E-commerce has come a long way since 1976 when Michael Aldrich connected a domestic television via a telephone line to a real-time transaction processing computer and invented what he called “teleshopping.” Now known as e-commerce, the business of online buying is thriving. According to a Statista, in 2017, e-commerce sales reached around $2.3 trillion and is expected to hit $4.88 trillion in 2021.
However, with the advent and expansion of Internet of Things, e-commerce is set to reach a whole new level.
What The Hell Is IoT ?
IoT is the interconnectivity of electronic devices to the Internet, enabling them to exchange information through a wireless communication network. These connected devices gather and share information directly with each other and the cloud, making it possible to collect records and data. Think a refrigerator that tells you when you’re running low on milk, or a car with tire pressure sensors. What does e-commerce have to do with IoT? Everything.
Considering the fact that there will be approximately 25 billion connected “things” by 2020, IoT provides e-retailers with amazing opportunities to increase their revenue and improve the customer experience.
Let’s examine how IoT will take e-commerce to the next level.
#1 Voice Payment
While accepting Paypal and credit cards for payment is great, forward thinking brands are now moving towards voice payments. A recent study by Visa titled “How We Will Pay 2017,” found that more than 60% of US consumers would like to pay for products more efficiently and quickly. And more than 80% have a strong interest in using IoT and connected devices to make purchases. Add these statistics to the fact that 79% of US consumers own at least one smart gadget and you’ll understand why consumers are ready to say goodbye to punching their credit card details on your website and hello to payment with voice recognition systems.
In fact, data from a BI Intelligence survey states that already, 8% of adults in the United States have used a form of voice payment at least once to make purchases—including using their vocal cords to complete transactions through Amazon’s voice-recognition systems. In addition, the survey states that in 2022, 31% of adults in the United States will have used some form of voice payment system.
Smart brands aren’t sleeping on this information. Currently, Walmart, Target, Costco, and Home Depot have teamed up with Google for voice-assisted shopping. These brands aren’t hooking up with Google just to feel good. They’re getting paid. According to Google, retail partners saw the average size of a customer’s shopping basket increase by 30% after joining the program. Specifically, Target’s initiative, which has been live for about six months, says its Google Express shopping baskets increased nearly 20%, on average.
Consumers want a frictionless payment process, and with smart devices, you can give them a smooth checkout process and increase your bottom line.
#2 Drone Delivery
If your price is great but your delivery time takes more time than it does to bake a cake and eat it, you won’t have a future in the world of e-commerce. According to the 2017 State of E-commerce Delivery report, over half 54% of online shoppers say they want e-commerce sites to offer one-hour delivery in metropolitan areas. And 59% of consumers say they buy more frequently from e-commerce sites that offer a faster, easier, and fault-free delivery experience.
Here’s a peek into how innovative brands are using IoT to speed up delivery with drones. Chinese e-commerce conglomerate Alibaba, recently claimed to have used drones to deliver six boxes of passionfruit from Putian in China’s eastern Fujian Province to the nearby Meizhou Island. The boxes’ combined weight was 12 kg. The drones covered the distance of five km in nine minutes, flying into a strong wind. Amazon is testing Amazon Prime Air in several international locations to get goods to customers in 30 minutes or less. The company is experimenting with drone deliveries of packages that weigh up to five pounds, which makes up nearly 90% of what it sells.
While China has granted some companies license to operate drones for package deliveries, in the US, retailers like Amazon, Target, and Walmart, are prohibited from flying more than a few drones and their settings are limited. Major e-commerce players are already testing how drones will give delivery a facelift. Don’t fall behind the times and miss out on what could be a pivotal point in enhancing the customer journey.
#3 One Touch Shopping
The number one reason consumers shop online is because it’s convenient. Slice analyzed digital receipts across a consumer purchase panel of around 4.2 million people. 38% of consumers said they shop online because it’s convenient, with price and selection trailing behind at 31% and 29%, respectively. While improving your checkout process can help you deliver a pleasant online shopping experience, you need to start thinking outside of your website if you plan on being in business for a long time.
As IoT becomes more universal and consumers become more comfortable using smart devices, they’ll expect to buy most products whenever and wherever it’s convenient for them. Consumers may not be interested in going through the hassle of finding products on your website, when they can find what they need with the push of a connected smart device button. Think push to buy isn’t realistic? Take a look at the Amazon’s Dash Button.
The Dash Button is a single-use Wi-Fi enabled ordering device that streamlines the process of ordering a specific product from a brand, and you don’t even need to log into Amazon. While some folks thought Amazon’s idea was unconventional at best when they introduced it in 2015, the retail giant understood one thing, the importance of convenience to consumers. So far, reports indicate consumers love the ease of the Dash button. TechCrunch reported the acceleration of Dash-initiated transactions to four orders per minute in early 2017. Following the success of Amazon’s Dash Button, Wal-Mart recently applied for a patent with the aim of integrating IoT into the products themselves for automatic re-ordering with no user input at all.
Convenient shopping is something consumers will demand in an IoT driven world. E-retailers that use IoT not only simplify their online shopping experience, but also build close relationships with consumers.
The Bottom Line
From voice activated payments, delivery times at “read my mind” speed, and shopping with a push, Internet of Things will transform e-commerce as we know it. If you’re serious about staying in business and increasing your revenue, explore how IoT can give your brand an intuitive and timely edge.