LBuy Nowast January Forrester published its “Five Retail eCommerce Trends To Watch In 2011”. Sucharita Mulpuru was Forrester’s lead analyst on the report, which Henry H. Harteveldt and Doug Roberge also contributed to. Now that we’re a little more than half way through the year, I thought it would be fun to look back at those trends and reflect on how relevant each is right now.

Here’s my take below; please let me know what you think of these trends and any new ones you feel should make the list as we head into 2012.


Trend #1: Multichannel e-commerce takes hold.

As more consumers turn to the web for content and shopping, savvy retailers are investing in their multichannel strategies to capture more profits from their web divisions than ever before.  Forrester predicted this trend would continue, especially as mobile devices enable easy web access from anywhere.

My Take: Sucharita and her team nailed it with this trend and I don’t think there’s any e-commerce expert out there who would disagree. To capitalize on the promise of their digital sales channels – whether it’s a web storefront, mobile app or social network – retailers need to personalize the end-to-end shopping experience. The reality, however, is that most are failing to reap the full benefits of personalization by not looking at the whole picture of available personal data, which needs to consider an individual’s real-time shopping intent in addition to their unique tastes and purchasing history.

Check out Baynote’s eBook on this topic: “Eight Mistakes in Web Personalization”.

Trend #2: Tablet commerce explodes.

Because of smartphones’ smaller form factor that makes it harder to buy through a mobile app or website, Forrester predicted tablet commerce (T-commerce) would emerge as the dominant subset of mobile commerce. They also predicted traditional M-commerce would continue to grow as consumers use their phones to take advantage of time-sensitive deals and supplement the in-store shopping experience.

My Take: Baynote’s Online Holiday Shopping Survey published in January 2011 reinforced that 2011 would mark the beginning of a mobile commerce boom. According to Forrester’s new Mobile Commerce Forecast 2011 – 2016, retailers can expect two percent of their online web sales to be transacted through mobile devices in 2011 and seven percent by 2016. While this pales in comparison to traditional e-commerce sales, it’s still a huge opportunity for retailers to generate millions in incremental revenue. As online businesses invest in their mobile applications and websites, effective use of personalization will again be required to take advantage of this opportunity.

Trend #3: Online marketplaces grow beyond Amazon.

Based on the success of Amazon, retailers that compete with them realize offering marketplaces on their own sites is critical to driving up margins and remaining competitive. Forrester expects retailers in verticals such as apparel, toys, and sporting goods, in particular, will continue to build their own online marketplaces to retain some of the market share they may otherwise lose to Amazon.

My Take: I’ve been watching this trend closely since P&G launched its eStore more than a year and a half ago (see Jack Jia’s blog http://www.baynote.com/2010/02/manufacturers-enter-online-retail-game-to-better-understand-customers/). In addition to the obvious margin benefits that Forrester notes, there’s another potentially much larger advantage for manufacturers that develop their own online marketplaces. By observing hot shopping trends occurring on their sites, they can learn from consumers how to better market their products and improve online sales across all e-commerce channels. For example, one of the main goals of P&G’s initiative is to learn about consumer buying patterns and share this intelligence with its retail partners to boost sales on those channels, too.

Trend #4: Conversion marketing will become mainstream.

Retailers use conversion marketing to increase sales while shoppers are on their websites. According to Forrester, innovative e-commerce companies have taken powerful insights gleaned from an individual shopper’s clickstream paths and inferred intent, and applied them to display the right content and products to customers at the right time –  throughout the Internet as well as on their own websites.

My Take: The impact of improved conversion rates can be huge to e-commerce.  I would go so far as to state that conversion marketing has the potential to deliver the most transformative benefits to e-commerce teams over the next few years. On average, online retailers invest more money in acquiring customers to their websites yet most are only seeing 2-3 percent conversions. There’s something woefully wrong with this picture. As pressure mounts for companies to deliver their online shoppers exactly what they want in the moment or lose them to the retailer that can, I predict a lot of innovation and investment will be happening in this area. In fact, Baynote has moved this area to the top of its priority list.

Trend #5: Social commerce hype outweighs the benefits.

According to Forrester at the time of their report, the promise of social commerce was still far more speculative than proven. While every major retailer has developed a presence on a social network, the social tactics benefiting them most at the time were ratings and reviews on their own websites, and social networks ranked dead last on Forrester’s Shop.org survey about customer acquisition targets.

My Take: I agree with Forrester that the buzz around social commerce is disproportionate to the current sales gains from this channel but believe that won’t be the case for long..  In fact, we anticipate that when amplified with personalized offers and promotions social commerce has the potential to boom incredibly quickly, especially now that search engines like Google and Bing are really upping the ante. Historically, search engines have been the primary sales drivers for traffic to sites, so now that they are integrating truly social capabilities that have real disruptive potential, we could see social commerce skyrocket quicker than predicted.

In summary, I think multichannel e-commerce, conversion marketing, online marketplaces, mobile commerce and social commerce are still the top trends mid-way through the year. It’s a super exciting time for Baynote because effective web personalization is a thru-line to being successful in all of these areas. We’re hyper-focused on developing solutions that e-commerce teams can very rapidly and easily deploy to deliver their customers the most personal and relevant online shopping experience and drive up conversions – no matter if it’s on their website, a social network or mobile app.