iZest

A Guide to Understanding Contextual Commerce

A new frontier disrupting on-demand shopping experiences

Marketers are keenly aware of the fact that consumers are focused on instant gratification. This concerns all areas of interactions with brands. The launch of social media, saw this first arise in customer satisfaction with consumers expecting responses from brands 24/7. As Facebook’s and Instagram’s platforms evolved to include “shop now” options and access to smartphones with internet access grew, so did the way people shop online. 

Mobile Social Media Commerce - Shopify Platform - izest Marketing - contextual commerce

Source: Shopify

The early fear about eCommerce is starting to fade as more people are making purchases on their mobile devices. As a result, brands have found the current model for eCommerce disrupted now that consumers are looking for products on-demand. The recent emergence of contextual commerce may see some brands left behind if they struggle to adapt.

Contextual commerce allows brands to pair intimacy with automation,

so merchants can deliver increased and improved customer service”

via @DigitalComm360

The key to understanding contextual commerce is realising that it’s central point is ACCESS. Consumers are more knowledgeable than ever before. A person scrolling on Instagram can now see and purchase an item they are interested in 5 minutes from their smartphone. This is a level of access and ease that has never been witnessed before.

The Changing Landscape

The Landscape

Despite, being a relatively new term contextual commerce is everywhere. Consider this. If someone wants a cab, they can open up myTaxi. Looking for a quick bite to eat, well there is deliveroo which will have the food ready for you right as you get home from work. As a relatively new term, Citi’s Disruptive Innovation Report defines the term as “giving a consumer what they want when they want it, without requiring the consumer to take the initiative or expend much effort in any way.” 

Essentially, contextual commerce will continue to change as access to goods evolve. Financial institutions are a leading industry in the world of contextual commerce.

For example, Apple has been extremely innovative in creating a process that makes purchasing easier. Apps can now be downloaded using your Fingerprint ID and ApplePay allows for items to be purchased with a simple tap of the phone. Payments can even be transferred through iMessage.

Apple pay tap and send - Contextual Commerce - izest Marketing

Source: Apple

Credit card companies are now able to notify users of suspicious activity and making fraud easier to spot thus preventing consumers funds from being frozen. The current landscape of contextual commerce is simple. New apps or eCommerce platforms/sites will continue to make it easier for consumers to make purchases. It is now estimated that “nearly six out of 10 consumers today shop at the moment — contextually.” (PYMTS, 2019)

 

Converting Lookers into Buyers

With mobile usage expected to grow, the question is becoming how to turn lookers into buyers. Facebook and Instagram have started answering these questions with their tap to shop options. A person scrolling through their newsfeed can now purchase specific items through the app. Google’s attempting to drive purchasing by testing the addition of shop links in Youtube ads. Hilton and Uber are driving conversions by thinking of needs that consumers have and then creating a solution.

Need an Uber to the airport, well now that can be booked directly in the Hilton Hotel app. On the other side, Uber riders can check into their Hilton Hotel via the app get a digital key and skip the check-in desk. This creates a seamless process that consumers desire.

Contextual commerce aggregates the best practices for driving conversions.

Look to the Future

When looking at contextual commerce, this is only the beginning. What’s expected to follow will see an increase in the use of AI, VR, and AR. The possibilities for creating seamless shopping experiences are pretty much endless. Right now, retailers are saying we know you want to buy our products so we made it easier. But in the future, the combination of Big Data and Machine Learning will allow for brands to say that we know what you need before you do and we’ll be able to provide it before you even have to look.

Amazon’s Echo is a wonderful insight into the future possibilities of contextual commerce. People are able to order household items without ever having to move from the couch or open their phone. Run out of diapers? Tell your Echo to re-order your last purchase for diapers and it’ll arrive in 48 hours or less. In the future,  Amazon acknowledged that by using Machine Learning, they would be able to predict when customers would need common household items to be replenished and create a system that would allow consumers to get a new order before even running out of the product. Contextual commerce will link everything into one. If you see a shirt that you like on an Amazon Prime account, you’ll be able to order it directly with your Amazon Echo and have it delivered in a day with Amazon Now.

Amazon Alexa UI - contextual commerce

Source: Amazon

The future of contextual commerce will be to provide consumers with the right products at the right time and making the purchase seemingly effortless. But as GDPR laws and other concerns about privacy arise, the future of contextual commerce can be more complicated. Many consumers have issues with how these companies are using their data and information. This will create some limitations around the limitations of contextual commerce but for right now the future still looks bright.

People enjoy living efficient, optimised lives and ultimately like the benefits of access that is created from new technologies. So a future with more access is inevitable.

In essence, similar to how eCommerce has vastly changed the world we’ll start to see contextual commerce’s true impact on on-demand shopping experiences. It’s already starting to disrupt the eCommerce ecosystem but the gains for early adapters are positive. As younger generations start to grow and their buying power builds, it will be necessary to have a strategy that fits their behaviour. People spend ample time on their phones and want a seamless shopping experience. And in today’s world, if your company isn’t providing the experience another one will. Only making it more interesting to see which companies are able to adapt and innovate. Or which ones will get left behind.