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Digitalization or death: how Russian retailers fit into the new realities of trade

Venera shaidullina talks about trends in the digitalization of e-Commerce and offline Commerce, gives 5 of the most promising technologies that will have a strong impact on e-commerce in the near future, and gives advice to Russian entrepreneurs on how to get competitive advantages in the new environment
New digital technologies in e-Commerce

Global retail sales in e-commerce in 2018 amounted to approximately $ 2.5 trillion, according to forecasts for 2021, their volume will grow to $ 4.5 trillion. The world of digital marketing is developing and changing very quickly due to the global spread of Internet access: both mobile and fixed. And modern information technologies are used on both sides: both by the consumer and the seller.

User search history and customer needs are the most unique values. Every marketplace is looking for a key to the consumer’s heart. It consists in establishing a strong trust relationship with them on any platform, not only in the online space, but also offline, using personalization and artificial intelligence technologies.

What kind of buyer is he

This is a basic question that should be answered by any company that offers its product and expects an interested customer and a high level of sales.

Modern buyer:
looking for an excellent product at an affordable price;
focuses on reviews in social networks;
he doesn’t like to wait long for this product to be delivered to him.
This is why the click and collect model is often used, which allows you to get a product in one of the stores in the network or postamate. And if the received product does not match the one that the buyer viewed, the seller will immediately get into his “black list”.

People are willing to share their impressions of the purchase on social networks with friends and subscribers and like to criticize low-quality things. The consumer path has noticeably lengthened. The customer constantly runs between online and offline stores, changing several more platforms along the way.

If you want to own a product, you don’t have to buy it. The economy of exchange is very attractive: you can take a loan or rent, just exchange goods or services, while significantly saving money and not harming the environment.

Technologies in online retail adapt to the modern consumer and try to create a comfortable area for him to make a purchase. Let’s look at the most promising, in our opinion, innovations in this area.

Wearable devices

These are smart fitness bracelets, watches or glasses, the number of which is projected to increase to 650 million by 2020, and smartphones, by the way, will become more than 2 billion. Wearable devices transmit information not only about the location of a person, but also save their daily route, note the state of health.

Large retail chains have launched an experiment to use web beacons with built-in sensors-Bluetooth Low Energy beacons. When approaching a store at a certain distance, they transmit a signal to the smartphone, and the mobile app displays a message about a personalized discount.

This is how predictive Analytics develops to help you choose a product that takes into account the characteristics of each client.

Digital assistant

These are Siri, Google, and Alexa (from the giant retailer Amazon), which do not call for purchases, but help you navigate store offers. They can find the right product, re-order it, track the status of the order, and so on.

Augmented reality

Augmented reality technology-AR — is a good driver for e-Commerce. It combines the advantages of the virtual and real world. Offers the buyer to evaluate before buying how the desired item will look on him or in his home.

In 2017, the Swedish company IKEA launched the Place app. It allows you to “place” your favorite furniture in your interior and choose the appropriate option. We were especially pleased with the owners of small houses, where the importance of every inch. Amazon has a similar View service that not only presents furniture, but also thousands of other products. On the Russian website you can try on glasses. Loreal offers a ModiFace app that will show you how your face makeup will look with your favorite cosmetic products.

AR fitting rooms significantly reduce the number of return purchases. In 2018, they created a market of more than $ 1 billion. Offline stores, such as Burberry, have also chosen this technology to create showrooms.

Chat bots

Communicate with the buyer is still in the symbiosis of the machine and the person. With the help of artificial intelligence algorithms, they are constantly learning and becoming more and more perfect. Some of them successfully solve problems and carry out financial transactions.

Chatbot in messenger makes you click on a link in 40 % of cases, and in email-mailing it is only 1-3 % of recipients. Facebook uses Facebook Messenger chatbots, which have become one of the leaders in the “client-brand”chat. After all, social networks are very important when a person makes a purchase decision. They give companies 15 % of customers according to Gartner research.

Mobile Checkout

Mobile payments have shown rapid growth since 2015, but they will not be able to replace the cash flow. The maximum that they can claim is 30 % of the money turnover. The number of payment platforms increases, they are combined with each other (Google Wallet and Android Pay), there are offers from banks (Chase and Softbank). Bitcoin and other cryptocurrencies cause great controversy, but do not stop developing.

Voice search

This is also an e-Commerce driver, and not only on mobile devices. A quarter of consumers already used Amazon Echo or Google Home in 2017, and another 20 % intended to buy a voice-controlled device in 2018. And this is the most loyal audience with a stable income.

It won’t be long now

In order to become a sales leader, successful entrepreneurs use modern digital technologies, while at the same time looking at forecasts for the future. The center for research and expertise of the Department of PRED of the Financial University under the government of the Russian Federation has compiled the TOP 5 most promising technologies that will change e-commerce in the near future:
Mobile rewards programs. The standard plastic loyalty card lacks gamification elements (entertainment) that create communities and a great platform for communication around a product or service. The future is in the smart card stored in the mobile wallet.
Virtual avatar. Russian companies have already started using scanning of people. In the future, your own 3D model will be perceived in the same way as selfies are now. The avatar will easily show you what a particular thing looks like on us.
Native advertising. Natural advertising (not to be confused with hidden advertising!), which is considered with the interests of the user: does not bother, does not deceive, fits perfectly into the content. Creating it is an art that has not been fully studied, with a huge viral potential and a flexible format.
Internet of things. Store operations are optimized by devices that analyze the level of demand. Transmitting information without human intervention in smart devices will not only monitor their status, but also automatically replenish resources using the product order button.
Virtual storefronts. Special applications for storefronts make them interactive. Nothing is easier: you just need to touch the image to start interacting with it.

What to do to the Russian business?

A few tips for entrepreneurs on what to do to have a competitive advantage in a digitalized business environment:
Instant response to an order and round-the-clock free delivery is the key to the consumer’s heart. Amazon already has a Pickup service for instant purchases. 2 minutes after placing the order-the product is already in your hands!
Positive emotions from the purchase are the most powerful incentive for another order. Digitalizing your business should not be mindless. Innovation for innovation’s sake is the wrong approach to this process. Direct your efforts to ensure that the buyer gets the maximum pleasure from the purchase. Remember that the speed of order processing and service, the ability to quickly exchange purchases and refund funds, online consultations, and so on significantly affect your business.
Tracking the buyer’s route is the first necessity. The number of devices and points of contact with the client are increasing. The seller must ensure that the goods are received in a way that is convenient for the customer. And the price should be the same, regardless of where the order was made: via social networks, website, app or offline point.
Respect for personal information. Personalization must have limitations. People understand that the comfort of consumption is sometimes too expensive, because they have to pay for it with the most valuable: a protected personal life.
In the process of digitalization, do not forget about the old. You can also use old marketing techniques to promote your business. For example, IKEA and H&M use programs to accept used clothing and old furniture, offering a discount for this.

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