The Future of E-commerce: Insights on the Evolution of an Industry

E-commerce is a highly innovative field. From the introduction of new technologies to the adoption of non-conventional business models, business owners are coming up with new ways to stand out among competitors and reach more people. 

The evolution of the industry is so rapid that online store managers often feel challenged to adapt to the latest trends in the e-commerce industry. That’s why having a deeper insight into what the future of e-commerce is going to be like will be useful when strategizing, making pricing decisions, etc. 

Let’s take a look at the tendencies that will be among key-change drivers in e-commerce in the near and distant future. 

E-Commerce Trends That Dominated the Decade

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In the last ten years, the e-commerce industry grew from an emergent opportunity to an established revenue-driver and a lucrative career field. Back in 2010, the field brought $227 million in revenue in 2019, the number was at $3.5 trillion

The development of new online platforms, technologies, and business management practices contributed to such a rapid growth of the field. Let’s take a look at some of the most promising new trends in e-commerce that shaped this industry into the powerhouse that it is right now. 

1. Personalization

Being able to choose which offer, product reel, or content a website visitor should see based on his shopping behavior, interests, and location has been a fundamental shift for e-commerce business managers. With the introduction of personalization, store owners can reach people more efficiently, lowering costs per acquisition and building a personal bond with prospective customers. 

There are multiple personalization practices e-commerce business managers adopt:

  • Personalized homepages
  • Tabs with products a customer has recently viewed
  • Email-marketing campaigns that adapt to the user’s time zone
  • Targeted ads based on user interests

2. Reliance on social media for increasing brand awareness

By 2021, the estimated number of social media users is expected to reach over 3 billion — which is a tremendous level of penetration. When looking for new clients, e-commerce owners can’t ignore multiple opportunities that platforms like Facebook or Instagram open for them. 

Most social media offer a built-in advertising toolkit that helps e-commerce business owners spread the word about their products. As a result, online store managers are actively including social media ads to their promotion strategies. According to statistics, 30% of Americans who are 18-34 years old already shop via social media. 

3. Content marketing domination

The last decade has been all about using content to connect with customers and increase brand awareness. Content marketing has been huge — according to the Content Marketing Institute’s research, 86% of B2B business owners use it to connect with customers. This is why, over the last ten years, we’ve seen impressive growth of various communication channels and types of content business owners can share, such as:

  • Blog posts
  • Social media posts
  • Branded videos
  • Podcasts
  • Emails

4. Community building

Outside of reaching out to prospective customers and using online tools to close deals, e-commerce managers needed to focus on ways to create long-lasting relationships with customers. This way, a recurring client would make faster buying decisions and have a higher-order value. 

There are multiple ways for e-commerce store owners to connect with customers. Here are the most common tools that are actively used for community building:

  • Encouraging visitors to share user-generated content
  • Supporting large-scale societal movements
  • Helping one-time clients keep tabs on regular promotions via email, texts, or social media.

5. Loyalty programs

The practice of rewarding customers for purchases is not new to retail — it’s been widely used by brick-and-mortar store owners for a long time. Loyalty programs have successfully penetrated e-commerce, as well — they help businesses prolong relationships with customers and encourage them to come back to their stores instead of choosing a competitor. 

According to Accenture, the following factors can be seen as the most efficient when it comes to interaction with online shoppers:

  • Sending personalized deals right when the customer needs it
  • Being mindful of boundaries and respecting the privacy
  • Sending ‘thank-you’ gifts and discounts
  • Reaching out to customers for recommendations when releasing new products

6. Partnerships with influencers

The influencer marketing industry is booming right now, with a market value of $6.5 billion dollars. As the number of Instagram users surpasses one billion, the potential reach of social media influencers is more evident than ever. Naturally, e-commerce business managers need to benefit from emerging trends to reach larger audiences and resonate with prospective customers better. 

There are multiple examples of successful influencer integrations in e-commerce. You can reach out to opinion leaders for an endorsement, a review of your product, or a casual mention in a video or a post. Other than that, an influencer can host a giveaway offering your store’s product as a prize. 

7. Collecting more user data for marketing purposes

Being able to connect with prospective customers via wearables, smartphones, and social media allows e-commerce store owners to gather more relevant information about a consumer. Right now, most business owners benefit from collecting four main types of data:

  • Personal data
  • Engagement data
  • Behavior data
  • Attitudinal data 

There are various ways to collect customer data. The following approaches to data collection are the most common among website owners:

  • Tracking and analytics dashboards
  • Social media
  • Forms and surveys
  • Tracking pixels
  • Location data gathered via mobile GPS
  • Collecting data via wearables
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A Closer Look at the Future of E-commerce

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Although current e-commerce practices will still be highly impactful, business owners will have to take new e-commerce trends and tendencies into account. Let’s take a look at the top e-commerce trends that help businesses communicate with audiences and offer relevant products that are going to drive change in e-commerce in the next 5-7 years. 

1. Proliferation of wearables

Wearable technology will create a new ecosystem that e-commerce business owners can use to attract new audiences and strengthen bonds with recurring clients. According to eMarketer, by 2022, there will be over 67 million wearable users. The use of smartwatches and other tools will reach over 25% of Americans

Although wearables will not necessarily become a mass platform like mobile commerce — mainly due to the development costs and technical constraints — the use of smartwatches for tap-and-go payments will become commonplace. Other than that, e-commerce business managers can use wearables to get relevant behavioral data and be able to extend the level of personalization in client communication and advertising. 

2. The growing impact of sharing economy

The sharing economy is a powerful trend in e-commerce. By 2021, over 86 million Americans are expected to use sharing economy services. Although the rise of this trend will give rise to Airbnb and Uber-like tools, organizations that sell expensive or rarely used products will be challenged to adapt to the changing landscape. 

Hardware retail, for instance, is likely to be threatened by the rise of on-demand rent platforms; however, the impact of sharing is mostly positive, increasing the awareness of environmental issues and promoting sustainability practices. 

3. Customers crave experiences like never before

In the future, the growing number of shoppers in the world will see shopping as an event rather than an obligation. Retailers will have to focus on making every step of the buying journey enjoyable — visual tools like augmented reality and connected tools will come in handy to create new customer experiences. 

Online retailers will also need to focus on creating an experience that users will be proud to share on social media. Other than making shopping convenient, business managers need to encourage website visitors to be creative — Nike, for instance, allows people to express their vision by fully customizing a pair of sneakers they get

4. Regulations make business owners more selective in the data they collect

Сustomers are becoming more aware of how powerful data ownership is. In the aftermath of the Cambridge Analytica scandal and numerous data breaches involving famous retailers, website visitors are cautious about leaving their personal information online. 

In the e-commerce future, retailers will have to be selective about the data they gather and explain the purpose of recording such personal information directly to their customers. Other than that, the integration of centralized data sharing platforms will be a major trend in the future — initiatives like MobileConnect in the UK will help online shoppers share standard data packages with all retailers. 

5. Blurring the boundaries between offline and online shopping

The concept of physical pop-up shops — where online retailers can showcase their products — is spreading rapidly among retailers. Reports state that 82% of shoppers acknowledge the importance of human-to-human interactions when shopping be it via online chats, telephone, or at a physical store. 

Being able to connect with the product physically is a crucial part of making a buying decision — and more retailers will come to realize this in the future. 

As a matter of fact, brands like eBay, ASOS, and some fashion brands have already started adopting a click-and-collect shopping model that allows shoppers to interact with the brand both physically and online. The practice has been extended to multiple markets, among which are the UK and Ireland. 

6. Race for the fastest delivery

Companies like Amazon have already raised the bar for retailers, making free shipping and same-day delivery an industry standard. In the future, the race for offering the fastest and most cost-efficient product shipping service will become even more intense. Larger retailers, like Amazon, will use drones and automated vehicles to fuel their delivery systems. 

In the next five years, the impact of automated tools in delivery will still be incremental due to safety and budget considerations; however, Uber-style delivery is likely to be a new cost-efficient way to approach last-mile shipping.

7. Mobile payment boom

According to statistics, the number of smartphone users worldwide will surpass 3.5 billion by 2020. As a result, retail trend analysts expect to see growing popularity in smartphone-based payments. Near-field communication is expected to be another dominant technology for mobile payments, covering almost 1 billion users by the end of 2019. 

Tools like Google Pay and Apple Pay make smartphone-based payments considerably more efficient. E-commerce managers need to adapt to this trend as well, creating a convenient checkout process for smartphone users. 

8. More ways to analyze customers’ emotional engagement with the brand

Social media platforms, smartphones, and wearables introduce e-commerce business owners to new types of consumer data. In the next five years, marketing and sales managers will be able to get a 360-degree view of prospective shoppers. Here are the types of data e-commerce company owners can use for decision-making:

  • Location data — where the person is located, the shopper’s connection to the location, how well he knows the place, etc.
  • Demographic data — gender, age, occupation, income, hobbies, and interests.
  • Health and mental state — how energized a person is, how much exercise one has, what medical conditions are relevant in the decision-making process.
  • Shopping behavior insights — what the main value factors to consider are, how much a person is willing to pay for a product, what the preferred payment method is, which loyalty programs would be the most efficient to create long-term relationships with clients.
  • Tech connectivity — types of devices and frequency of usage, the platform and connectivity type a person relies on.
  • Environmental data — what the weather is like, whether traffic is busy or not, how polluted the area is. 

All of the above will help retailers create efficient and personalized communication strategies, removing any guesswork from the decision-making process. 

9. AR is a Key Change-Maker in Retail

Augmented reality is a way to build a sustainable bridge between brick-and-mortar retail and e-commerce. The trend of introducing AR as an in-store experience already has early adopters, and will become more widespread over the next few years. According to additional research, over 120,000 stores will adopt augmented reality by the end of 2022. 

The most promising uses of this technology in retail are:

  • Improving in-store navigation
  • Collecting more data about customers’ shopping behaviors
  • Helping customers connect with items while shopping online try before buy
  • Running AR and VR showrooms

Our Experience in Following Retail Trends

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The bvblogic development team helps retailers keep up with the latest e-commerce future trends. Recently, we collaborated with MOYO — a leading electronics retailer in Ukraine. We created an easy-to-use system that helps customers find their favorite devices in a few clicks. 

Our team wanted to create a scalable website that is fully adapted to mobile use and easy to maintain. Here’s how we approached working on the system:

  • Using Yii — an efficient PHP framework that increased the scalability potential of the platform.
  • Integrating all common payment gateways to the system.
  • Adapting the website for mobile users.
  • Creating a separate mobile app to help MOYO be a leading m-commerce seller in electronics.
  • Designing a customer relationship management system to help marketing and sales managers harness and get insights from customer data, monitor leads, and build long-lasting relationships with customers. 

After updating the website, MOYO is now capable of hosting over 100,000 daily visitors, including smartphone users.

Conclusion

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What is the future of e-commerce? The evolution of retail is closely connected to the introduction of new technology — wearables, AR and VR tools, drones, and automated vehicles. In the next five years, retailers will have to create immersive digital experiences, think of ways to merge brick-and-mortar retail and come up with new, cost-efficient delivery models. 

Having the right technology for e-commerce store management is crucial for adapting to trends in e-commerce successfully. At Bvblogic, we design scalable websites, mobile apps, and assistive technology including CRMs and analytics dashboards to help retailers connect with their audiences.

To discuss your project, leave us a message. We are looking forward to helping your business evolve along with the e-commerce industry.

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