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Brands are ditching direct-to-consumer ecommerce model

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Brands are migrating investment in site direct-to-consumer e-commerce features to merchandising efforts on major retailer platforms such as Amazon or Best Buy, a new research has found.

According to the newly-released L2 Inc consumer electronics report, over the last three years, 13 percent of L2 Index brands have removed direct-to-consumer e-commerce functionality from their brand sites.

Most notably, legacy brands Toshiba and Sony have discontinued their on-site e-commerce platforms. In the US, Toshiba now exclusively sells its products through CDW, an educational and government supply retailer, while Sony’s product pages link to a list of online retailers with product stock and price information.

Additionally, L2 observed declines in both account and live chat features on consumer electronics brand websites. These declines are likely the result of the success of Amazon’s best-in-class Prime membership program and Best Buy’s investment in unparalleled customer service delivered by the retailer’s teams of blue shirts.

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As direct-to-consumer brands look toward the future of online sales, they must weigh
the substantial investment required to compete with retailers against the possibility of using their websites as nimble merchandising platforms—conduits for third-party sales, a new report suggests.

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Shopping trends: 72.1% of shoppers will turn to Amazon first this holiday season

Harry Suresh

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The holiday season is fast approaching and a new survey reveals insights into how shoppers will hunt for products and what trends retailers should be aware of in order to capitalize on the end of the year retail boom.

The study, commissioned by CPC Strategy and carried out by the independent research firm Survata, surveyed 1504 consumers to understand how they will shop in the fourth quarter of 2017, and specifically in regards to Black Friday, Cyber Monday and Christmas.

Holiday Sales Look Encouraging

The general takeaway from the study found that end of year sales looks promising for retailers as more and more millennials are coming of age and willing to spend significantly more money during the holidays.

Among 18-24 year-olds, 23 percent said their spending will increase. On top of this, 79 percent of Baby Boomers — the biggest spending cohort during the holidays — said they would spend roughly the same this year.

Overall, 88 percent of shoppers plan to spend the same or more this year on gifts, meaning the staggering $658.3 billion spent last year will most likely be matched and probably even surpassed.

As for individual spending on gifts, 62.1 percent said they will spend $500 or less, with 30 percent spending $250-499. Over 26 percent will spend $500-1000 and 11.2 percent will spend more than $1000.

Shoppers are evenly divided on when they will hit the stores, whether online or brick-and-mortar, in search for gifts. One-third will start holiday shopping before Thanksgiving, another third will start on Thanksgiving weekend and the following Cyber Monday, and the final third will begin their shopping in December.

Similar to last year, December 17, also known as Super Saturday, is again expected to be the biggest holiday shopping day.

Amazon Leads the Pack

What shouldn’t surprise anyone is Amazon’s continued dominance in the retail marketplace.

Of the respondents, 72.1 percent said they would search for gifts on Amazon compared to just 60 percent who said they will look for gifts in-store at big box retailers like Wal-Mart and Target. An even lower number, 38.6 percent, said they will browse these big box retailer’s online stores.

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Women are much more likely to shop in-store at big box retailers (67%) while men were fine to do their holiday shopping online at Amazon (76%). Millennials heavily favored shopping online rather than in big box retailers.

And lastly, 46 percent of holiday shoppers will use specialty retailers who target their specific demographic to find gifts and products.

Low Prices Rule the Day

When asked what the main driving force is behind which brand or retailer a holiday shopper choices for purchasing gifts, the overall price was far and away the most important factor. The next highest was brand quality, at 16.2 percent.

As echoed in other studies, the youngest generation surveyed (18-24 year-olds), were far less price conscious, with 23 percent emphasizing brand quality and 10 percent valuing friend or family recommendations (both the highest of any age group).

The oldest generation in the study, 55-64, favored product selection as the second most important factor behind price.

In addition to low prices, the survey found that “fast and free shipping isn’t just optional — it’s now the baseline for retailers.”

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Holiday shoppers also frequently used their phones to check prices while searching for products in-store — only 28 percent didn’t check the online cost. Of these price wary consumers, 32 percent checked a product’s price on Amazon before committing to a purchase, followed by Google (23%) and the retailer’s website (10.1%).

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Amazon develops new AI that can predict the latest fashion trends

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Amazon has developed a new AI system that will allow it to predict and potentially help shape the latest trends in fashion.

The machine learning system, built by Amazon’s developers, will analyze social media posts and the limited information they offer — like clothing tags or labels — to determine what is fashionable or soon to be in style.

After obtaining the data and analysis, Amazon’s AI fashion designer would theoretically be able to push more fashionable clothing brands to the front of its gigantic e-commerce marketplace — a progression that might force brands to constantly stay up-to-date with trends so not to be left behind.

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And the move makes sense for the online retail behemoth. In the past couple years, Amazon launched its own in-house clothing line, and Prime Wardrobe, which lets customers ship a box of apparel to their home to try on before purchasing, all in the attempt to personalize the online clothes shopping experience as much as possible. Amazon also built Echo Look, an in-home Alexa-powered device that can take pictures of consumers and then offer real-time fashion advice. Amazon teams are also working on an artificial intelligence that can learn about style by looking at images and then come up with similar styles itself from scratch.

Amazon isn’t the only one developing fashion AI systems that can predict style trends. Researchers at the National University of Taiwan built an artificial intelligence system that can comb through images and accurately identify and classify styles and then foresee what will be fashionable in the season to come.

But as it stands, Amazon’s new host of fashion AI systems could pose serious repercussions for the fashion industry and offer it a potent advantage to traditional department stores and clothing lines. Amazon is currently on pace to pass Macy’s as the largest clothes retailer in America this year.

Many forward-looking brands understand this and are already innovating their apparel line to anticipate fashion trends using the likes of Instagram, Pinterest, and Facebook. From the current view of the future, brands and clothing retailers will need to understand and forecast trends to keep up in the ultra-competitive marketplace that is appreciating technological innovation more and more each year as shoppers continue to shift to buying from online stores.

It’s not clear as yet though, if Amazon’s game-changing AI will eventually be available for brands to use in order to help follow and predict fashion trends.

All of these potentially groundbreaking innovations were discussed and revealed at an Amazon hosted a workshop with both industry leaders and academic professors. As for the Amazon’s machine-powered fashion AI’s ability to predict trends anytime in the near future, the academic researchers surveyed by MIT Technology Review are skeptical. The researchers believe that human clothing designers should still handle the bulk of the responsibility, albeit aided and assisted by the rapidly advancing fashion AI when needed.

For consumers, this seems to be yet another step closer to what looks like an inevitability — bringing a highly-personalized shopping experience to the living room. And for brands that can’t keep up with these innovation and technological advances, they will surely suffer in the retail marketplace.

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Top 10 Trending Products to Sell on Amazon in 2018

Harry Suresh

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Every year millions of new products being added to Amazon, the largest online retailer by a large margin. But the fact is that very few of those become best-sellers. Before we dive into our list of trending products that we believe will flourish and dominate Amazon’s listings in 2018, let’s take a closer look at some of the factors that help to predict the potential success of a new product.

If you are experienced seller on Amazon, most likely you are familiar with the manufacturing cycle of a product and its logistics ecosystem. However, if you are not sure what to sell on Amazon and searching for a new trendy and profitable product that has a lot of potential, it’s crucial to understand that your position in product’s manufacturing lifecycle is one of the key elements to success and potential profit margins.

Without going too deep into economics and marketing theories, let’s draw a simple chart illustrating how vendor type is correlated with competition, market advantage and profit.

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It’s not rocket science, but it suggests that if you are a small retailer, following creative innovators will increase your chances to find a new profitable product. It will help you to stay ahead of your competitors and sell more products on Amazon or any other marketplace.

Depending on whether you are a small retailer, a manufacturer (innovator) or selling white-label products, our list provides some of the most trending products, that we observed over the time while covering our daily news section. Although some of these consumer goods are not available on the market yet and due to be released end of this year, successful crowdfunding campaigns suggest that there is a huge demand for such products.

The 2017’s holiday season is only three months away and we can expect that some of these products will top Amazon’s best-seller listings by 2018.

10 Trending products to sell on Amazon:

Touchscreen gloves
Smart backpacks
Laser engravers
Ear wax removal kits
Portable mini 3D printers
Fidget toys
Seal & Pour packages
Solar USB Chargers
VR gadgets
Plastic folding furniture

1. Touchscreen gloves

Although touchscreen gloves have been around for awhile, there is a huge niche market for this product. A quick search on Amazon for touchscreen gloves, reveals how immature this product is. Surprisingly, almost all items are available only in dark grey or black colors. Clearly, there is a lack of visually appealing, colorful and stylish gloves. So if you are still wondering what to sell on Amazon this holiday season and in 2018, touchscreen gloves seem to be a good choice.

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Touchscreen gloves listed on Amazon. August, 2017.

A good example is Napo Gloves, a new startup from Warsaw, Poland, is aiming to fill this niche. The company’s new product combines luxury fashion with technology dedicated to touchscreen devices such as tablets, smartphones, ATMs and car navigation systems.

2. Smart backpacks

Smart backpacks allow travelers to charge their tablets, game consoles, smartphones and other gadgets on the go. Backpacks equipped with powerful batteries and USB connections are certainly on the rise. Unlike small power banks, that might be not so comfortable to carry it along, a backpack is not limited to a single purpose. This niche market is gradually becoming saturated. But a quick search on Amazon shows that despite the fact that there are many products listed under this category, most of them are quite popular.

Backpacks are also one of the most trending products on crowdfunding platforms such as Kickstarter or Indiegogo:

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Backpacks are popular among supporters on crowdfunding platform Indiegogo. August, 2017.

3. Laser engravers

Personalization and customization of products is in high demand. Laser engravers are primarily used in industrial production. But a new technology allows to make them small, portable and user-friendly. Cubiio is a good example of this trend. Although Cubiio can only engrave on wood, paperboard, cardboard, fabric, felt or leather, the new gadget successfully raised $798,495 of its initial $25,000 goal. A perfect product for DIY enthusiasts. 

4. Ear wax removal kits

A cotton swab is nowadays obsolete, having been replaced by advanced ear cleaning kits. The development of new materials and technology advancement in personal hygiene sector,  allows manufacturers to produce a new generation of ear wax removal products.

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Ear wax removal kits have been on the rise over the past few years but saw a huge jump in popularity in 2016 and it shows no signs of slowing down. One of the biggest advantages of selling personal hygiene products is that it guarantees repeated sales. The success story on Kickstarter of a new startup, Eeears, shows that there is a huge demand for such product.

Keeping in mind that the demand for these products is on the rise, there is a good chance to take the lead on Amazon’s listings and successfully enter this niche market.

5. Portable mini 3D printers

Scoot Galloway, marketing professor at NYU Stern School of business, made a strong statement saying that 3d printing is dead. And he was right in a sense. However, over the last 12 months, we have witnessed a new trend. Small, portable and highly customizable personal 3D printers became a new trend.  Here are few examples of how new start-ups are taking advantage of this emerging trend.

6. Fidget toys

The phenomenon and popularity of fidget spinner show no signs of slowing down.The fidget spinner is one of the most popular toys on Amazon and yet somehow new products in this category find their way to succeed. While there are plenty of best-selling spinning toys on Amazon, there are also a number of possibilities to improve and customize this viral product.  Here is a good example:

7. Seal & Pour packages

Packaging is a very saturated market. However, while doing this list we were not able to find many products on Amazon (nor on Amazon UK), that would feature a well-made seal & pour lid. According to our source in China, this is one of the best-selling packaging products on the market right now.

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8. Solar USB Chargers

Green energy is one of the biggest trends in the last decade. As technology evolves, creative entrepreneurs find new ways to deliver sophisticated, futuristic, solar-powered gadgets to everyday homes and offices. But solar USB chargers are yet to find their mass market.

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9. VR gadgets

VR industry is booming this year (and will continue in 2018). Virtual Reality glasses are among the most-wanted gadgets in 2017. We believe this trend will continue to grow as developers at major companies are working very hard to bring VR to masses. And companies like Cinera are taking one step further to bring IMAX-like experience to your home.

10. Plastic folding furniture

Plastic recyclables make up a large portion of recycling programs, and lately, companies in the recycling industry have been forced to come up with new ways to handle their production.
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This has sparked a new trend in home furniture, making it more affordable and durable. And one of the biggest advantages of selling plastic furniture is its low weight and shipping costs. A good example is Tinge table, that requires no tools or hardware when assembled.
plastic-table

Disclaimer:Top 10 Trending Products to Sell on Amazon in 2018” is only an informational guide. Before selling anything on Amazon you must first do your own due diligence to determine market demand and potential.

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