E-commerce is set for significant growth this year. According to the Adobe Digital Index 2015 Holiday Shopping Predictions,1 2015 U.S. Holiday Season sales i.e., sales during November and December, will grow to an all-time high of $83 billion – an 11% year-over-year increase.
Meanwhile U.S. online sales on November 30 – Cyber Monday – are forecasted to see a 12% year-over-year increase, climbing to a record $3 billion in one day. Certainly nothing when compared to 11/11, or Singles’ Day2 in China this year, when $14.3 billion in goods was sold through Alibaba’s online sales platform – but not bad!
Yet, for most retailers e-commerce continues to face significant challenges and missed opportunities because the end game boils down to converting online visitors into buyers. As per industry analyst Monetate3 in Q4 2014, a mere 2.84% of online visitors to retail e-commerce websites actually bought anything. Also, analysis of traffic patterns showed that less than 1% of shoppers on mobile devices actually made a purchase. Even when online shoppers added items to their carts, two out of three – or 66% – did not end up completing the transaction.4
Worse, despite billion dollar investments by Wal-Mart and Target in building up their retail e-commerce infrastructure most U.S. consumers prefer Amazon.com as a shopping destination. A recent Reuters/Ipsos poll,5 found that 51% plan to do most of their online shopping at Amazon this holiday season, compared to 16% at Wal-Mart, 3% at Target and 2% at Macy’s. So, Amazon.com is not just winning the war online – but also managing to steal in-store sales from brick and mortar retailers as well. As per a November 18, New York Times article, “Amazon has built more than 100 warehouses from which to package and ship goods and it hasn’t really slowed its pace in establishing more.”6 Not to mention the success of its Prime Service that has garnered millions of subscribers with its unlimited “free” shipping at $99 per year.
At MarkLogic, we’ve identified three major pain points that are holding store-based and pure play e-commerce retailers back:
- Handling product data complexity –The inability to provide consumers with the right selection they seek and dealing with the “Long-Tail” as efficiently as Amazon.com
- Dealing with the nightmarish search experience most consumers face –Simply put, the average consumer can’t find what they are looking for online. Most retailers restrict the number of attributes or facets a consumer can search on to around 25 while consumers schooled on Google want to look for products a million different ways
- Context to data online –Consumers are looking for solutions, whether that’s finding a recipe for dinner or buying an entertainment system online. Most e-commerce sites offer little context or sensible recommendations with respect to product linkages (i.e., What cable or sound box goes with the Samsung HDTV I’m considering?) or allow comparisons between products along attributes consumers consider important
Finally, it’s all about the conversion – and the data integration. My colleagues put together this infographic and slide show that illuminate the pains of winning digital consumers and the benefits of using Enterprise NoSQL to quickly connect online customers with the information and solutions they need.
We’re hosting a webinar that will cover the challenges of personalization on December 2 at 11:00 EST. Don’t miss out on this opportunity to re-invent your business for true profits!
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Sources: – Adobe Digital Index 2015 Holiday Shopping Predictions, October 28, 2015 – China’s Single Day Shopping by Ana Swanson Washington Post, November 18, 2015 – Monetate Q4, 2014 Report – Wal-Mart’s annual report, 2014 – Reuters/Ipsos poll: U.S. consumers favor Amazon for online holiday shopping article in Reuters by Nathan Layne – New York Times article by Farhad Manjoo, November 18, 2015