobos—two niche web-first retailers—are both making headlines as next generation retailers reinventing the consumer experience. Consumers live online, and retailers that understand this and meet the consumer there, will profit.

The more brick-and-mortar retailers can learn from what has made online-only retailers thrive, the more successful they will be in 2014.

Web-only/web-first retailers are some of the most prolific testers. They were born online, and they know what works. If they didn’t, they wouldn’t exist at all.

The application of small data

I’ll wrap up by saying that 2014 will be a year for online retailers to think about big data in terms of small data loosely joined and targeted. Economist and co-founder of the Open Knowledge Foundation, Rufus Pollock and others have suggested “…the real revolution is small data, loosely joined.” In 2014, the brands that understand how to leverage the “small data” they have about their online customers—i.e. their location, if they new visitors or returning visitors, if they have an item in the cart—will be best poised to retain, delight and profit from customers.

What the hell does that actually mean? Here’s an example of a retail brand that acquired a smartphone app to forge the epitome of a data partnership.

Under Armour’s acquisition of the hugely popular fitness app, MapMyFitness gives the athletic apparel company access to data—a lot of data. Data their competitors don’t have. Specifically, Under Armour now has billions of data points on how 9 million active users work out. They can figure out where different cohorts work out, whether they swim or run, prefer morning or nighttime workouts and innumerable other traits.

All of these ways to slice and dice MapMyFitness data gives Under Armour ammo to leverage to their own retail benefit. Show swimwear to users who prefer swimming, cold climate apparel to users in winter climates. In other words, Under Armour can use all of these segments of small data to personalize the experience and show customers the right ads/content/messages at the right time.

Small data loosely joined enables online retailers to deliver targeting and personalization like you’ve never seen!

The magic of the web means you have access to mountains of data not accessible in the brick-and-’mortar world. Although not always Big Data scale, this “Small Data” can be equally powerful.

In 2014, retailers will begin to recognize their data as an asset, not so different from their inventory, personnel, and brand. Using the data they have to make decisions will give next-gen retailers the competitive edge; ignoring this trend will be the subject of many a b-school case study.

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