The e-commerce industry saw major traction in 2020. Technology innovation, easy scalability, increased internet penetration and changed user habits due to COVID-19 let the industry improve experiences and compete against brick-and-mortar shops. Engaging customers directly is top priority for brands, and in this era of widespread awareness and cutthroat competition, the only way to survive is to stay ahead of the curve, identify lagging areas and capture evolving trends at the onset.
11 Trends Accelerating the Future of E-Commerce
How to identify and prioritize where to invest
Revenue generation in e-commerce industry is formulated as follows:
Emerging E-Commerce Trends
“Trend is your friend” is an age-old adage– the ones who invest at the onset reap the maximum benefits. The pandemic has brought the e-commerce industry to forefront. The following trends have tremendous potential to help customers instantly find the exact product at the right time, make the buying decisions with trust and encourage buying in the future.
1. Voice Search
According to Google, 27 percent of the online global population is using voice search on mobile. Voice, however, returns only a few top results based on past buying history, user preferences and speech processing.
Doing business in the future will be survival of the relevant. Brands must ensure their e-commerce site is speech-query friendly, relevant to search assistants and accommodating to consumers that prefer contactless options. Without optimizing for this new channel, brands miss opportunities to tap into a new source of consumer data and generate critical insights.
2. Visual Search
Search engines are gateways to information, but reliance on user ability to articulate exactly what they’re looking for leaves e-commerce experiences lacking. For example, English has around 1,71,000 words and an average person makes use of 20,000-40,000 to convey or articulate his/her message. Say a shopper wants to buy a specific sweater in a particular color that they saw on social media. If it’s a rare shade, the shopper may not know how to accurately describe it in search, making it harder for the shopper to find exactly what they’re looking for.
Visual search lets customers click and upload images of desired products to search for options to buy – enabling greater accuracy of results. Brands can partner with third parties like Google Lens, Pinterest Lens and others to elevate user search experiences in a more visual way.
3. Influencer marketing
It’s imperative for brands to understand how to reach the right people through the right channels. Seventy-four percent of consumers trust influencers while making buying decisions, and brands are experimenting with ways to integrate influencers into the buying experience. For example, Lancome partnered with influencer Chiara Ferragni and livestream platform Livescale for an online release event that attracted more than 46,000 viewers and 2,00,000 likes/comments.
4. Omnichannel connected experience
Ninety-eight percent of Americans switch between devices in the same day, which means customer journeys are now happening across more devices and channels than ever. Consistency across channels increases customer engagement, boosts trust and makes the journey less complex for users because they can seamlessly resume their customer journey from any device.
Omnichannel is all about providing brand presence on all platforms under a single source of truth so that product pricing, promotion, stock availability and user journeys appear the same everywhere. Brands can partner with platforms like Salesforce Commerce Cloud, Magento and Shopify to provide seamless experiences to customers.
5. Video Engagement
Content quality is a make-or-break deal for brands. Around 54 percent of consumers want to see more videos from brands and companies they pursue.
Videos, by format, are more convenient to digest and have a compelling influence on path to purchase. Seventy-two percent of consumers say they would prefer to watch a video rather than read text to find out more about a product or service.
Advancement in technology that captures, hosts and shares videos has revolutionized how content adds to business strategies. Retailers can use video platforms to create compelling animated product videos or set up a livestream event in a matter of minutes. That same video can be shared across channels, with the potential to reach more than 4 billion internet users.
6. Cognitive virtual assistants
Americans spent 20 percent more time on messaging apps in 2020 than in 2019. But the growth has its own operational challenges as some brands reported higher volumes of customer support calls, returns and exchanges. Chatbots equipped with Artificial Intelligence (AI) and Natural Language Processing (NLP) reduces operational overhead and cost by learning customer preferences over time and answering questions swiftly and directly.
7. Virtual consultation
Sixty-nine percent of consumers believe product demos best assist them when making a purchase decision. Virtual consultation has the potential to do more, offering human interaction and the ability to ask and answer questions in real time.
Flexibility in timing, availability and tailored recommendations gives virtual consultations an edge over physical stores when forming strong customer connections that influence purchase decisions positively. The inertia to adapt to this new way of shopping has been broken by the pandemic and increasing prevalence of 5G networks will surely act as a tailwind to its adoptability.
8. AI-based hyper personalization
Machine and deep learning are evolving as complex AI algorithms closely monitor user behavior, preferences and reactions to various marketing tactics during different times of the day, week, month or year. AI lets brands offer timely and relevant product or search recommendations, boosting conversion rates by tapping into impulse buying patterns and deeply understanding the customer.
For example, curated subscriptions models use machine learning to provide highly personalized experiences. For example, a pet care brand that delivers custom food blends for a pet based on a detailed profile provided by the consumer, or a beauty brand that offers a surprise selection of new cosmetics based on a user’s preferences.
9. Augmented reality (VTO)
Retailers are using virtual try-on tools to convert online customer traffic. Seeing traction in the market, market leaders like Levi’s are taking it a step further by creating social environments where friends co-watch and enjoy shopping together online. Integration-ready third-party AR tools like Perfect corp helps brands reduce time to market.
10. Interest-free wallets
Interest-free installment wallets are becoming a popular way for budget-conscious consumers to feel more confident about purchasing by offering flexible payment options with less stringent onboarding processes and low risk on credit ratings. Major brands like Adidas, GAP and Bed Bath and Beyond have already started partnering with wallets like Afterpay to allow consumers to choose how and when they want to pay for items. The partnership between retailers and wallets help organizations secure a sale, while cutting back on buyer uncertainty. One wallet company claimed 40 percent increase in average order value post integration.
11. Demand forecasting
Retailers lost nearly $1 trillion in sales because of stockouts in 2018. Inventory management also becomes more complicated with e-commerce moving to hyper-personalization and wider distribution across both online and offline channels. Streaming analytics helps retailers in omnichannel inventory management by predicting demand and proactively notifying on stock replenishment.
After enduring the COVID-19 pandemic, it’s time for companies to build on what they’ve learned. Future e-commerce leaders will be those that make the most of increased traction and smartly capture the evolving trends on the onset. Prioritizing business strategy, customer need and current capability goes a long way when outpacing competition. Identify value pools to quantify market size, define the target experience of the most valuable user journeys and conduct research to understand the feasibility and viability of change. The brands that understand where the best opportunities lie will drive the future.