Happy Weekend! E-commerce Weekender is a collection of our favourite e-commerce news of the week from BI Intelligence, Business Insider’s paid research service.
LUXURY RETAIL IS MOVING ONLINE IN CHINA: Luxury brands and products are shifting their focus to online retail sites in China. High-end retail is already a mature market in China, being the fourth-largest market for luxury shopping in 2014, reports Euromonitor International. Additionally, about 45% of Chinese consumers intend to buy high-end luxury items over the next three years, according to a survey from Bain Consulting. Typically, luxury brands have been resistant to engage customers online in order to keep up exclusivity of the items. However, this focus is shifting in China to increase their digital presence.
China’s biggest name in e-commerce,
the Alibaba Group, is investing $US100 million in Mei.com, a site for daily deals on luxury items and high-end fashion brands, reports Reuters. Alibaba currently offers multiple e-commerce platforms, including its own “flash sales” site, Juhuasuan. However, its foray into luxury brands has been limited so far. Alibaba’s plans for Mei.com include expanding its user base, brand cooperation base, logistic services and IT infrastructure services, according to the company. Additionally,
China-based luxury online retailer Secoo raised $US50 million in a financing round led by Ping An Insurance. The insurance company also owns Lufax.com, an online investment site that connects individual investors with small businesses trying to raise funds.
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VIRTUAL SHOPPING WILL CHANGE THE E-COMMERCE EXPERIENCE: Online retailers are increasingly coming up with new ways to make the at-home shopping experience as entertaining and comprehensive as going to a brick-and-mortar store. Facebook, Samsung, HTC, HP, and other large tech companies are hard at work developing virtual reality headsets for consumer use. Most of the attention on virtual reality devices to-date has been centered around its impact on the gaming and media industries, but they could also have a major impact on how people shop, according to a 2015 survey conducted by Walker Sands. Thirty-five per cent of the survey respondents said they would be open to purchasing more online with virtual reality since it will be a more realistic feel of the product remotely.
Japanese online retailer Rakuten recently acquired virtual shopping business, Fits.me, a London-based startup that develops “virtual fitting rooms”, reports the company. Fits.me allows online shoppers to create an avatar with their exact measurements to better see how an article of clothing might fall on their body. The virtual fitting rooms give the customer the ability to more accurately visualise how a product would look, and gives them confidence to buy online.
FACEBOOK INTEGRATES SHOPPING ASSISTANT FEATURE WITH MESSENGER APP: Personal assistant systems like Siri, Cortana, and Google Now have been marketed as the best way to get something done on a smartphone with minimal effort. But even though you can schedule a dinner date or get directions to the nearest movie theatre, AI personal assistants focus mainly on productivity and cannot complete more intricate tasks when it comes to consumer interaction with the e-commerce industry. And the vast selection of retailers and products online has made sifting through all of the options a laborious task for consumers. Thus, the space for digital assistant platforms that help with this process is open and growing.
Facebook is launching its own assistant platform called Moneypenny that will run as part of Facebook Messenger, reports Forbes. Instead of using AI technology,
users can message a real person to help with researching and buying different products and services online. Little else is known about what Facebook plans to bring to the table with Moneypenny, including how it will charge customers and when it will be launched. Moneypenny is not the first to do this, though. It will directly rival Magic, an on-demand concierge service that works through text messages. Users anywhere across the US can text a real person at Magic to complete a variety of tasks, like booking airline tickets and ordering groceries for delivery.
See some examples of how Magic works:
AMAZON LEVERAGES ONE-DAY SALE TO DRAW IN NEW CUSTOMERS: Amazon’s 24-hour summer sale for Prime members, called Prime Day, appears to have been a major success for the online retailer. Product orders exceeded that of last year’s Black Fridaysale which was open to all Amazon customers (not just Prime members), reports the company. But the purpose of Prime Day wasn’t so much about generating a large influx of revenue in the short term as it was about generating awareness about its members-only shopping program Prime. Shoppers were able to participate in Prime Day without a subscription by signing up for a free trial, which allowed them to experience all of the shipping perks and discounts that members experience on a daily basis.
In fact, Amazon likely lost money on Prime Day because of the steep discounts, but that risk could pay off in the long run by converting more shoppers to Prime memberships. Members of Prime who spend more money on Amazon on average than non-Prime members, according to a report from Millward Brown.
- Prime members spend about $US1,500 with Amazon each year, while non-Prime members spend about $US625 with the retailer annually.
- Prime members are also much less likely to shop at other retail websites in a single shopping session than non-members.
GROCERY E-COMMERCE IS PICKING UP IN CANADA: Consumers in Canada are increasingly turning to the web to shop for groceries, and now institutional retailers like Walmart and Metro are stepping up to meet the demand.
Walmart Pickup, the retailer’s online grocery ordering service, launched last week in six of its Canadian store locations. Walmart plans to make the service available at an additional five store locations in Canada later this month. Walmart Pickup allows shoppers to order groceries through Walmart’s Canadian website Walmart.ca and then the retailer’s store associates will pick and pack the items for the customer to pickup. Orders must be placed 24 hours in advance and exceed $US50. Walmart has a similar program in the US called simply Walmart Grocery.
In another sign that online grocery sales are heating up in Canada, Canadian supermarket chain Metro is claiming to have released the first grocery shopping app for the Apple Watch, according to SupermarketNews. Customers can use the app to manage shopping lists and opt-in to receive digital coupons and offers. Apple started shipping the wrist-wearable device in April, and approximately 3 million have sold to-date, according to Slice Intelligence.
As retailers expand their grocery shopping offerings, we’ll likely see more consumers buying food and beverages online. Currently, 12% of consumers in North America say they already order groceries online and an additional 55% say they would be willing to try, according to Nielsen.
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Disclosure: Jeff Bezos is an investor in Business Insider through hispersonal investment company Bezos Expeditions.
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