How would you like to earn a portion of the five trillion dollars generated by e-commerce? Based on data from eMarketerL, that’s how much revenue e-commerce merchants around the world will likely be generating by 2021. Online merchants who understand the global potential of e-commerce are poised to garner a slice of the evergrowing pie.
But in order to make the most out of global e-commerce opportunities, merchants need to be aware of the significant changes influencing the online business sector. Technology is rapidly evolving where online business is conducted. Failure to understand and take advantage of these changes will result in your ability to capitalise on this growth in the global e-commerce market being greatly weakened. We have identified 10 main factors that will dramatically influence the future of e-commerce in 2020 and beyond. It is your responsibility to make sure your business and marketing strategy recognises and takes action on these factors in the new decade.
1. Voice Activated Interfaces and Voice Payments
Voice is going to play an increasingly important role in the future of e-commerce. As smart home devices like Amazon’s Alexa and Google Home continue to grow in popularity, we can expect to see a flood of consumers moving towards voi5.ce-enabled shopping. For the third year running, using voice activated payments and digital assistants for purchases has increased at a quicker rate than any other connected commerce.
E-commerce merchants updating their websites and apps to allow for voice commerce will outshine competitors still relying on traditional keyboard data inputs. With Google, Amazon, and Apple already making forays into voice payments, expect to see more disruption in the e-commerce sector as savvy merchants integrate voice payments into their growth strategies.
2. Shopping Bots and Digital Assistants
Speaking of Alexa and Google Home, e-commerce shoppers in the future will expect more interactions with conversational shopping bots and digital assistants. The technology already exists for e-commerce merchants to create their own artificial intelligence bots. Whether you use bot technology to help your customers choose the right product or opt for an image recognition assistant like the Amazon Echo Look, the key is to use technology to remove friction points for your customers.
Such assistants are fast becoming one of the most reliable and preferred mediums utilised by the increasingly busy consumer. The 2019 report from Capgemini found that 76% of organisations have already realised quantifiable benefits from the use of chat or voice bots in their services. The more seamless and informed the shopping process is, the better your chances of earning valuable brand ambassadors and repeat customers for your business.
3. Augmented Reality E-Commerce Experiences
Augmented reality will continue to grow into a major trend in the realm of e-commerce in the new decade. Online retailers are already starting to use virtual fitting rooms to help consumers make purchasing decisions. As more e-commerce retailers discover the power of using augmented reality to improve the purchasing process, expect this technology to be utilised in numerous market verticals and have a variety of applications. Everything from visual overlays to smartphone-enabled artificial intelligence interactions will assist consumers throughout their buying journey.
One key example of a brand using augmented reality to their advantage is IKEA. Their IKEA Place app allows users to virtually ‘place’ different true to scale furniture items around your room, ensuring customers can “test” items and choose the right items for their specific space.
4. Data Inputs
Data will play a huge role in the future of e-commerce. The more data an e-commerce vendor has on their consumers, the better prepared they are to serve their needs. For example, data analytics can understand shopping patterns, and foot traffic analysis can predict seasonal sales. Download and usage data from merchant-specific mobile apps can also influence how e-commerce companies do business.
The future of e-commerce is data fuelled and powerful. E-commerce merchants will be able to use everything from smartphone surveys to website forms to gather consumer data. When customers understand you’re asking for their shopping preferences or personal information to make their experience with your business better, they’re usually happy to assist you in personalising their experience.
5. Rise of Mobile and Social Commerce
The last few years have seen a steady increase in mobile screen time across the globe. This has given way for a direct increase in mobile commerce and social media platforms such as Instagram for purchasing opportunities. This is expected to continue in 2020 and the new decade as features such as the Instagram Checkout simplify the purchasing process for consumers. Demonstrative of this trend towards mobile, the world’s mobile commerce sales are predicted to make up to 53.9% of all e-commerce sales by 2021.
6. Personalised Shopping
As more data inputs become available, consumers will come to expect personalised shopping from their favourite e-commerce merchants. Gone are the days of generic click-to-buy interactions. Consumers will expect merchants to use their personal data to influence their shopping experience. Using tools such as quizzes and surveys, brands can help to identify the ideal products for different customers. From the products they’re offered to their shipping and payment preferences, e-merchants will need to step up their personalisation game if they hope to compete with big-name online merchants like Amazon. If you’re not already building an extensive database of customer information (be sure to encrypt), you should make it a top priority if you want to excel in your market sector.
7. Experiential Interactions
Tomorrow’s e-commerce consumer will expect their brand interactions to be experiences, not just transactions. E-commerce merchants will need to change the way they think about their branding and marketing if they hope to survive. Immersive marketing will be commonplace, as consumers look to merchants to create interactions that create connections and inspire brand loyalty.
Brick-and-mortar stores are experiencing some form of revival, whereby patrons are looking for more of an immersive customer experience when they visit a company’s physical store. Pop-up stores such as Nike’s SNKRS pop-up in Atlanta, are helping brands to heighten their success online with physical customer engagement.
8. Sustainable E-commerce
As organisations seek a more sustainable business approach to align with customer’s social values, e-commerce will need to follow suit. Key aspects such as energy-efficient manufacturing and low waste production are all going to impact upon the e-commerce industry, ultimately leading to how more environmentally conscious consumers choose companies to purchase from.
Zero waste packaging will continue to become a goal that many businesses focused on e-commerce will strive to achieve. Reusing or recycling packaging materials, in combination with reduced package sizes can expect to become the norm for organisations looking to demonstrate their focus on sustainability in the e-commerce sphere.
The growth of the second-hand market or “re-commerce”, shows thrifty consumers’ desires to purchase or rent some of the more sought-after products for a lower price. This trend can also be seen as a reaction to the “fast-fashion” retail mentality, whereby consumers are now buying twice as many clothing items and wearing them for half the time that they had previously.
The shift towards sustainability can also be a contributor to this rise of re-commerce, as messaging around environmental impact spreads and customers become more aware of the consequences of their purchasing decisions.
10. Brain Computer Interfaces
Although BCI (brain computer interface) technology might not be something you integrate into your online business in the near future, this technology is too powerful to overlook. Companies like Neurable (neurable.com) are already innovating in this area, allowing users to do everything from controlling gameplay to moving toys. Even Facebook is pursuing BCI. When the world’s biggest social network is putting resources into brain computer interfaces, you know other companies will follow suit. Don’t be too surprised if BCI weaves its way into the e-commerce sector over the next decade.
The future of e-commerce offers an exciting array of new opportunities, each with the potential to grow an organisation’s online business. The ways in which consumers are interacting with online businesses is rapidly changing, and this will continue to evolve and take shape as new technologies emerge. The sooner merchants become aware of the changing e-commerce landscape, the sooner they can use their new knowledge to their advantage. How many of these 10 market changing factors have you considered for your e-commerce business and marketing strategies?