 Hi, my name is Simone Neely, and I will be talking today about the future of e-commerce. Of course, this is a very lofty subject. Every slide in this presentation probably deserves to have its own presentation. And we won't cover everything together today, but I do hope that this presentation inspires you to think about new ways to help your shoppers meet their user needs through product and to think about where the direction of commerce is going and how far we've come. So who am I exactly? I'm Simone. I am currently the Product Director of Commerce over at CNN. We run a product review site called CNN Underscored. It's an online shopping guide for the best in style, tech, health, travel, and all of the reviews are written by highly educated journalists who do all the research for you to help you make the best purchase decision that you need. Recently, before this, I was a Product Director over at Food Network, HGTV and Discovery, also focusing on commerce. And in a past life, I also worked on product teams at People, Sports Illustrated, Warner Brothers, and Sundance Now. All you really need to know is that I spend a lot of time thinking about how is the world changing in e-commerce space and what exactly can product managers do to solve user needs. And of course, this chat is called the Future of Commerce, but do I truly know the future? Of course not. No one can predict world events or trends or fads or technological advances or pandemics. And also just because something has worked historically in commerce doesn't mean that it always will in the future. But I consider that the fun of working in product is that you're always growing and changing your strategy based on what's happening in the ecosystem. So this chat is really my attempt at looking at the future of commerce as it stands today. A little bit of context about this chat before we dive in too. I just want to clarify that this is really mostly focused on U.S. based insights. We are coming out of a pandemic. There is a rapidly changing state of the world. The U.S. right now is making a lot of strides in getting Americans vaccinated. I think the last stat was about 42 percent of folks are fully vaccinated. And that number is growing constantly with the CDC. Really lessening restrictions in public gatherings and social events and travel. That being said, I just want to be conscious of the fact that the United States is in a pretty different place than many other countries in the world. For example, India right now, the pandemic is definitely pushing the healthcare system to its limits. So I just want to be conscious that I make a lot of generalizations in this presentation about how the pandemic has altered e-commerce, but it's very, very U.S. based. Also, I just want to clarify, of course, the pandemic didn't invent the shift towards online shopping, but it definitely accelerated it. So in points of this particular presentation, you'll see me talk about where the pandemic has had long-term effects in our online shopping behaviors, but also some of the trends that already were in play before the pandemic took place. So where are we right now in the e-commerce space? It's pretty crazy. 150 million people worldwide bought something online for the first time in 2020. You can imagine this is really expanding the overall addressable market of people who aren't even willing to buy something online rather than step into a store. And just in the U.S., the growth year over year in revenue from e-commerce increased 44% from 2020 to 2021. That's versus the 15% increase from 2019 to 2020. So as I mentioned, still years past, the growth of e-commerce has been undeniable, but during the pandemic, it really exploded as people were stuck at home and needed to meet their needs from home and not at the mall. And definitely worth noting that during the pandemic, there were certain industries that profited and others that were hurt and just wanted to call out some of the differences, places like online grocers, food delivery, video streaming, alcohol, of course, and home improvement. All of the things that we really indulged in, I guess, when we were stuck at home really grew during this time. And we've noticed long tail places like online grocers and food delivery actually have sustained a lot of the growth because even though people are now slowly able to leave the house and go out to eat at restaurants or shop at their local supermarket, the benefit and convenience of online shopping for groceries has become undeniable. And now that people have given it a chance, a lot of them are continuing to exhibit that behavior. On the flip side, of course, airlines, movie theaters, cruises, lodging, anything that included gatherings or travel really got hit pretty badly by the pandemic, but they are making their way back. And we anticipate that there's going to be actually an explosion of travel once the restrictions are lifted because people have been stuck at home for quite some time. So a lot of people will be checking off the bucket list of their lives, all the different places that they've wanted to visit, but didn't know if they would have a chance to. Well, now is their chance to. So we'll definitely be seeing a lot of the e-commerce industries shift dramatically over the next even year or so after coming out of the pandemic. And so it brings me to what are sort of the future thinking commerce trends that I'll be talking through today. There are three that really have stuck out to me in the last year that I imagine having really long tail, I guess proliferation down the line. The first is this concept of bringing the brand to the user through targeting. The second is driving conversion through aspiration. And the third is curing shopping analysis paralysis. And I'll dig into each one of these, but I truly believe that these are some major psychological tenants that product managers are using to think about the new kind of e-commerce shopper. So let's go into the first one. The first one is bringing the brand to the user. We definitely live in the age of aggregation. Social media like Facebook and Instagram shopping giants like Amazon, Walmart have really normalized this concept of brand aggregation on online platforms. So when you have every brand possible in front of you, it becomes ever so much more important for there to be targeting and personalization in a commerce experience to really stand out from in store experiences. This is where online commerce can really, really thrive. There are a lot of, a lot of this is coming from a change in just the way that people perceive brand loyalty and the way that people even start looking for products. So for example, searches today, they typically start with the product and not the brand. 63% of e-commerce searches actually start on Amazon today. And only 22% of those searches include a brand name. You can imagine when was the last time that you looked up something on Amazon like buying spinach, you most likely type spinach and not a certain brand of spinach. So definitely there are a lot of different user behaviors and considerations at play here when you're talking about approaching product purchases from an aggregator standpoint. But this isn't just because of the aggregation platforms. A lot of this is just changing in terms of brand loyalty behaviors across generations. So you'll notice in my nifty little timeline here that boomers have probably the highest loyalty where they show to have the highest propensity for preference between private label and national brands while millennials and Gen Z tend to have much less. Millennials in general have low loyalty to brand names and are more likely to save money or invest more in travel and experiences as opposed to material things. And Gen Z, we're just learning things about this new generation of folks born in 1996 to 2012, but they really have the lowest loyalty so far to brand names and price is a really big driver. To them, we're looking at user generated content, word of mouth reviews, really putting trust in people's experiences versus ads. So what exactly does this new kind of behavior mean for product managers? Well, it means that it's really important to bring the brand to the user and not the other way around. We're no longer living in the age of malls where people can go to the store and check out specifically Forever 21 or specifically, you know, people are going to many different stores all in one place online. So we as commerce product managers really need to develop a strong data management strategy that will allow us to bring these brands to users. One of the very obvious methods of this is ad targeting. We know from Facebook and Instagram that these are highly targeted advertisements and a lot of them are very intricate and sophisticated with videos and hotspots and Instagram direct checkout and more, but what they're really doing is they're looking at the content ecosystem that you live in and what are the commerce products that they can recommend to you based on your behavior. A lot of examples of how product managers can use this kind of ad targeting is, for example, cart drop off retargeting if your customer went through your conversion flow but dropped off right before they actually made a purchase. You can retarget them with the same product and say, hey, you loved this t-shirt previously. Maybe you want to come back and reconsider actually purchasing it and pulling the trigger on it. Also, things like recent purchasing behavior, custom audiences, life event targeting, these are all methods that product managers leverage a lot in partnership with marketers to make sure that commerce products are getting the kind of conversion that they're hoping for. Another one that's very, I guess, buzzword, wordy lately, but growing in methodology across all of commerce is, of course, machine learning. Stitch Fix has a really great example of the way that they leverage machine learning to really meet a user need. What they do is they look at client data so they see maybe what your body type is or what kind of items of clothing you wear most regularly during the week based off of your job, then they will look at merchandise data to look at what are the actual features of the clothes, and then they'll also look at the feedback data. They look through all of the reviews of all of their customers on particular items as well as your particular preferences of how things fit on you. Between this, they use all of this data to power machine learning algorithm that really connects you to clothes that are perfect for you. Some other examples where product managers are using machine learning is for recommendation engines, marketing and homepage personalization, and also sending coupons to folks who might be your highest lifetime value customers. There are a lot of ways to leverage machine learning once you have that data management strategy in place. And then lastly, sophisticated filtering. This is a pretty obvious one, but one that has really grown in not just importance, but sophistication and intricacy in the last few years. So one of my personal favorite examples is Wayfair. They have 22 million products across thousands of brands. And if you buy a couch from Wayfair, when somebody asks you where you got it, you likely will say Wayfair as opposed to the actual brand that Wayfair is selling. And that's because Wayfair really helps you filter down by every imaginable characteristic. Design, color, price, the different features, which direction the sectional sit in, whatever it might be for your couch or chair or piece of furniture, all of their filtering is really built off of very clean product data, review data, pricing data and more. And once you have this kind of sophisticated filtering system, you can start improving search. You can create editorial experiences based off of filters, filter-based destination URLs. There are tons of different, I guess, product features that can come out of this methodology. Let's talk about driving conversion through aspiration. It's no question with huge commerce giants like Pinterest and Instagram that inspiration definitely drives purchasing decisions. And helping a customer meet their goals and live the lives that they aspire to live is definitely a psychological tactic that a lot of product managers and marketers use when it comes to commerce. From a product standpoint, it's really important to demonstrate to your shopper that there's value beyond product metadata. So really appealing to a person's psychological, social, or economic aspiration rather than just their reality definitely sells. This is very clear just from looking at how popular social commerce has become in the last few years. 60% of Gen Z years use Instagram to discover new brands and 48% of Americans 18 to 34 have purchased through social media. That social affirmation is a huge driver. But it's not just social affirmation that demonstrates shopper value. There's definitely the ability to sell products in context. So if you can recreate the environment in which a product would live, such as what it looks like in context to other things in the room or what that product will make you feel or how it will make you look by the end of it, you definitely increase the propensity to purchase. So what does this mean for product managers? It means that it's really important to demonstrate shopper value through aspirational experiences. We've got to go beyond just product metadata, right? What do you do with that product metadata and how do you present it in a way that encourages and inspires people to purchase? So one of my favorite examples here is Target. They have a whole system of 360 shoppable rooms that allow you to see what a product will look like not just in person, but within a whole environment of many other products working together. I, as you can probably tell, don't have a lot of home decor savvy. And I definitely rely on things like this to help me understand how different products can work together, because I don't particularly have the creativity or the skill to be able to match things up like an interior designer working for Target might. Other examples of inspirational placement like this include hotspot videos and photos, which are very popular now, and products that are featured in user reviews and photos to see how other people might style a product. There's also goal-based shopping. So my absolute favorite example of this is King Arthur Flower, partially because I myself love to bake for fun. But it's really easy to say, okay, selling flower could be very boring or straightforward. You just post flower on Amazon and hope somebody buys it who's looking for flower. But King Arthur Flower, this brand has gone above and beyond in this idea of goal-based shopping. They show tons of guides around how to make pies, scones, any kind of dessert imaginable. And then they show you what are the tools that you can buy that will get you to make it. So next time you create your next masterpiece, you can go step by step and actually learn while you're using their products. There are tons of goal-based shopping examples in product management, things like tutorials, learning gamification, lifestyle 101s. You can imagine a case where somebody might say, here are the 10 products that you need in order to successfully become a vegan and let go of meat forever, whatever it might be. It's really helping a user achieve their ultimate goal. And it's so important to understand your user's intent in order to be able to deliver really successful experiences like this. And then there's environmental context. This is really the idea that you might love a painting, but you don't know necessarily what it'll look like in your home. And you want to get context and see if it's something that you might want to wake up next to every day. IKEA does an amazing job at this. They, in their app, have an augmented reality feature that allows you to see an item, how it will actually be fitting in your home. So that helps address a lot of things like size, color, shape, dimension, but also just does it fit in with your life? Does it fit in with your environment? There are a lot of examples of product managers launching e-commerce features like this, such as Try At Home. This is something that Warby Parker became very famous for where they send you the, you know, multiple different types of glasses and whichever ones you don't like you return, but you actually get to try it and see in the environment, aka your own face, does it fit your life? And if not, you can return it. But if so, you get the chance to keep it and make a purchase that you're really happy with. And lastly, there's the idea of curing shopping analysis paralysis. So there is this concept on the internet, which is the infinite shelf. There is absolutely no brick and mortar store in the world that can combat Amazon's entire catalog. They have, I believe, 12 million products at the moment. And product managers can really help indecisive, overwhelmed shoppers confidently pull the trigger on a purchase by providing all of the most important information. There's really an underlining here of consumer education. Shoppers will compare the features of your product against other competitors. So they'll look at things like competitive pricing, free shipping, shopping reviews, you know, accurate product descriptions, are there free returns? This, as you can see, this is the order of top influencing factors that users have explicitly said they consider when they're making a purchase. So making it as easy as possible for your shoppers to compare products will increase conversion. And this really comes down to a much bigger question of how do we get closer to replicating the in-person benefit of shopping? Obviously, there are certain things that we haven't gotten quite there yet on. So things like try before you buy or physically interacting with a product or talking with an in-store associate to make your choice. Those are some of the greatest benefits of shopping in person. How do we as product managers not only replicate but build on that experience by bringing it online? So what this means for product managers is we have to build experiences that address both this online and in-store factor that drive conversions. A couple of the methods here, let's kick off with price confidence. It's super important for your users to know that they are getting the best price. That is the number one, competitive pricing is the number one factor for most purchases and it's only increasing with what we saw earlier in this presentation of Gen Z behaviors. So a lot of this comes down to not only the product value but the communication that you have with users. My favorite example of this is from Honey. Honey is a rewards cashback and coupon service that allows you to get discounts when you finally hit the checkout of many different merchants and their browser extension actually allows you to check out what are the coupons that you can apply but if there are no coupons to apply, they will explicitly tell you there is no buyer remorse here. You have the best price. They're reassuring you saying you no longer have to delay making this purchase because we've already done all the research for you. This is the best that you can do. Feel free to pull the trigger and buy that beautiful coat or whatever you've got in mind. Other examples of instilling price confidence through product management are price drop alerts, in stock alerts, pricing charts, comparing pricing, discount indicators. You would be amazed even if it's not that big of a discount, people will always feel better if they know that there was a higher price previously and they're getting it on sale and a lot of companies are looking at things like pay as you go options for high value purchases so people might not necessarily be able to pay for a couch tomorrow but maybe over the course of four months they can do a monthly installment and pay it off over time so people will feel confident that they can actually make that purchase. And then there's also easy feature comparison. This is kind of the equivalent of the in-store assistant that helps you figure out for your particular needs, for your particular feature request, what is the best product for you. You might not necessarily need the craziest, most expensive, most luxury TV if you're not using let's say 3D glasses or 4K streaming services. You might want something that's better for your price or better for your family, whatever it might be. So a great example is definitely CNN underscored because they feature tons of well-researched charts and reviews that help shoppers find the perfect product or service for their particular needs. In this example, we're talking about the Capital One venture credit card, how does it stack up to other types of credit cards and why might that be the best choice for you. Other examples of these kinds of feature comparisons include testing videos, comparison charts, editorialized recommendations by life circumstance, and one area that's really growing in product management is chatbots and customer service helpers that actually help answer your questions as you go through your product purchasing experience. There are also reassuring reviews and user-generated content. So Rent the Runway does a phenomenal job of showing many different types of users who try on the same dress, but it shows things like their measurements and how they style the outfit so that people who are looking at these reviews can find clothes that fit them best and also can get inspired by how to wear them. Other examples of these kinds of reassuring reviews are social media affirmations and testimonials. There's also sampling. Sampling is essentially giving something away for quote-unquote free in order for people to feel confident in the purchase. So Casper does an amazing job at this. They had a huge problem ahead of them. I guess a challenge where mattress companies, we all probably have been to one before where you go lay on a mattress, you decide, yes, this is very comfortable, I'd like to take it home with me. How exactly does Casper sell a mattress to someone that's never laid on it? Well, the anxiety of not testing it is relieved by this 100 night free trial that they offer plus a free shipping promise. So if you don't like it, you send it back for free. The reality is most people are A, going to love a mattress that's soft and comfortable and personalized for them and B, probably don't want to go through the difficult process of returning a full-on mattress. This example of sampling has really been the core to a lot of their business, but there are other examples like offering your customers to try multiple sizes or styles at home and only pay for what they keep. We're offering product samples for their next purchase of new products that you're trying to promote. And then lastly, there's contextual sizing. This is really important for kind of removing the distance between the in-store and the online experience. My personal favorite example of this is Away, the luggage company, where they show a gift that literally has somebody packing up that particular version of a suitcase to show you how many shoes can you include in there, how many sweaters, how thick are those sweaters, all of the things that you would really feel much more comfortable in person knowing if you could play around with it, they actually go through the steps of demonstrating it for you, which gives a lot more, I guess, confidence in the purchase you're making for the particular type of trip you're taking. Other examples of contextual sizing include creating photos that have scale to common items or people, showing in-depth videos of what things look like when they're being stored or handled, as well as leveraging AR, VR, and 3D tours. So these are just some of the commerce trends that I think are really important to be keeping in mind as a product manager to suit your user's needs. But I would love to hear from other folks who are listening in on what your companies are doing to really help bridge that gap between in-person shopping and online, as well as really elevating the online shopping experience to provide value that has never existed in store. I would love to hear more about it and I hope that this particular presentation inspires you in whichever industry you're in to really think about different ways of serving customer needs. Thank you and please, if you have any questions, feel free to reach out to me on Twitter or on LinkedIn. And also, if you need some references to the resources that I posted in this presentation, please feel free to check out the resources section on product school. Thank you so much.