In the modern retail landscape, e-commerce has solidified its role as a fundamental component of the present and future of retail, providing convenience and choice to consumers. Within the e-commerce sphere, several emerging trends are propelling the e-commerce industry's potential forward. What's particularly fascinating about these trends is their transformative capacity to not only redefine our shopping experiences but also shape the entire business ecosystem.
Today, e-commerce boasts an impressive user penetration rate of 57.2%, with projected revenues set to soar to an astonishing US$3.64 trillion in 2023, as per Statista. The prevailing sentiment surrounding its trajectory remains decidedly optimistic, and there's a strong expectation that this upward trend will persist, fuelled by the ever-expanding population of digital-native users. Nonetheless, it's important to acknowledge that heightened competition is becoming increasingly pervasive as more businesses vie for a slice of the e-commerce pie.
What was once a swiftly evolving e-commerce market has now evolved into a dynamic ecosystem, characterised by constant innovations, evolving customer behaviours, and rapid technological advancements. In this context, keeping pace with these ever-changing trends is no longer a choice but a strategic imperative for any player in the e-commerce landscape. Staying relevant in this fiercely competitive environment is contingent upon staying attuned to the nuanced and multifaceted shifts in the industry.
The Continuing Growth of Mobile Commerce (or m-commerce)
The rapid proliferation of smartphones has significantly fuelled the surge in mobile shopping. As increasingly sophisticated technologies become more accessible and affordable, a growing number of users are leveraging mobile devices such as smartphones and tablets for their online shopping needs. According to Statista, the outlook is promising, with projections indicating a rise in mobile users to 7.49 billion by 2025, up from 7.33 billion in the current year.
A prominent case in point illustrating this trend is Shopify, a leading e-commerce platform, which reports that a substantial 79% of their traffic originates from mobile devices. Nonetheless, they have also noted a concerning trend where businesses have yet to fully invest in delivering mobile-friendly experiences. Shockingly, a staggering 90% of customers express dissatisfaction with their support-seeking experiences on mobile devices.
Businesses looking to establish its e-commerce presence will undoubtedly need to prioritise and optimise the online user experience for mobile devices. For instance, building pages that cater to the smaller screens and provide interfaces that work for more transient settings. Businesses that embrace mobile-friendly strategies and seamlessly adapt to the mobile-first ethos thrive in this dynamic environment.
Refining Artificial Intelligence (AI) and Machine Learning Capabilities
AI and machine learning technologies continue to be a buzzword in many industries, for their ability to rapidly automate actions and retrieve insights. The e-commerce sector can leverage these technologies to enhance the shopping experience, ensuring it's both effortless and efficient. This can happen with AI’s ability to give personalised product recommendations, intelligent chatbots for customer service, and predictive analytics for inventory management.
Amazon's use of AI for product recommendations has been highly recognised. Their recommendation engine reportedly contributes to 35% of their total revenue. By analysing customer behaviour, the retail giant provides highly personalised product suggestions while extracting key insights that can inspire strategic decisions from management. The next segment to see a leap in growth will be the use of AI, as experts believe that they will power 95% of all customer interactions by 2025 including live telephone and online conversations, making it convincingly human-like that customers will find it challenging to ‘spot the bot’.
Activating Voice Commerce
With the surge of voice-activated devices like Amazon Echo and Google Home, it is no wonder that m-commerce and voice shopping have intertwined. Customers can now make purchases using voice commands, emphasising the need for e-commerce platforms to optimise their sites for voice search to provide voice-friendly shopping experiences.
As AI technology advances and online navigation via voice commands becomes more prevalent, the shopping experience is evolving from simple ordering to intricate tasks like reviewing and price comparisons. Ryder-Commerce projects that the voice commerce market will experience a substantial 400% growth, soaring from $5 billion in 2021 to an impressive $19.4 billion in 2023.
Considering the Influence of Social Commerce
In today's digital landscape, it's impossible to underestimate the significance of social media platforms as potent sales channels. A prime illustration of this transformation is the emergence of livestream shopping, which gained substantial momentum during the COVID-19 pandemic. Notably, China is leading the way in this trend, highlighting the growing fusion of e-commerce and social media, heralding a new era in e-commerce retail and digital marketing.
As businesses build their marketing strategies, one must leverage social media’s power for direct selling by integrating emerging features from these platforms (such as buy buttons and stores) into their social media profiles. SMU Academy’s E-commerce Ecosystem Content and Social Media Marketing Strategies for Business Growth delves into developing the synergy between e-commerce platforms and social media marketing strategies for more effective results, including diving into the power of influencer marketing with the prevalence of short content videos.
For instance, IKEA's "Place" app employs AR to help customers visualise how their furniture would appear in their homes. This technology-driven approach significantly boosts user confidence and contributes to increased online sales for the furniture giant. Similarly, beauty brand Ulta has experienced a seven-fold increase in engagement with their virtual makeup tool, and Shopify has observed that merchants offering augmented reality experiences achieved a 94% higher conversion rate compared to those not embracing AR/VR technologies. The integration of AR/VR is not merely a passing trend but a strategic necessity for various industries, fundamentally shaping the future of e-commerce.
Offering Same-Day and One-Day Delivery
Over the years, what customers have come to expect from the e-commerce experience has changed. What was once considered a premium service, has now become a norm, and having a speedy delivery is now a fundamental expectation. This trend - and again together with the rise of online transactions during the pandemic - has driven significant advancements in logistics and fulfilment technologies.
Today, any e-commerce company needs to look into having a streamlined and quick logistical setup, and SMU Academy delves deeper into this with its programme in E-commerce Order Fulfilment (The Lean Way). By optimising its operations and ensuring a rapid delivery system, e-commerce companies can better meet the evolving expectations of customers.
Promoting Sustainable and Ethical Shopping
The landscape of e-commerce is rapidly evolving, with sustainability as the driving force. Nielsen's Global Corporate Sustainability Report states that 81% of global consumers feel strongly that companies should help improve the environment. And as consumers have become more environmentally conscious, the demand for sustainable and ethically-sourced products will factor more and more into their shopping decisions.
To meet these evolving consumer expectations, e-commerce businesses must take a comprehensive approach and go beyond evaluating the sustainability of their current products and services while looking into eco-friendly packaging, conscientious supply chains, and transparent business practices.
For instance, outdoor clothing company Patagonia, renowned for its commitment to environmental and ethical practices pledged that all the company’s profits will go into saving the planet such as the protection of biodiversity and fighting climate change. The scale of this contribution not only aligns seamlessly with the company’s dedication to transparency and sustainability, but also served as a catalyst for generating marketing coverage - securing a strong brand reputation and dedicated customer base, proving that ethical business practices can drive sales and loyalty.
Ensuring Data Security and Privacy
Scams have proliferated, raising significant concerns about user data security. With the escalating frequency of data breaches, safeguarding the privacy and security of customer information is imperative, particularly when dealing with financial and personal data. It's not solely about fortifying backend systems; organisations must also effectively communicate their security measures, from marketing to user prompts.
Learning from industry leaders is instructive. Shopify, for instance, upholds data security via SSL encryption and compliance with PCI DSS standards. While establishing and maintaining such a system might appear costly and complex, Shopify's unwavering commitment to data security has earned trust from businesses and customers alike. This trust has led to widespread adoption, establishing it as a dependable e-commerce platform. To gain similar adoption, businesses must demonstrate a parallel commitment to employing top-tier data security technologies.
The e-commerce landscape in 2023 is exceptionally dynamic and promising. SMU Academy’s programmes such as the Professional Certificate in E-Commerce and E-commerce Ecosystem Fundamentals, along with Key Performance Indicators, offer vital knowledge for thriving in online commerce. Keeping up-to-date with consumer trends is crucial for businesses aiming to position themselves for success in the future of e-commerce.
Discover the many aspects of growing your business in the e-commerce industry with the courses at SMU Academy.
