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Are You Ready for eCommerce’s $1 Trillion-A Year?
eCommerce is at an all time high with eCommerce sales exceeding $3.5 trillion in 2019.
While eCommerce is rapidly growing, it is constantly evolving to meet consumer demands. Companies that can adapt and rise to the challenge will have a chance to get a piece of the $1 Trillion pie that is expected to be formed in the U.S. this fiscal year.
We will be discussing the key trends shaping the future of eCommerce in the next article. How your eCommerce company can position themselves to capture a share of the billions of dollars flooding into the industry.
What are the trends in eCommerce? How to prepare for them
Three main goals are driving the eCommerce industry to change over the next few years:
- Both buyers and sellers will have greater convenience
- Rich brand and shopping experiences
- Sell anywhere, everywhere
These goals can be seen in many trends that have emerged over the past few years. These trends include:
- Online competition at record levels and global expansion
- Retail will be influenced by new consumer behavior
- Fulfillment as a competitive advantage
- To challenge market dominance, customer experience
We’ve outlined how merchants can navigate these turbulent waters.
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Trend 1. Record-breaking online competition
The eCommerce industry will continue to grow, but there will be more competition.
Digital competition heats up as legacy wholesalers move online and global retailers expand their eCommerce efforts. Online shoppers are also being faced with competitors in product categories that aren’t traditionally in high demand, such as household goods, personal care, and health. International competition is also emerging. Consumers began to shop outside of their own countries as COVID-19 became more popular. Cross-border eCommerce grew by 21 percent from January 2020 to June 2020. Luxury goods sales increased by 39 percent.
Globally, the eCommerce share of retail sales has been increasing for at least five years. This trend is expected to continue in countries where ecommerce penetration has been slowing.
The future of eCommerce will be influenced by emerging markets like India, Brazil, Russia and South Africa. By 2022, a potential 3 billion buyers in emerging markets will be able to access the internet. According to the same report, 20% of all retail sales will be made in emerging markets by 2022.
These markets are a huge opportunity for eCommerce companies to expand and reach new customers. Despite eCommerce growth having skyrocketed over the last year, the U.S. still has a eCommerce penetration of only 17 percent. These emerging markets will see many new eCommerce companies that can tailor their services to local markets.
How to prepare yourself for tightening eCommerce competition
The global eCommerce market is expected to grow to a staggering $5.9 billion by 2022. This will only increase the fierce competition. To capitalize on the eCommerce boom, brands must be at the forefront of their game and keep up with the consumer demand to stay ahead. While every company’s vision of what that means will be different, those who are at the top are optimizing commerce across multiple channels, such as online marketplaces (think Amazon, eBay), social media platforms like Facebook and Pinterest, retail and wholesale. This means that your team can create seamless, immersive experiences no matter where your customers are. A fully integrated eCommerce platform will be required by merchants to allow them to sell on the most popular marketplaces, as well as display prices in local currencies. You can also use sales tax automation tools.
Wix online shops that successfully sell across-border on average 680 per cent more, indicating the need for an internationally focused sales strategy.
Trend 2. Trend 2.
The future of eCommerce will be driven by several changes in behavior over the next few decades.
One, consumers expect intuitive, easy-to-use digital experiences across all channels and devices. Brands that are able to meet these expectations see the best returns.
The biggest trend in retail’s future is the desire for simplicity, convenience, and immediate results.
A shift in consumer behavior as a result the pandemic has been a shift in lifestyle and consumer spending habits. The home has become an office and entertainment space, with less interaction between people and the environment.
Online demand for new product categories is growing worldwide, despite consumers being reluctant to buy in-store. Online sales are now booming in areas such as health, hygiene, home and food, as well.
While online shopping is growing faster than traditional brick-and mortar retail, it does not mean that physical stores are less valuable.
How do you prepare for changing retail dynamics
For eCommerce brands that can create unique shopping experiences, brick-and-mortar locations will be a valuable asset. The future of physical retail stores is thought to be unique experiences. An POS system equipped with a customer management tool (such as Wix CRM), can enable you to replicate online experiences that are happening on your website or through social media channels in your store. WixPOS allows you to offer loyalty points for both in-store and online purchases. With the right WIX App Market integration your customers will feel valued at all touchpoints of your brand.
Trend 3. Fulfillment is a competitive advantage
Fulfillment centers are needed to ship and deliver products in the fastest time possible due to increasing online sales. Brands are now investing in more efficient and automated fulfillment centers that provide full-service services.
Today’s consumer wants a seamless shipping experience that is fast, free, sustainable and brand-named. Globally, 64 per cent of consumers want their orders to be shipped free. 67% of U.S. consumers are looking for next-day, same-day, or two-day delivery. 72% of global consumers desire brands to use sustainable packaging.
Brands are now looking at fulfillment as an asset to meet their growing fulfillment needs and reduce the high fulfillment costs. Technology investments can help make this process more efficient and automated.
Robotics and machine learning are two of the most popular fulfillment technologies. Already, robotic devices, drones and other autonomous vehicles can be used to enhance the supply chain to locate, identify and transport goods in warehouses. The United States is also closer than ever to fully autonomous freight vehicles.
Making fulfillment a strategic asset in your eCommerce business
Automation will play a major role in the growth of your online business. This includes marketing automation and warehousing. Automation can free up time and resources to do more important work as well as improve supply chain management. Automation software, for example, can set up inventory alerts to notify you when stock is low.
Machine learning and big data are doing more than just optimizing and automating processes. It is predicted that machine learning and big data will drive higher eCommerce personalization which will give customers a better shopping experience. Websites that suggest items you might like based upon your past purchases use machine learning to analyze and recommend products.
The last mile is critical to eCommerce success. However, eCommerce success does not stop at the warehouse. The consumer of today has little tolerance for shipping delays. Only 1/5 (21%) U.S. customers say they will forgive brands and retailers for any COVID-19-related service interruptions. Fulfillment is a key component of customer experience. Even the most sophisticated eCommerce tools can’t replace it.
A third strategy that many brands have had success with is the blending of in-store and online experiences, such as pick-up-instore, buy-online (BOPIS), or buy-online and return-instore (BORIS). Salesforce discovered that brick-and-mortar retailers that offer BOPIS in their brick-and mortar stores saw a 27 percent increase in digital revenue in Q1 2020, compared to the 13 percent growth for those that didn’t.
To maximize their competitive advantage, retailers must be consistent with their fulfillment strategies. Wix eCommerce makes it easy to open a store and pick it up. This will allow you to cater to customer needs (and make your mark in a competitive market).
Trend 4. Trend 4.
Brands will need to be more creative in order to offer compelling shopping experiences to keep their customers’ attention as large eCommerce marketplaces like Amazon, Etsy and eBay continue to dominate the market.
These experiences are becoming increasingly accessible and brands are seeking to innovate beyond the digital storefront. The brand experience must be more than a digital storefront. It should tell a consistent story across all channels, devices, contexts, and platforms.
Many brands today use algorithms to gather data about consumers to optimize their marketing campaigns and personalize the shopping experience. Consumers are becoming increasingly tired of these automated experiences and want a personal touch. Shoppers desire to feel that there is someone behind the computer screen who cares.
According to research, 41% of buyers have switched to companies they don’t like because of poor personalization. Another 48 percent said they spend more with companies that offer personalized shopping experiences.
How to create compelling shopping experiences
eCommerce websites need to be able to both understand customers’ needs and provide the best customer service experience. Headless commerce is a method that many brands are exploring to improve their customer experience. Headless commerce allows for greater flexibility and adaptability by separating the front and back ends of an eCommerce application.
In order to create a truly omnichannel shopping experience, headless commerce is crucial. The front end, which can be accessed via a web browser or mobile device, gives customers a customized experience. It automatically connects their personal data to the back end to provide personalized product and pricing information, as well as other content that is tailored to their needs and interests. Customers feel that the brand is personal to them which leads to a lot of brand loyalty. Companies can eliminate technical headaches by the back end.
Brands can also stand out by opening up payment options to reach new markets and offer more options, creating a more personalized experience for customers.
To reach a wider market, especially the under-40s, brands must accept as many online payments as possible. This includes buy-now,-pay-later ( BNPL) options like Klarna, Afterpay and Affirm (payment gateways available to Wix eCommerce merchants).
High-ticket transactions have increased by 25% in Wix stores that are connected to BNPL providers.
How to prepare your business for the future eCommerce
eCommerce is constantly changing. It is vital that you keep up-to-date in order to remain competitive in the industry.
Although not all brands need to profit from every trend, it is important to understand the trends and determine if you can use them.
Many businesses have had to reevaluate their top priorities and moved eCommerce strategies up the ranks in response to the pandemic. According to the Harvard Business Review, retailers invested $10B in eCommerce acquisitions, partnerships and investments between May 2020 and July 2020. These investments included logistics capabilities that enabled last-mile, asset light approaches such as dark stores (retail distribution centres that only cater to online shopping) as well as portfolio investments in digital capabilities like AI and blockchain.
Some brands find it most profitable to invest in existing innovation efforts and accelerate them. Others, however, need to rethink how they view consumers and the future eCommerce.
Merchants today must not ask “What ecommerce investments should I make?” but “What customer experience do I have to offer?”