Despite the exponential growth in ecommerce transactions, its share in overall retail sales in 2018 is only 11.9%. This means that brick and mortar stores still manage to get the lion’s share of the market and therefore, building links between online and offline stores will be a key factor for a promising ecommerce future.
In addition to this, there are several ecommerce future trends that retailers should pay attention to – if they want to stay relevant and grow their businesses.
1. E-commerce Future Online-Offline Linkages
The comparatively low market share of ecommerce in retail means that there is a significant untapped potential that businesses can take advantage of. One key trend that’s believed to be key in shaping the ecommerce future is how businesses can increase their sales by offering customers both offline and online shopping options.
As a result, online giants – such as Amazon – are in the process of opening up physical stores to allow people to directly interact with the products they may have browsed or ordered online. Similarly, retail businesses have realised the importance of offering digital experiences to customers, particularly those between the ages of 18 and 34 years, as this group spends a lot of hours online, and on social media and make most of their purchase decisions there.
Therefore, it is logical to predict that the landscape of ecommerce 2020, destined for domination by agile businesses that have both a physical and digital presence.
2. E-commerce Future: Social Commerce
The majority of ecommerce analysts believed that online shopping and social media would be a natural fit. Their logic was that because people spend so many hours on Facebook and Twitter – browsing different products and asking for recommendations – making an online ‘buy’ button available on these platforms will boost sales.
Recent business and customer research reports reveal that this shift in consumer behavior is already taking hold, particularly among the youth, who’re considered the primary target audience in the ecommerce future. A vast majority of young people have started using social media to find products and services that fulfill their unique needs and also to get feedback from people within their online circle(s) who may have already bought or used the product.
The increasing amount of time that people are spending on social media sites also indicates that organizations can collect more customer data. This in turn, can allow ecommerce businesses to improve the targeting of their ads by showing the most relevant products to a person who has a habit of looking up for certain kinds of products.
This phenomenon of combining buying with social media is now referred to as ‘Social Commerce’ and it is expected to gain a prominent position in the ecommerce future trends to lookout for. If that is not enough evidence to emphasize the importance of social commerce in ecommerce future trends, the Kleiner Perkins 2018 Internet Trends Report, highlights the fact that big data and personalized product offerings and advertising will be key drivers of the ecommerce future.
3. E-commerce Future: Multi-Channel Engagement and Buying
With more people spending more time than ever before on social media, retail businesses have the opportunity to communicate with and engage their target audiences through multiple channels. For instance, someone may come across a photograph of a friend carrying a trendy handbag on Instagram.
It will be normal for the individual to ask the friend what brand the bag was, how much it cost and where she got it from. After receiving this information, the person will surely log onto the brand’s website, Facebook or Instagram page, browse through the available options and then make the purchase. Multi-channel engagement is, therefore, one of those ecommerce future trends that have already started to yield benefits for retailers. A recent research report states that almost 86% of people in the 18 to 34 age group make online purchases from at least two different platforms.
This is good news for businesses because research indicates that multi-channel shoppers spend more on average than people who restrict shopping to one channel alone. It is not wrong to conclude then that the drivers of ecommerce future have shifted from availability, utility to finally personalized product offerings driven by big data.
4. E-commerce Future: Mobile Commerce
With the growing smartphone penetration, particularly in developing countries with large middle-income groups dominated by young people, an emerging trend in the ecommerce future is the rise of mobile commerce. In fact, as per the statistics compiled by Javelin Strategy, mobile commerce is likely to hit an all-time high of $319 billion by the year 2020.
However, before retailers and customers can take full advantage of the potential of smartphones, it is crucial that ecommerce sites become mobile-friendly and the purchase process is further simplified so that people do not have to navigate multiple fill-in forms and pages before completing a purchase.
ecommerce players will also have to start looking beyond the North American and European markets in the coming years, most importantly, the emerging economies such as China, South Asia and North Africa where smartphone penetration is on the rise but is well below the global average.
Retailers who are able to develop mobile apps that can be easily downloaded and used without requiring too much bandwidth, will find themselves at a significant advantage in these countries where internet connections are very slow and have limited ranges.
5. E-commerce Future: Automating Operations
None of the ecommerce future trends mentioned so far will bear fruit until businesses are able to automate their processes, from inventory management, order processing, invoice and billing, delivery schedules and handling returns and refunds.
This is because multi-channel buying and mobile commerce will only be possible if a retailer has real-time information about stock levels for various products, when orders are shipped (including the approximate time in transit) and offering a variety of payment methods for customers’ convenience.
If an automated inventory management system is not in place, a retailer will have no way of knowing if a popular product has run out of stock. Without this information, the app and website will continue to accept new orders for that product, without the customer knowing that delivery is then delayed.
Research clearly indicates that customer satisfaction will be one of the most important factors influencing loyalty and repeat purchases in the ecommerce future, and if deliveries are delayed or orders cancelled, the retailer’s reputation will take a hit. People will switch to competitors offering similar products and services, and the negative word-of-mouth will have a lasting adverse impact on the ecommerce future of the retailer.
6. E-commerce Future: Native Social-Selling
Approximately 18.2% people have said that they are comfortable buying via the social media pages of their favourite brands. Although this is still a niche, this group of early adopters who are buying via social media will only grow in the coming years.
Instagram for instance, has more than one billion active users on a monthly basis, who spend almost five hours daily on the site messaging and posting pictures, and yes, shopping when a product catches their eye or recommended by an Insta-influencer.
Brands are witnessing a similar trend on Facebook, where their Facebook shops are attracting heavier traffic with an increasing number of visiting customers buying different products. In the future, large brands with a global presence will no longer be able to ignore the trend of native social-selling because their target audience will soon be doing the bulk of their buying on social media platforms.
This will be an interesting development because the ecommerce space will no longer be liable to be restricted to ‘online only’ businesses as well-known brands also set up their social media shops to tap into this growing customer base.
7. E-commerce Future: International Markets
As mentioned earlier, developing markets such as India, China, Bangladesh, and Pakistan not only represent untapped potential for mobile ecommerce (because of limited smartphone availability which is changing), these markets are also a customer gold mine for ecommerce businesses looking for new market opportunities to sustain growth.
The benefits of offering ecommerce services and products in developing countries are numerous. First, because the number of ecommerce players are only few as – the Western giants who get there before their competitors – will have the first-mover advantage. Second, according to McKinsey, almost one and a half billion people are likely to become part of the global middle-class, 85% of whom will be living in the Asia Pacific region.
However, before launching online services in these regions, it is important to have local market knowledge and partnerships. Entering a new market always comes with risks, and businesses will need to have contingencies in place in case something goes wrong.
As more established (and new) ecommerce businesses shift their attention to the East – in a race to dominate the ecommerce future – there will be a need to have strategic contracts with local shipment and distribution companies who will be responsible for the transportation of the physical products.
E-commerce Future: Looking Ahead
The traditional world of business is undergoing a revolution, and companies that want to survive and stay profitable have no option but to adopt the ecommerce future trends such as multi-channel buying, mobile ecommerce, and native social-selling.
Technology will remain at the heart of all online businesses, and making sense of big data will enable retailers to tailor their product offerings for specific customer groups. The ecommerce future will not depend on which business has the most capital or the best products, but on which ecommerce player is able to engage with its customers in real-time, and offer products that fulfil their particular needs.
Given the recent data breaches that have hit the financial institutions, hospitality organisations as well as social media platforms, data privacy and protection will be paramount customer concerns in the coming days. Simply put, people will be less willing to download mobile apps and enter payment information online, if they fear that their personal data will fall in the wrong hands and misused.
For a prosperous ecommerce future, businesses will have to work with technology and data companies as well as social media platforms to ensure that customer information is safeguarded at all costs.
Data leaks are common nowadays, and this has become a norm for even social media giants like Facebook, Yahoo!, Google and even Apple. There have been several reports of data leaks which lead to customers being extra cautious about their personal information.
There are, but less reports on ecommerce platforms which is why it is apparent that ecommerce field itself has a very bright future. When there are internet that powers online trade, it is not only convenient but easier too. With ecommerce making great strides in the world of convenience, it is not going anywhere anytime soon. In fact, as predicted by numerous experts around the world, it is the future of convenience and it is how shopping will evolve. Only that in 2020, it will be easier, more seamless and even more powerful and convenient.