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Back to the future in e-commerce

Two cartoon men are standing on a platfrom with binoculars looking to the past and future

In the iconic Back to the Future film trilogy, high-schooler Marty McFly and eccentric scientist Emmett "Doc" Brown travel back and forth in time 30 years or more using a tricked-out silver DeLorean fueled by a plutonium-powered "flux capacitor" that generates the 1.21 gigawatts needed for time travel.

When it comes to e-commerce and retailing, there's no need to go back that far.

"A growing number of purchases use multiple channels."

Things are changing fast. In the five years since the UPS Pulse of the Online ShopperTM study began tracking consumer shopping behaviors, expectations and preferences, we've seen some truly mind-bending changes. We'll chronicle a few of these here along with some predictions of where things are heading.

Here are five trends that stand out:

1. The merging of online and offline

Customers now have multiple ways to research, purchase, pick up and return products.

"Omnichannel" is the buzzword, but customers don't think about it that way.

They just expect a seamless, convenient and user-friendly shopping experience whether it's in a store, online or leveraging both channels.

A growing number of purchases use multiple channels (38 percent in the 2016 study).

2. The emergence of mobile and mobile apps

Smartphones have become a driving force in online shopping behavior, and not just for research.

Significantly, 44 percent of mobile users in our 2016 study have used their smartphone or tablet to make an online purchase - and one in four shoppers say they plan to shop more frequently via smartphone or tablet in the next year.

3. Smarter, more powerful consumers

Buyers have more visibility into both prices and products, with fewer barriers to getting the information they need to make decisions.

Now, you can comparison shop to your heart's content, just sitting at home.

Five years ago you might just buy something without knowing what others were charging for it.

In our latest survey, 69 percent of respondents say they use their smartphone while in the store to research prices, find a coupon or check product reviews.

4. Broader product categories available online

In the past five years we've seen a significant increase in the variety of products available for sale online.

Almost anything can be bought online now, ranging from mini bikes and go-carts to furniture and appliances. Free returns unlocked many of the categories we're talking about.

Five years ago people felt they had to go to a store to get a good fit, but more flexible returns policies have changed all that.

5. Returns turn into an opportunity

As online sales increase, so do returns.

While once considered a necessary evil, more retailers now see returns as an opportunity to increase customer satisfaction and boost sales - particularly when online buyers can return goods to a nearby store.

In our 2016 survey, 70 percent of consumers say they've purchased additional items while returning something in-store.

Back in 1985 when Marty and Doc set a course for the future, they ended up in 2015.

They found a world with hover boards, flying cars and an instant Pizza Hut.

While those products are still off in the future, Nike has in fact produced the self-lacing shoes Marty was jazzed about.

Here are five predictions that aren't quite so far-fetched:

1. Where we're going, we won't need so many stores

We've paraphrased Doc's catchphrase from the movie, because five years from now stores will be smaller, and dramatically fewer in number.

Some will become showrooms, while others others, virtual distribution centers.

That will turn out to be a positive thing for the surviving retailers, who will be able to focus their resources on improving the tech-savvy consumer's shopping experience.

2. Mobile will become ubiquitous, as will the Internet of Things (IoT)

According to Business Insider you can expect 34 billion devices connected to the internet by 2020, up from 10 billion in 2015.

Your fridge will send a text message to your car advising you to buy milk on the way home.

Very soon, a lot more product ordering will be voice activated; Google is launching a competitor to Echo in a month or two; Apple is expanding Siri as well.

3. Significant international ordering

The 2016 UPS Pulse study shows that American consumers like to shop internationally for unique products (42 percent) and brands (32 percent) that aren't available in the States.

As trade barriers go down, e-commerce will continue to fuel this trend. Marketplaces also will continue to facilitate global expansion.

4. Social media will explode

Social media will play a bigger role in, well, just about everything, but especially in discovering and actually purchasing products.

A lot of commerce is going to be driven by do-it-all instant messaging apps like China-based WeChat, with over 700 million users.

WeChat goes beyond text voice and video messaging - users can pay bills, order goods and services, send money and pay in stores without leaving the app.

We predict that because messaging takes place in real time, consumers will interact with it more readily, and more often, buying within the app direct from micro-targeted "push" messages.

5. Even more predictive analytics.

This is not a wave of the future. It is the future. Facebook, WhatsApp and Instagram already are all under one roof now, and collecting user data 24/7.

When combined with geo-location data, purchasing histories and online browsing habits, retailers will know so much about you, your needs and preferences, they'll know what you want before you do.

And they'll tap you on the shoulder electronically to remind you. The ability to personalize your shopping experience is powerful. As Shakespeare put it, "Past is prologue."

"The ability to personalize your shopping experience is powerful."

The internet remembers where you've been, even when you don't. Like it or not, it's the unassailable truth of modern life.

Or as Back to the Future's Doc Brown put it, "Your future hasn't been written yet. No one's has. Your future is whatever you make it. So make it a good one."

For more details on the many ways tech-savvy shoppers are transforming the retail landscape, download the complete UPS study in an easy-to-read e-book format.

It explores the way digital shoppers have evolved, reviews the latest in channel dynamics and new challenges retailers face.

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About Longitudes

Longitudes explores and navigates the trends reshaping the global economy and the way we’ll live in the world of tomorrow: logistics, technology, e-commerce, trade and sustainability. Which path will you take?

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