Did you know that the first-ever item ordered online on Amazon was a book? This instance happened in 1995 and now more than two decades later, the global sales in ecommerce have hit $25.6 trillion worldwide.
Thus in today’s incredibly fast growing ecommerce market, it becomes paramount to keep up with the changing trends. The growth of e-retail revenues is expected to grow by leaps and bounds to $6.53 trillion by 2022. The ongoing global coronavirus pandemic has also added to the global ecommerce numbers.
The modern way of doing business has changed drastically. This large-scale change has happened as business companies have adopted newer means that are seamless and more from the customer’s perspective.
So to reap rich benefits from the ever-proliferating ecommerce business, businesses must be at par with the changing trends. For this, you must consult a leading ecommerce development company.
In this blog, we will discuss the biggest trends that will impact the ecommerce realm in years to come. In addition, we will also see the role the global coronavirus pandemic played in escalating the horizon of ecommerce.
Therefore, without further delay, let’s get started.
The emergence of ecommerce
Global ecommerce sales have been on an exponential rise since 2014. The retail ecommerce sales swelled 376.92% from $1.3 trillion in 2014 to $4.9 trillion in 2021. Moreover, India and the United States until 2019 became the biggest ecommerce market with $740 billion and $561 billion, respectively.
One of the major reasons behind this explosive increase is the rise in the use of mobile devices. Mobile devices are more flexible which makes buying and selling over the internet easier for the users. In fact, mobile devices are keeping the customers hooked more than ever. In addition, constant evolution of online payment methods has made transaction simple, secured and effective.
Researchers believe that with ease of internet accessibility, the ecommerce industry will continue to expand. Also, as we still live in a pandemic-ridden world where people still can’t go out in peace, ecommerce will be a sustainable option.
Impact of the global pandemic on the ecommerce industry
There is no doubt that in the future, we will look 2020 as the year that changed everything. In times of slow economic activities worldwide, Covid 19 has been one of the major reasons that accelerated things in the ecommerce sector.
As the entire world went digital, the share of ecommerce in the global retail trade grew from 14% in 2019 to 17% in 2020. In addition, the eCommerce retail sales are expected to grow 15% in 2022. The pandemic has a positive impact on the overall sales of global ecommerce giant Amazon as well. The revenue increased by 35% and its sales surpassed $96 billion mark in 2020.
Covid 19 also boosted $183 billion as people paved their way and went online. Moreover, during the holiday season in US in November and December 2020 $188.2 billion was spent online.
The list of emphatic stats doesn’t end here. In the 12 months between March 2020 and February 2021, $844 billion were spent online. Also, looking at the current trends, the global ecommerce sales would grow up to $5424 billion in 2022.
Top trends that will define ecommerce in 2023 and years to come
After looking at the impressive returns of the ecommerce industry, it’s a no-brainer that this is the best time to jump on the bandwagon. But to leverage the full benefits, businesses need to be aware of the ever-changing ecommerce trends. For your benefit, we will discuss a few of the top ecommerce trends that will have a major impact
Buy Now, Pay Later (BNPL) Service
The number of consumers opting for ‘Buy Now, Pay Later’ service is increasing at 28% (YoY) in the United States. Moreover, Global Payments report also suggests that by 2023, 50% of the ecommerce sales will be represented by digital wallets. Thus, the Buy Now, Pay Later trend is expected to grow globally as the fastest online payment preference.
Online retailers must have the BNPL payment option to lure more customers. In addition, Afterpay has emerged as a leader in the BNPL space. In fact, the platform hit the 10 million user mark, which is a clear indication of the platform’s reliability.
Growth of Mobile shopping
Mobile shopping has grown to unprecedented levels over the years. As per researches, 52% of the global online consumers have made a purchase using a mobile device. Moreover, making a purchase online is just one part of the overall shopping experience. According to the data collected by Google, 60% of the online consumers use different devices while making a purchase. People are increasingly using mobile devices from discovering a new item to its research to comparing the price to finally buying it.
Mobile devices have eased the overall process of purchasing for the customers. According to Forbes, global shopping during the holiday season will hit $314 billion. In addition, almost 73% of the total ecommerce sales would come from mobile devices only.
Millennial and GenZ changing the business landscape
The buying habits of the Millennials and GenZ are constantly changing with the expansion of technology. And these are the generation who will use mobile phones to do online shopping more than the people from their previous generation.
There are more than 3.5 billion Millennials and Gen Z in the world. Thus, companies need to comprehend their changing habits to stay relevant in the competition.
Role of AR and VR
Augmented Reality (AR) helps in giving a richer buying experience to the customer. Thus, by 2022, more than 120,000 stores will be using AR to enhance their customers’ shopping experience.
While people opt for online shopping, one of the major deal-breakers is that they cannot see the product first hand. AR will bridge this gap as the technology will enable the customers to visualize the products better. Thus, AR can be the game-changer as it will allow the customers to understand their needs clearly and thus buy the product which meets their demand.
Moreover, the rise of Virtual Reality (VR) will play a pivotal part in giving customers a more immersive shopping experience. The potential of AR and VR apps can be realized because its overall market size will be $35 billion by 2025. In addition, AR and VR has a diverse market range, be it healthcare, real estate, education, military, etc.
Ethical Business Practices
The modern-day customers expect brands to do more for society as well. According to a survey done by Facebook, 68% of the Gen Z consumers wish that brands contribute more for the society. One of the top of it, 61% said they would be more inclined to buy a product developed in a sustainable yet ethical way.
Moreover, Gen Z is not the only online customer demographic which is advocating for ethical and sustainable products. In fact, a study done by Nielson found out that sustainable products have better growth rates irrespective of their genre.
Pivotal role of Social Media platforms
Social media platforms are by and large the biggest way to gain traction for the ecommerce platform. Statically speaking, global social commerce is expected to reach a whopping $604.5 billion by 2027. This means that the social media spectrum will grow at 31.4% CAGR.
One of the main reasons behind the growth of social media platforms is that it integrates buying experiences to the ecommerce platforms. Thus, it enables the business to keep their targeted audience hooked to their platform for a longer time. This will increase their overall revenue and play a significant role in maintaining a high customer retention ratio.
In addition, social media platforms become a good way for businesses to analyze the buying habits of their targeted customers. The data collected from their social profile will be vital in rendering personalized services.
More than 1/3rd of the global ecommerce companies are already working with social media influencers as of 2020. Micro influencers can connect with your targeted customers as they have a mass presence on social media. They are people with fewer than 10,000 followers on a single account. Moreover with micro influencers, you can incorporate hyper-local marketing strategies as well.
According to various studies done by InfluencerDB, micro influencers have a better engagement level than larger accounts. This is because; they have the ability to connect better with the targeted audience than the influencers with more number of followers. In fact the same study found that the nano influencers (1k-5k followers) render the best engagement rate.
The emergence of Direct to Customer (DTC) Products
If we include everything, there are approximately 12-24 million ecommerce sites in the rest of the world. But the numbers of websites that sell niche product direct to the customers are very small. Thus, if you are beginning an ecommerce business or trying to make a shift, you can very well choose to develop a platform that sells niche products to the customers.
Focusing DTC can increase your brand value and bring positive word of mouth of the customers.
Focus on more personalized services
It is safe to say that personalization is the future. According to a survey done by Bazaarvoice in 2018, more than half of the shoppers feel that personalized shopping experience is very important. Moreover, offering personalized services is one of the best ways to keep your customers satisfied because people value personalized services more as it helps them to find things they need while shopping online.
In addition, ecommerce companies are investing more in escalating the level of personalized services as it enhances the overall shopping experience. The companies can inform about new offers, products, discounts, etc. to their customers for the products they like. Moreover, using artificial intelligence and machine learning, the companies can also give proactive recommendations to their customers. In this way AI can even boost revenues for the ecommerce businesses.
Rise of Visual commerce
Image recognition will soon be going to be the most prolific trend in the realm of ecommerce. According to the researches, the global image recognition market set to hit $81.88 billion by the year 2026. This means that it will have annual growth rate of 19.6%. We all know that in a ecommerce business, there is no change of having a physical interaction with the customers. Thus, to bridge this gap, visual commerce will come into play.
We can say that visual commerce is the next-gen static visuals. This is because; visual commerce goes a step further and includes other visuals such as interactive videos, AR, consumer-generated media, etc.
Visual commerce is a major hit in the US markets as almost 75% of the total users search for visual content before buying a product.
Adoption of Dynamic pricing
Dynamic pricing has all the ingredients to attract more customers and keep the retailers alive in the market. Correct pricing is an integral part when it comes to ecommerce. Yes, no matter how good your product is, it will not generate enough sales if its pricing is not proper.
Thus, businesses should make sure that they price their products right to expand their user base. And by saying ‘right’, we mean that the pricing should be such that your product makes a maximum profit on selling. There are plethoras of software with which you can define the best price of your products. Thus, always use these tools and keep the price of the product relevant to the market.
Moreover, the software tools can also render real-time insights into the prices of your peers as well. In addition, you will get an idea about the market demand and the perceived value of your product.
Inclination toward Headless commerce
Headless commerce is no less than a boon for all online retailers. It allows them to manage their entire orders and inventory from a central platform. In addition, many ecommerce pundits believe that headless commerce allows a lot more control over the content. Thus, it ensures a smoother customer journey till the entire checkout process is completed.
There are two essential reasons for the unprecedented rise of headless commerce:
It helps to cut down on staff time and resources. Moreover, with headless commerce, it becomes easier to manage multiple ecommerce channels as well
The retailers can make new market channels in a quick as well as a cost-effective way
Headless commerce is a one-stop destination with all the core functions i.e. customer management, supply chain management, financial management, etc. Moreover, you can connect with the customers at various touchpoints with headless commerce without changing the codes.
Ecommerce optimization is vital, especially when you are working in a nice. This means that you are dealing with a highly competitive ecommerce market. So when you optimize your ecommerce platform, it will allow you to start apart from the crowd and build trust within your customers. Besides this, it aids in giving a better shopping experience to the customers and high conversion rates.
The real catch for the companies to rise in the ecommerce realm is to concentrate on the conversion rates. An average ecommerce conversion rate is 2.27% but it depends a lot on the audience and the country. Thus, businesses should keep away from comparing the average numbers and experiment to increase the overall conversion rates.
Content marketing will maintain its shine
Content marketing will continue to grow as it will help the eCommerce companies to connect with their customers in a better way. Efficient engagement with the customers will enable the online brands to grow by leaps and bounds and do two-way communications with the customers effectively.
Through proper content marketing, the businesses can add relevant information about the product. Thus, it will be beneficial to increase the product’s sales and increase their online presence.
In order to increase the reach of your content, you have to promote it well. Don’t forget to use social media platforms and the website link of your brand while promoting the content. Also, use the blog or the article to promote the social media platform’s content as well. The modern-day audiences are a fan of visual content. Thus, include interactive videos and pictures in your content to increase its overall engagement rate.
Analytics will be a vital cog
In today’s business era, data is the most vital and important thing; your analysis must always be spot on. Therefore, make the most of all the available digital and analytics tools to understand your target audience’s behavior. Because, optimal use of customer data will help you to understand their changing habits. Thus, with in-depth analysis, you can change your marketing strategy according needs and requirements of the customers.
The proper analytics tool will also make you understand the trends that will work the best for your business. Ecommerce is a vast field. There might be instances where one trend that works for your competitor might not work for you. Thus, with the help of analytics tools, it will be easier to find that ‘Mojo’ trend.
Moreover, always look to gather the data from different sources. This will give you a chance to analyze different user perspectives competently.
How does the future looks like for the ecommerce industry?
There is no doubt about the fact that ecommerce is the Goliath industry. The easy access to the internet has made sure that the horizon of ecommerce is not limited to only the developed countries. In fact, emerging markets like Brazil, China, India, Russia, South Africa, etc. will play a massive role in the future growth of ecommerce.
Researchers have estimated that around 3 billion buyers from emerging countries will have access to the internet by 2022. This means that the potential of growth is huge for the ecommerce industry in the new market.
The new-age ecommerce is not limited to just B2C. In fact, the B2B ecommerce sales touched a whopping $6.6 trillion mark in 2020 and are expected to grow even more in years to come.
The future of ecommerce marketing will not survive with great products alone. They have to devices ways so that customers would buy the products online. With better-personalized services and content marketing, they can enhance the overall customer experience and keep the ecommerce space sustainable.
Moreover, as the ecommerce realm is very flexible, the inclusion of new-age technologies such as AI and chatbot will aid in its success.
Conclusion
The eCommerce industry is and will be innovative and exciting changes in the future as well. So as an entrepreneur, to survive and thrive in this world, it would help if you were constantly on your feet. Keeping up with the changing trends and including things according to the customers’ needs will ensure that your eCommerce business has smooth sailing.
From advancements in technology to changing buying habits, as an entrepreneur, you need to keep your eye on everything. Continuous evolution is the key to take your ecommerce business to the next level.
Dr Maulik Vyas
Dr Maulik Vyas has been a seasoned content creator and novelist with over a decade and a half of experience in writing all niches under the sun. He has redefined the process of content writing as a Team Lead at Prismetric. Previously a medical professional, he pursued his passion leaving his profession. He calls himself an avid learner and staunch supporter of 'humanity-centric' technology.
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