Four new trends in the US e-commerce market in 2016

eMarketer & Forrester predict that US e-commerce companies will sell $355 billion to $393 billion worth of products in 2016. They also estimate that by 2018, e-commerce companies will have revenues of $500 billion.

For brands to gain a foothold and capture a share of the market, it will be important to upgrade existing business, marketing and sales strategies to cater to the needs of modern consumers. Changes in purchasing behavior and technology have greatly affected the way people shop; companies that embrace these changes rather than resist them will be more likely to win the favor of consumers.

Here are four emerging trends that are likely to impact the relationship between brands and consumers in 2016, along with some advice.

Subscription sales model: Regular consumer products create predictable revenue

Between 2010 and 2012, subscription-based fashion brand BeachMint raised $75 million from investors who were betting on a business model where consumers paid a fixed monthly fee to receive a gift from BeachMint that was carefully wrapped. With other retailers simply waiting for customers to come back, BeachMint’s business model was attractive. It promised that shoppers would be happy to pay a fixed monthly fee to have new and exciting gifts delivered to their doorsteps. But over the next two years, BeachMint struggled to survive, eventually merging with Condé Nast’s Lucky Magazine. ShoeDazzle, another once-hot startup, suffered a similar failure in 2013. It seemed that subscriptions weren’t working for e-commerce brands. If fame and money couldn’t create a financially viable venture, what hope was there for other businesses?

While there are many examples of failure, Dollar Shave Club and Naturebox have succeeded. In 2015, after claiming to have successfully broken through the bottleneck of the e-commerce subscription model, the two companies received $75 million and $30 million in financing from top investors respectively. Seeing their success, we can predict that many new brands will follow their business models.

Of course, for many existing brands, there is an easy way to start subscription sales without having to transform their existing business models. For example, Amazon launched the "Subscribe and Save" service. With this service, consumers can receive the products they need on a regular monthly basis and enjoy a 15% discount on each order. For many shoppers, just click to subscribe, which is simple and convenient, and they can also get a discount. For brands, this is a perfect way to earn predictable turnover and greatly increase the lifetime value of customers.

Strengthen marketing content creation and promote to potential customers

For many years, content marketing was all about IT. Unfortunately, many people didn’t understand what it meant to execute an effective content marketing strategy. Some brands just blindly published blogs and conducted video campaigns without considering how to effectively promote their brand story. As a result, many companies spent millions on marketing but failed to tap into real customers. This year, as marketers discovered the importance of promoting brand content, we can see that many brands that have already started to promote have changed their appearance to attract the attention of real customers.

Kyle Geib, Threadless's marketing and social media expert, has decided that 2016 will be about not only creating engaging marketing content, but also promoting it to interested consumers. "For us, 2016 will be about content creation," Geib said. "The goal is to attract people to Threadless through interesting and novel content, thereby strengthening the Threadless brand. This includes more video creation, publishing more articles or interviews on the blog, and strengthening the visual effects of the Threadless brand. With artists, community members and a global audience, we have many opportunities to discover interesting and diverse stories about art and culture. The marketing budget will not only be used for content creation, but part of it will also be used for paid links to promote marketing content to the right audience.

How brands can take advantage of this trend: Therefore, since e-commerce companies must create attractive, inspiring or reliable marketing content, they must find the right way to promote the carefully created marketing content to potential customers. However, due to the lack of advertising budgets for dedicated promotional content, e-commerce companies can also add visual marketing content to product pages - video images.

Offline physical stores drive online transaction growth

Touching, feeling and using a product before buying it can give consumers greater peace of mind. While detailed product descriptions, good customer reviews, high-definition images and product demonstration videos are all effective ways to get consumers to place an order, some brands’ products sell better when consumers experience them in person.

Since 2013, e-commerce giants Bonobos and Warby Parker have expanded their businesses offline from digital platform retailers. Within a few years, the two companies have opened dozens of physical stores, proving that e-commerce products can be sold well both online and offline.

The benefits of opening a physical store are not so obvious. Although the traffic in a prosperous area can bring new orders, a consumer who hesitates to place an order online may buy the product after entering the store or sample room. In addition, consumers can choose to place an order online and pick up or return the product in the physical store. Every time a consumer enters the physical store, they can learn more about the product and may buy it while viewing it.

How brands can take advantage of the situation: In order to reduce risks, many e-commerce brands have begun to launch short-term rental "pop-up stores". The location should be selected in places with large customer flow. After the success of the "pop-up store" operation model, brand companies will have enough confidence to open long-term fixed physical stores. The location selection problem of "pop-up stores" is easy to solve, and you can find relevant information from Storefront. Storefront is an event venue supply market that has helped more than 20,000 brands rent short-term stores with large customer flow.

Developing virtual reality technology

When shoppers are reluctant to leave their homes to make purchases, virtual reality applications can allow them to experience the feeling of in-store shopping at home.

To take the guesswork out of buying cosmetics, L’Oréal introduced Makeup Genius, an app that offers four incredible features:

“Show you the makeup effect in real time”

“When you move and make expressions, the makeup stays on your face”

“You can try countless cosmetics and experience different makeup looks”

“You can experience the makeup effect anytime and anywhere before purchasing the product”

Instead of imagining how a particular lipstick will look on you, you can try it out—along with hundreds of other products to try and compare—through the Makeup Genuis app. The best part? No need to remove your makeup. Amazingly, in less than two years, the app has been downloaded more than 14 million times. Corey Epstein, co-founder and creative director of DSTLD <https://www.dstldjeans.com/>, predicts that virtual reality shopping experiences will be very popular in 2016. As technology advances, consumers are demanding more innovative apps that facilitate online shopping, making it more real and trustworthy, if not more than shopping in a physical store.

How brands can take advantage: Because most VR technologies are still in the early stages of development, it’s hard to predict how developing common, cost-effective VR technology will boost shopping for most brands and their consumers. Oculus Rift VR headsets are now available for pre-order. But it’s too early to tell what Facebook’s new invention will bring and how it will affect e-commerce in 2016.

Compiled by Hugo.net