Mary Meeker issued her iconic annual Internet Trends report and, as per usual, it was overflowing with useful insights.
This is a quick primer for retailers on the most immediately relevant insights from this 294-slide deck.
- Discovery is digital. Retailers are so focused on Amazon that – as I’ve said before – the Facebook threat is somewhat under the radar. Discovery no longer happens in stores; nearly 80 of survey respondents reported Facebook as the platform to see new products with nearly 60 percent also flagging Instagram. 55 percent ended up buying a product online after discovering it through social. But 45 percent fell into the nebulous “Never bought/other” category after social media discovery; surely offline purchases are a significant chunk but it’s simply not reflected. Retailers must have a way to measure the number of products that are discovered on social and then purchased in stores – it’s simply too vital a metric to let slide. – Slide 71
- Consumers do want location-based personalization. Google searches that included the phrase “near me” (e.g. “movies near me,” “restaurants near me”) skyrocketed 900 percent – not a typo! – in the past two years (2015 to 2017). This should tell us that consumers actually do desire location-based personalization – so retailers and restaurants have a clear directive to step it up. If this isn’t a call to go forth and make it so, I really don’t know what is. – Slide 192
- Speaking of personalization…brands that personalize achieve higher customer satisfaction scores. Shouldn’t surprise anyone to see Netflix and Amazon on this list. In fact, the list is almost entirely filled with data-driven companies – because consumers are now comfortable with the convenience of personalization. Hell, it’s probably not out of line to say that they now expect it – and then reward the companies that provide a pleasant personalized experience with more positive overall perception. – Slide 191
- A steady decline in food, entertainment and apparel spending means retailers must pull double duty. I can’t say this enough: if you’re providing anything in these categories, you are competing for time in a world where people have a virtually infinite menu of attractive options. As relative household spending in these categories shrinks, retailers might need to offer at least two of the three. Imagine an upscale retailer offering tapas, for instance, and artisan cocktails to browsing shoppers. That’s one element to pursue. – Slide 106
- Artificial intelligence is the sexy future but we’re missing what’s simple and obvious right now. Network growth and better utilization of Wi-Fi are the low-hanging fruit that will improve the customer experience and thus encourage better growth today. Wi-Fi growth and expanded access (rapidly trending upwards toward 500M global networks) mean more of an opportunity to connect consumers’ offline and online shopping habits and preference. Note it’s important to do this in a fully permissioned and transparent way to build trust and loyalty among a consumer base. – Slides 16 and 201
- Offline prices are in slight resistance mode. Online consumer prices decreased by three percent but offline retailers rallied a bit and kept their decline to just one. Brick and mortar, seize the opportunity to capture more in-store margin by capitalizing on convenience to drive greater efficiency. Use technology – like Walmart – to lower expenses and then pass along the savings to customers. They’ll like you for it. – Slides 109 and 112
The must-know numbers:
- We know 93 percent of revenue is captured offline – but consumers say 60 percent of their transactions are online with 40 percent happening in-store. (What’s with the discrepancy? It’s probably a combo of inaccurate survey responses and a high volume of small online purchases coupled with big offline purchases.) – Slide 18
- E-commerce year over year growth is growing but not as impressively as you might think: 16 percent in 2017 versus 14 percent in 2016. It’s also growing as a percent of retail sales (13 percent). – Slides 45 and 46
- But it’s still doing better than physical retail. Brick and mortar is still growing but it appears to be at a rate of three percent a year and online’s closer to 15 percent. – Slide 88
- Amazon still reigns supreme, gaining eight percent in e-commerce share bringing it to 28 percent, up from 20 percent in 2013. All others? In decline, decline, decline. – Slide 47
- But China is clearly an up-and-coming competitor. Alibaba and Amazon both grew at at the same rate (31 percent). And although Amazon’s market cap ($783B) outstrips Alibaba’s ($509B), the latter may not lag forever. Expect Alibaba to continue its play for global retail dominance with aggressive moves and smart acquisitions. – Slide 91
What stood out for you?