Predicting the future is undoubtedly a fool’s errand. A thing that remains certain at all times is the ‘change’ itself.
Nevertheless, we can collect data, stats, and reports or talk to experts to draw conclusions, later shaped as predictions. Further, we can educate people about the same.
Here, in this article, we have done the same thing with the future of eCommerce.
Among many other topics, let’s start by taking a closer look at a few changes in consumer behavior that will shape the future of the e-commerce sector in 2023 and ahead.
But before that, click here to download ‘ Ecommerce Trends Report for 2023 ‘
Addressing Global Recession: eCommerce supply chain & market disruption.
The aftermath of the COVID crisis, added to the Ukraine-Russia war has forced nations to increase the costs of consumer items. According to the National Retail Federation (NRF), customers seek affordable offers as the holiday season approaches. Consumer preferences and purchasing power have evolved. In anticipation of the pandemic, Amazon and other major shops like Walmart, Target, and Kohl’s stocked up on goods that were in high demand.
Unexpected costs have resulted from supply chain disruptions in shipping and transportation. FedEx, a U.S. shipping company, recently announced an increase in general rate increases (GRI) of 6.9% for 2023. UPS is anticipated to do the same soon.
Although shipping contracts normally do not extend to delivery fees or related services, such as sales taxes that vary by state, they can minimize the rate increase this year. Surcharges now account for up to 40% of transportation costs, up from 10% to 15% in previous years. A similar situation occurs in Europe, where inventory congestion at ports and warehouses might lead to hefty detention and delay charges.
That implies that the cost of last-mile delivery will rise, as will the price of package transportation. According to predictions made by consultant TransImpact LLC, ground delivery charges would rise by 6% in the upcoming year, marking the largest yearly increase in 12 years.
Performance in shipping is crucial in e-commerce. Companies should bring their distribution networks closer to their local markets, says consulting firm BCI Global, and look into less-expensive sustainable delivery options.
The World Trade Organization became less optimistic about trade growth volume as 2022 progressed. The organization’s estimate for 2023 was a growth rate of 3.4% in April. By October, the forecast for the year had plummeted to a dismal 1.0%. As commerce growth slows down, worries around inflation are ramping up.- Shopify Plus.
The Power of Purchase: Genz & Millennials.
Millennials, born between 1980 and 1994, spend more than $1 trillion yearly in the United States alone.
But 36% of them are burdened with large student loan debt. This ignites the “access over ownership” movement and is the main inspiration for many current payment innovations.
Gen Z (the oldest among this age group is 24 years) follows the Millennials closely. According to this Dazed Media analysis of young culture, Gen Z members “sit side-by-side within the exact same person, hyper-individualism and mass trends. At the same moment when we are divided and united.”
This represents a change from earlier generations, especially Gen X, who saw individualism and the mainstream as diametrically opposed.
Say Hi to the ‘New Normal.’
Over the course of the past year, we have observed millions of businesses demonstrate resiliency in the face of the unexpected, resulting in more than $27 trillion USD in global retail sales. However, 64% of firms worldwide are still working to recover from the pandemic’s aftermath.
The pandemic’s economic barriers were made much more difficult in 2022 by sanctions brought on by the Russia-Ukraine war that slowed down or stopped trade entirely. The highest inflation in forty years is being caused by budgetary instability.
Just a few months into the pandemic, online buying increased 77% year over year, hastening the innovation and adoption of digital commerce by half a decade. Online banking, employment, and socializing have all become mainstream.
But after years of restrictions and lockdowns, people today want deep connections in all areas of life—including business. These points of contact between retailers and customers, encompassing both online and offline trade, are made feasible by physical venues.
Brands will need to adapt by introducing flexibility to their products, programs, and policies as they deal with the problems in 2023. Being flexible is more crucial than ever with a recession on the horizon. This study describes the global trends preparing brands to face the unexpected.
The study from Dazed Media states, “Human interaction and touch are dwindling as our homes have transformed into our offices and entertainment areas. Extreme tensions exist at the moment between “divided to united,” “digital to physical,” “reality to fantasy,” and “individualism to homogeneity.”
Improving on Shopping Experience.
When it comes to making a customer feel special- personalization is the key.
However, B2B eCommerce companies should do more to personalize the buying experiences for their clients. According to 39% of B2B buyers, the relationship with suppliers is the main obstacle to online shopping.
Additionally, B2B customers expect brands to personalize the purchasing process more. According to a McKinsey & Company survey of nearly 3,500 decision-makers in 12 regions, customers also want additional channels and ease.
B2B customers also desire more pertinent, customized messaging from businesses. According to a recent survey, 27% of participants responded that inconsistent brand message and another 27% that irrelevant marketing irritate them the most.
By routinely gathering customer data and using it to tailor the buyer’s journey, B2B marketers can gain a deeper understanding of their target market.
In order to personalize purchasing experiences, B2B brands must be on par with B2C brands, according to Ryan Turner, founder of the email marketing firm Ecommerce Intelligence– “Being able to provide a customer experience that rivals the best B2C brands is becoming a key factor for any B2B company wanting to increase new customer acquisition via eCommerce channels and stay competitive online. This means fast and lightweight websites which are easy to navigate on any device, on-site personalization, and well-crafted multi-channel communications across email, SMS, and the key social channels.”
9 Factors shaping the future of eCommerce:
All the pointers mentioned below carry three similar objectives:
a. Lessing the buying & selling friction.
b. Delivering a rich brand experience.
c. Selling everywhere & anywhere.
ECommerce will be driven by increasing consumer convenience and delivering compelling and rich shopping experiences along all channels.
Online Shopping Adaptation (Outside the U.S. market):
ECommerce has increased its percentage of total retail sales in the past five years, which is predicted to continue in the coming years.
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Data from McKinsey show that COVID-19 has impacted net consumer optimism in several nations. However, the epidemic has also made e-commerce more widely used, particularly for necessities.
This creates a significant opportunity for cross-border sales into nations where e-commerce penetration has historically grown more slowly.
Marketers will need to conduct their own study to determine whether a global expansion is appropriate for their online business. Several points to think about are
Does the particular market require my product or my category?
Will my marketing work across cultures, or will the brand have to spend money on special promotions?
Do we need to localize our e-commerce website for users outside the country?
Which forms of payment are most common in the targeted nation/region?
How will we handle shipping across borders?
To determine whether it will be worth it for your company to take advantage of international e-commerce opportunities, consider all the costs associated with promoting, selling, and shipping internationally. For example, providing a simple mobile purchasing experience will be essential when marketing to mobile-first regions like APAC, Africa, and the Middle East.
Automation For Productivity & Growth:
Automation aims at completing a task with the least amount of human involvement. That could entail anything from using a CRM or marketing platform to schedule emails, Zapier to automate processes, or utilizing cutting-edge technology to assist with the hiring process.
Robotics and machine learning, however, are some of the topics that are now being discussed most frequently in relation to future eCommerce trends.
Funding is a reliable predictor of future trends, and this one is successful. Just recently, a $15 million funding round was secured by an autonomous forklift developer, while an open-source conversational AI platform for chatbots and voice apps received a fourth round of funding.
Big data, artificial intelligence, and machine learning can do more than just automate; they can also automatically optimize several operations that now require excessive amounts of time and effort or are impossible to complete.
Increased eCommerce personalization, which can improve the shopping experience for customers, is one area it’s expected to drive- “Websites that recommend items you might like based on previous purchases are using machine learning to analyze your buying history,” said Jeff Goffinet of Dunn Solutions Group.
He further adds, “Retailers rely on machine learning to capture data, analyze it, and use it to personalize a shopping experience, implement a marketing campaign, price optimization, merchandise supply planning, and for customer insights.”
PWAs & mobile commerce:
To provide an online experience that is more similar to a native app than a regular web page, progressive web apps (PWAs) leverage the most recent web technology, especially on mobile devices.
Because they enable a dependable user experience, blazingly fast speeds, and engagement features like sending push notifications and showing up on a device’s home screen like an app, they are becoming increasingly popular.
Mobile device shopping has become commonplace and is no longer just a novelty. Over $432 billion in smartphone sales are anticipated to be generated in 2022, a considerable increase from current levels.
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Many prospective customers use their mobile devices when you consider the prominence of mobile-first shopping in regions outside of the United States, such as the Asia Pacific area, Africa, and the Middle East.
A PWA combined with a headless commerce architecture can give you the control you need to make mobile buying quick and secure. Giving marketers and developers their own spaces to play reduces the likelihood of changes having unanticipated effects and gives customers a native mobile app experience. The commerce engine is decoupled from the store’s front end.
Consumer Experience: The Driving Force of Development:
Brands will have to put in more effort to offer enriched and engaging shopping experiences that keep their customers’ attention.
Brands seek innovation as the capabilities to produce unique experiences are becoming more widely available. How, then, can you ensure that your clients have the finest experience?
3D & Augmented Reality:
Through video, customers can be fully immersed in both the brand and the eCommerce experience the brand is providing. A compelling video gives your customers something to interact with and presents an opportunity to evoke emotion and engagement.
So, we can see the era of 3D and augmented reality taking over eCommerce.
Omnichannel:
Don’t stop at your digital storefront’s perimeter. Including your online store, the brand experience must present a unified story across all platforms and devices.
In figuring out how to address the “in-person care that customers have grown to anticipate in retail,” A contrast agency founder Elliott Davidson sees a lot of unrealized promise. How, therefore, can e-commerce websites take advantage of tailored client service?
To which he states- “One of our clients offers FaceTime chats so that customers may ask as many questions as they want about the product. This is a terrific example of a retail company going above and beyond. With high ticket sales, they provide a custom service and carefully consider the demands and expectations of the consumer, according to Davison. Start considering how headless commerce might help you better realize your goal for brands contemplating user experience enhancements.”
Personalization of Payment Options:
PayPal, Apple Pay, Venmo, Sezzle, etc. There are new payment options everywhere you look. A larger array of payment choices are also growing more and more popular as younger generations become more digitally savvy. Even nevertheless, a TransUnion survey revealed that Millennials use fewer credit cards.
Because of this, many online retailers now provide financing options with low or no interest. Klarna, Afterpay, and Affirm are enabling customers to make significant purchases without paying the whole amount upfront or using a high-interest credit card.
Brands must embrace as many payment alternatives as possible. This includes the buy-now-pay-later (BNPL) choices to expand their target market, particularly the under-40 age group.
According to their credit scores, people were once split into prime and subprime groups, according to Jeremiah Griffin, director of business development at Katapult. “There are now additional financing tiers.” Businesses can expand into new market segments with the help of cutting-edge lease-to-own payment systems like Katapult.
Cohesive & comprehensive data analysis:
Big CPG brands migrating online and incorporating a DTC channel into their revenue stream has been a recent trend over the past couple of years. Evan Perkins, senior account manager for large companies at BigCommerce, claims that the data, not the new money source, is what is driving this trend.
Some conventional CPG companies that sold to big retailers started feeling too far away from those who used their products. Selling DTC is one way businesses get to know their customers and gather information to help them make more informed choices about targeting, retention, and other things.
Data will become even more crucial for organizations looking to increase e-commerce sales in the upcoming years.
The founder of the UK digital agency Contrast, Elliott Davidson, predicted that more e-commerce companies would use data internally in the future- “In-house marketers can make a lot more strategic business decisions and deeply analyze the data to understand what is and isn’t working. To make any future e-commerce decisions, organizations will increasingly need to conduct data analysis.”
Digital Transformation of B2B:
With the help of COVID-19, B2B company, including major industrial companies, is finally undergoing its own real-time digital transformation. Furthermore, it’s likely to have long-term advantages.
We’ve seen how fragile B2B business can be in the last three to four months, according to Space48’s digital commerce consultant Pete Robertshaw. Even those who were already online still lacked the optimal digital experience.
Robertshaw advises B2B companies to consider their web presence more carefully and get to know their customers better- “Some of the B2Bs we visit believe they understand the needs of their customers, but when it comes to enhancing their digital experience, they don’t. UX and CX are vital for both B2B and B2C, not simply for the former. Customers desire a seamless buying experience.”
We’ll start to see more innovation in adjacent fields like content marketing and development, customer communications, and the ways B2B organizations convey their brand stories online as more and more of these companies go.
Aviv Baron, the founder of Direct Payment Group, believes that in order to increase efficiency for both the buyer and the seller, B2B will even start to provide more payment methods.
Baron says, “We’re developing a universal invoicing system, enabling merchants to provide alternatives like pay by credit card, e-check, and ACH. Businesses will have more access to information about the payments they receive thanks to that system. There are already some B2Bs that allow for installment payments, and I predict that number will grow over time.”
Social Commerce:
Despite concerns that a lack of social connection and presence might deter customers from choosing online over brick-and-mortar stores, e-commerce swiftly demonstrated its worth. Social media has made it possible for us to have both.
Every brand’s marketing plan already recognizes the value of having a social media presence, but modern developments have added a commerce element to make platform shopping easier.
Social commerce will become more vital as Millennials and Gen Z’s purchasing power increases. In those age groups, 47% of respondents said they had some faith in social media influencers.
Both Facebook and Instagram have taken steps to make it possible to make purchases without leaving the platform. Facebook Shops, which was just launched, has made selling on the network much simpler. Checkout on Instagram was first released last year in beta.
Wrapping Up-
Every brand does not have to run behind every trend.
If you run a B2B company that sells large machinery, just being on Instagram won’t boost your revenue. Similarly, voice search won’t be your first concern if you sell custom gifts for particular events.
Prioritize usability above anything else. That applies to your perspective on the operations and client as they shop. A dazzling onsite experience or bells and whistles cannot replace a foundation of reliable systems and best practices. Once you have it down, start taking calculated risks and testing frequently.
FAQs:
Q- How to figure out whether cross-border business is good for my business?
A- Consider the demand, localization, payment methods, and international shipping. You must weigh all associated costs to decide whether brand expansion is worthwhile.
Q- How do I automate some of my back-office functions?
A- Schedule emails, automate chores, help with hiring, engage with prospects, and streamline warehouse operations with automation.
Q- Voice commerce? How useful is it?
A- Voice commerce makes purchases using voice assistants like Google Home or Alexa from Amazon.
On average, 80% of customers using voice assistants to make purchases are happy with the process. By 2024, voice commerce is anticipated to reach $30 billion and higher.
Additional read-
a. SEO Trends to watch out for 2023.
b. Free template to strategize your SEO.