Here are my five takeaways from Mary Meeker’s 2018 Internet Trends Report and what it means practically for Product Managers and UX Designers heading into 2019.

I would love to hear your thoughts and comments below.

Trend 1:

E-commerce is now Socially driven.

Social Media is now driving Product Discovery and Purchase with Facebook, Instagram, Pinterest leading the way. Users report that their online Product Discovery and Purchase are occurring on Social Media platforms[7]:

Facebook users’ average annual spend has risen from $16 in 2015 to $34 in 2018[8].

Strategic Implication:

We are now seeing e-commerce platforms meshing with social networking platforms which will require seamless interoperability — and data sharing.

With Facebook average user spending approaching $34, it is now rapidly approaching what a customer would spend, potentially through planned or unplanned impulse purchases, at a retail store. As users scroll through and view their Facebook newsfeeds, friend updates and shares, and Instagram stories while on the bus or just a few minutes before bed, Product Managers have a short window of opportunity to capture sales before that opportunity literally scrolls on by.

UX Designers and Product managers must develop effective strategies to leverage impulse purchase behavior and decisions. For example, AI and Machine learning can be leveraged to build neural networks identifying key factors of impulse buying and targeting users with a propensity to impulse buy[9]. Click here for a neural network model that was built for this very purpose(on page 407).

Logistically, while users’ Willingness to Buy online has increased, shipping costs and duties will put downward pressure on higher margins made possible from not having brick and mortar presence. False claims of damaged items, items not delivered, and items stolen, will pose challenges for merchants. Verified delivery will be a necessity as evidenced by Amazon’s Photo verified delivery[10].

Trend 2:

Customers are altering their Product Finding and Discovery preferences[11]:

49% now use Amazon
36% still use a Search Engine

Amazon Echo’s installed base has surpassed 30MM with Google following close behind at 14MM[12].

Strategic Implication:

Multiple storefronts on different platforms are now necessary to maximize Customer Acquisition wherever they land, whenever they find your product, 24/7. Either have a storefront website, Facebook presence, Instagram, and a presence on Amazon or risk losing customers to the competition. Customer will spend less time hunting you down for a product readily available through multiple vendors. A user will simply ask Alexa: “Order more dogfood” and trust the AI to search for, rank, and present suitable choices for purchase[13]:

Product Managers and UX Designers must revise User Engagement and Product Strategies for Voice-based shopping and AI based recommendation systems or risk lost sales and expensive product returns(ie. Amazon Echo)[14]:

As algorithms now determine what products are presented to customers for purchase and re-purchase:

“trying to get a brand into consumers’ consideration sets is not the right objective. Rather, the objective must be to get a brand into consumers’ preference profiles, a very different marketing task”[15].

McKinsey & Co.’s Consumer Decision Journey illustrates how the traditional “funnel” approach where consumer purchase decisions initially start with a list of potential brands which is gradually reduced in number, through strategic marketing interventions, until only one brand remains and purchased no longer works with digital channels.

Digital channels and AI based recommendation systems means the customer decision journey is no longer linear but circular with four phases: initial consideration; active research and evaluation; purchase; and post-purchase. Post-purchase is where customers experience the product and acts also as a trigger influencing repeat purchases[16].

A product’s value is now more than the revenue it generates, its value will come from its “ability to lead customers to other products via recommendations” thereby providing numerous upselling and cross selling opportunities[17]. Product value will need to be re-examined in the context of a Product Network and Product Network Effects.

Trend 3:

Deloitte estimates that 120MM used smartphones were traded in 2016 up from 80MM in 2015 indicating a rise in the ratio of used to new devices[1]. New shipments of smartphones in 2017 has hit 0%[2].

Prediction:

As the ratio of used smart phones and used laptops rise, Product Managers and UX Designers will need to develop and refactor products not just for the latest devices but also for older and slower devices which have narrower hardware constraints(ie. slower processors, lower memory, less ram, and other constraints). Cross platform capable products are not sufficient. To capture more users, Product Managers and UX Designers must ensure their products work not just horizontally across device product lines but also vertically(value and premium lines). Some products work great on newer, faster phones but what about older phones? Product roadmaps and user journey mapping will have to take this into account.

Trend 4:

Simple to Use is now pervasive[3].

Prediction:

What is simple for some may be complex for others. This will be an opportunity to build products for users who have different definitions of simplicity. Customer Journey Mapping and workflows will need to be designed for multiple types of users. User segmentation will expand beyond demographics and psychographics to include dimensions based on need, purpose, and time.

Ie. Some users may want an interface where Google Maps does all the trip planning while others will want an interface that allows users to tweak trip planning based on requirements.

Shazaam users at a nightclub have 1–2min to identify a song and will want a “1-click interface”. They are unwilling to wait longer for, and deem unnecessary, song lyrics, artists details, etc. to download. Shazaam home users, however, when watching a Netflix movie in their living room, will want additional details when Shazaaming a film score. These users will want a detailed user interface — a “1-click interface” is too simple for their needs.

Context of Use will be critical since “a single Use Case in different contexts can require vastly different approaches which has implications for usability, user acquisition, and user experience”[4].

Trend 5:

Globally(16 countries), 60% of transactions were conducted digitally in 2017[5].

Strategic Implication:

The strategic implication here is that each user’s digital touchpoint is now a potential Point of Sale for merchants. At a minimum, it represents an access point to further sales.

For users, online experiences, especially refunds and product exchanges for e-commerce and products, will be a significant factor influencing user’s Reason to Buy. Ensuring users have a seamless and fast way to conduct returns/exchange transactions and crediting purchases back to users will be an opportunity and challenge for some.

Product Managers and UX Designers will have a strategic imperative to identify determinants of online Shopping Cart Abandonment as part of their User Acquisition, Retention, and Conversion strategy. Some determinants might be Use of Shopping carts as evaluation/organizational tool, Waiting for price drops, or Decide to buy from Brick & Mortar store[6].

One strategy to raise User Trust is to include postage paid Return Shipment labels with online orders as a way to reduce Shopping Cart Abandonment rates. (You only pay when customer uses it).

References and Resources

[1] Meeker, Mary. Internet Trends 2018. Kleiner Perkins, 2018. Slide 15 Notes

[2] Meeker, Mary. Internet Trends 2018. Kleiner Perkins, 2018. Slide 3

[3] Meeker, Mary. Internet Trends 2018. Kleiner Perkins, 2018. Slide 17

[4] Chu, Yuting. How Context Of Use Improves Product Design and User Experience, 2018

[5] Meeker, Mary. Internet Trends 2018. Kleiner Perkins, 2018. Slide 18

[6] Kukar-Kinney, M., & Close, A. G. (2010). The determinants of consumers’ online shopping cart abandonment. Journal of the Academy of Marketing Science, 38(2), 240–250. https://doi.org/10.1007/s11747-009-0141-5

[7] Meeker, Mary. Internet Trends 2018. Kleiner Perkins, 2018. Slide 71

[8] Meeker, Mary. Internet Trends 2018. Kleiner Perkins, 2018. Slide 32

[9] Prashar, S., Parsad, C., & Sai Vijay, T. (2015). Application of neural networks technique in predicting impulse buying among shoppers in India. Decision (0304–0941), 42(4), 403–417. https://doi.org/10.1007/s40622-015-0109-x

[10] Weise, Elizabeth. (2018, Feb 28). Why Amazon is sending you pictures of your front porch. USA Today. Retrieved from https://www.usatoday.com/story/tech/news/2018/02/28/why-amazon-sending-you-pictures-your-front-porch/368761002/

[11] Soper, Spencer. (2017, Dec 20). Google Narrows Search Gap with Amazon, Retailers Left in Dust. [Web log post]. Retrieved from https://blog.survata.com/amazon-takes-49-percent-of-consumers-first-product-search-but-search-engines-rebound

[12] Consumer Intelligence Research Parters, LLC. (2018, Feb 12). Google Home Starts to catch up. [Web log post]. Retrieved from https://www.cirpllc.com/blog/2018/2/12/google-home-starts-to-catch-up

[13] Amazon (2016, Nov 8). Voice Shopping with Alexa [Video file]. Retrieved from https://www.youtube.com/watch?v=mCjvV3iFsuw

[14] Racked (2018, Feb 20). Amazon Echo Dot Voice Shopping Review | Racked Reports | Racked [Video file]. Retrieved from https://www.youtube.com/watch?v=xQPhWKswdIo

[15] Walker Smith, J. (2015). Marketing in the Era of Programmatic Consumption. Marketing News, 49(9), 32–34

[16] Court, D., Elzinga, D., Mulder, S., & Vetvik, O. J. (2009). The consumer decision journey. McKinsey Quarterly, (3), 96–107. Retrieved from https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/the-consumer-decision-journey

[17] Giesler, Markus. (n.d.). Algorithmic Customer Experiences. [Web log post]. Retrieved from https://www.mgiesler.com/blog/spotify

Disclaimer:

The content of this post is for informational, educational, and entertainment purposes only and is not to be viewed as recommendations or advice from the author.