Innovate. Breakthrough. Disrupt. However you want to call it, online retailing is continually changing to adapt to consumer demands and technological advances. In the last few years we have seen the rise of flash sale sites and subscription-based boxes as companies improve on catering to their customers. What is next for online retailing though, between now and teleportation in lieu of free shipping? We see a few opportunities for online retailers to expand on existing models and capitalize on the hoards of data available.
Personalized Flash Sales
Flash sales have certainly dominated the scene recently with Rue La La, Zulily and others following their lead as a focus or an aside. Dealing with mounds of inventory and targeting customers ready to make a purchase should provide these companies with piles of data. This data can translate into truly personalized offers with an expiration date that quickly pulls in the customer. 70% of customers make use of coupons delivered to them through email, so outlining a unique 24-hour deal would make customers feel appreciated while generating sales (with a sense of urgency). Another possible extension of this idea is flash sales customized for sufficient localized demand. Either way, eCommerce merchants will increasingly know more about their customers and capitalize on that knowledge to personalize their offers.
eCommerce Integrated into Media
With the introduction of the Fire Phone, Amazon is taking steps to surround their customers with online shopping opportunities around every corner. Literally. With their Firefly function, users can snap a picture of anything and purchase it from Amazon with one more click. Window shopping can now involve money changing hands.
This is just an expansion of eCommerce’s role in our everyday life. There are plenty of spaces available to include online shopping plugs, including digital publishing sites such as Buzzfeed. With Buzzfeed regularly churning out articles such as “19 Reasons the Summer Sucks for Anyone Wearing Glasses” or “21 Things Only People Who Suck at Makeup will Understand,” it’s easy to picture offers for croakies or mascara placed in the articles. They have already begun to feature ‘promoted articles,’ so it is only a matter of time before these promoted articles sell goods with just one more click.
Profit-Optimizing Dynamic Pricing
Amazon, eBay, Newegg, and other online marketplaces promote price transparency to a degree that the average consumer has never before obtained. Currently though, competition sparks this need for price transparency. One company sees a lower price and realizes it must follow suit to stay competitive. This is likely to occur more in commodity-type products, as retailers cannot differentiate themselves when selling those goods. However, as data yields more and more information on resources and consumer preferences, repricing these goods may root itself in economics, instead of competition. With sales and supply chain data integrated, pricing software can determine what the market-clearing price will be for these commodities, and change it accordingly in real-time.
Why bother with a market clearing price? Offering a fair price and keeping up with competition are valid reasons, but business always comes down to the bottom line. And if you’re looking to maximize profits, employing dynamic pricing to find that equilibrium is necessary. Offer a higher price, and with the price transparency we mentioned earlier, do not expect many sales. Offer a lower price and you leave money on the table. Dynamic pricing is a reasonable inevitability for eCommerce because of this mutually beneficial relationship; businesses will maximize profit and customers will trust prices.
These possibilities are well within reach so it should not be long before we see online retailers take advantage of such opportunities. Are there any other innovative practices available for eCommerce players to pursue? Sound off in the comments!
Contributing Writer: Jack Symington