The most noticeable aspect of e-commerce trends so far is the pace at which this sector is growing. By the end of 2020, global online sales reached $ 4.2 trillion and accounted for 16% of total retail sales. The year 2021 has commenced a new decade in terms of internet shopping and online business technology management. Now, more than ever, it’s essential for businesses to develop a digital presence through their website or e-commerce store.
E-commerce was initially associated with trade that uses electronic means supporting the purchase and sale process: telephone, fax, television and the Internet. Thanks to the latter’s dynamic development, today, e-commerce is mainly sales done on the Internet, which has become a global market gathering sellers and customers. This form of trade includes transactions creating various relationships called e-commerce models.
E-commerce models
- B2B (Business-to-Business) – exchange of products, information or services between at least two enterprises;
- B2C (Business-to-Consumers) – a seller is an enterprise, and a natural person makes the purchase;
- C2B (Consumer-to-Business) – a consumer reports a demand for a given product with a preferred price, and an entrepreneur, if interested, may accept it;
- C2C (Consumer-to-Consumer) – individuals sell a given product to each other, and a company is the operator or supplier of a commercial website;
- D2C (Direct-to-Consumer) – a company produces its goods on its own and distributes them within its own channels.
Reasons for the increase of e-commerce industry
- ease and convenience in finding and selecting products that e-commerce offers;
- increasing consumer confidence in this form of shopping;
- the possibility of making payments using various options.
For entrepreneurs, it means that in 2021 e-commerce will become a priority in companies’ agendas and will intensify their activities in digital technologies.
Online sales are projected to reach $ 4.5 trillion in 2021
Online sales are projected to reach $ 4.5 trillion in 2021. At the same time, this colossal market base today makes e-commerce a process more and more challenging to manage. Knowing major trends in this area becomes a necessity. We have collected 10 of them that outline the current image of e-commerce and define its market in the future.
10 e-commerce trends for 2021
1. Growth of mobile shopping
Mobile devices have been conquering the market in recent years, and people are getting better and better at using them. Their advantage in the field of e-commerce is the possibility of making purchases from anywhere, as well as more and more convenient viewing of products before deciding on a transaction. Already in 2019, Statista estimated that by the end of 2021, 73% of e-commerce sales would be made on a mobile device. With this in mind, an e-commerce website should be built based on a solid responsive design – so that the consumer can make purchases on the phone and tablet as easily as on a laptop or desktop computer.
An answer to the ever-growing number of mobile users is avail of PWA (Progressive Web App), which is considered the most significant trend in creating web applications. It can provide mobile customers with a native app-like experience with features such as being able to work offline and allowing push notifications to be sent. Businesses also need to keep their e-commerce sites running smoothly with a range of payment options, including e-wallets.
2. Better payment processing
Payment processing is part of the customer journey and plays a crucial role in the conversion process. Complicated payment process can cause purchase abandonment, while easy ones can speed up the transaction process. Customers are already used to quick shopping in large online stores without entering too much data.
Ecommerce sites already use payment options such as Apple Pay, Paypal and more. Payment centralisation is expected to make progress in the coming years. For example, when shopping from a foreign company, you can expect the purchase to go through your preferred local payment provider. For those who do business on a global scale, it is advisable to have local payment options and consolidate all payments on one platform.
Examples of popular e-commerce software include Vend – for retail sales on iOS and PC with inventory management, e-commerce and customer loyalty functions, or NetSuite ERP – enabling comprehensive real-time control over the organisation’s financial aspects and scaling along with the company’s development.
3. Competition in digital advertising
The e-commerce advertising market has expanded rapidly due to the pandemic, as has its competition. Strong demand in home-related niches (entertainment, white goods, electronic devices) accelerated this process and led companies to increase digital advertising investment in this category. Large retailers who failed to adapt their business model to this trend before the pandemic have either dropped out of the market or managed to stay competitive but suffered vast losses.
In 2021, e-commerce is to become a priority in every company’s agenda, which will intensify the “arms race” in terms of digital content. Leading fashion brand Natori has used AI to make smarter choices when it comes to spending on digital advertising. The result was a 76% increase in their social media revenues. It should be mentioned that this media rapidly evolved in 2020 as a marketing tool, enabling brands to expand their audience and sell through their channels.
The format that has turned out to be highly successful in regards to reaching the consumer is video. Companies started placing video ads on websites and applications such as Instagram, TikTok and Snapchat. D2C brands can also provide their products with a different dimension by recording videos about them (tutorials, explanatory videos). You can grab your customers’ attention by unpacking your video, converting it to a slideshow, or streaming it.
4. AI in e-commerce – less artificial and more beneficial
The benefits of artificial intelligence in the field of e-commerce have been known for several years, but in 2021 this trend will take on a greater force. AI is already being used to recommend what customers should buy based on their history. It will also be able to support the backend and assist with forecasting. So far, well-known AI applications include customer service, sales and marketing.
Currently available AI tools will help optimise areas such as prices and discounting and demand forecasting. AI and machine learning will increase as retailers look for new ways to improve consumer service. AI will definitely help companies get to know their customers better and provide them with a personalised experience. To improve the shopping experience, AI will support combining customer data with real-time analyses.
Due to the concern for new areas of e-commerce, companies in the world are planning to spend 7.3 billion on AI technology by 2022. At the same time, Ron Smith, editor-in-chief of The Digital Outdoor, emphasises that the complexity of AI and the ability to make it more human is increasingly essential: People want to know that brands care about them, and AI will be programmed accordingly. We have currently seen the opposite behavior on social media, where AIs learn from humans’ more negative remarks […] If bots can learn how to form sentences to convey an emotion, companies can soon teach them to offer comfort and products based on customers’ moods.
5. Augmented reality and product visualisation
In 2019, the research company Gartner predicted that 100 million consumers would be using AR by 2020. AR has become the primary tool for eliminating confusion when buying online, as it helps shoppers visualise products by overcoming the obstacle of not being able to see them live. Customers can see what they would look like with specific clothing or their home with a particular paint colour.
Burrow, the DTC furniture brand, uses AR to make the customer imagine if their couch will fit in their living room. They use a particular application to place real-scale 3D models of sofas on photos taken on customers’ iPhones and iPads. In terms of forecasts, Michael Prusich, director of business development at 1Digital, says: Polls have shown some really powerful numbers in regards to AR too: 35% of people say that they would be shopping online more if they could virtually try on a product before buying it, and 22% would be less likely to visit a brick-and-mortar store. […] AR grants a person the ability to not just see a 3D model of a product but lets a user see how it looks if they were actually wearing it. Some products and industries lend themself better to traditional shopping methods, but AR is going to shake things up sooner than later.
6. Omnichannel sales and multichannel personalisation
Personalisation of customer interaction is now becoming an integral part of e-commerce. Initially, it was limited to email marketing, but technological opportunities have changed that. Today, there are many ways to apply it, such as integrating it with omnichannel selling, promoting customer loyalty and retention. Individual customers then have the same personalised brand affiliation, regardless of the channel used. This concept guarantees adaptation to the unique needs of the consumer, eliminating irritation with irrelevant content. Implementing personalised experiences has shown to reduce bounce rates and have a substantial impact on business revenues.
Worldwide omnichannel sales statistics say:
- 46.7% of all online searches happen on marketplaces (such as Etsy, Amazon, and eBay);
- 51% of the units sold on Amazon came from third-party sellers;
- 37% of consumers use social media to research products and brands.
Most companies are already aware that today’s customers are looking for a consistent shopping experience across multiple channels. Tablets, mobile phones and desktops are just the beginning. Omnichannel is a new take on multichannel, and the goal is to provide that consistent experience to the consumer no matter which channel or channels the seller is interacting with. As an e-commerce sales strategy, it assumes that all available channels of interaction and customer service should cooperate with each other. The more integrated tools a customer has at their disposal to make a purchase, the greater will be their comfort and loyalty in future purchases.
It’s worth getting to know your customers and understanding what is most important to them, and focusing on the channels they visit most frequently. Big data and the use of artificial intelligence (collecting information about visitors to a given website to adapt the offer to their needs) play an increasingly important role in creating both consistent and personalised customer experiences.
To understand customer preferences and improve interactions with them one should use the so-called headless commerce architecture that delivers content and products to any screen or device using API (Application Programming Interface). When striving for personalised recommendations, it is always worth considering that although customers appreciate this form more and more, it is a double-edged sword because consumers also care about their data and privacy.
7. Headless commerce
Most of the mentioned trends are those with which the client interacts directly. When we talk about websites and content management systems (CMS), we mean two different website elements. The front-end refers to the part of it that the client sees. The backend is the administration page, where the content, changes to the design and functionality are introduced.
Headless commerce is a solution that separates the e-commerce platform of the store from the front-end presentation layer. You get a backend interface that allows you to create and add content to the database easily. It can help you achieve flexibility in terms of how and where your content is delivered. Also, it facilitates the creation of a single content source and its delivery to multiple endpoints, including devices belonging to the ever-growing IoT (Internet of Things).
E-commerce Architect Antonio Kaleb, at LARQ, a self-cleaning water bottle retailer, explains: With headless, we get more control over our content and customer journey through checkout. We had a multi-region need that was solved for with the headless BigCommerce solution, allowing us to combine all of our stores into one single domain, for which we have developed additional features.
8. Smart speakers
Amazon’s launch of the Echo smart speaker in 2017 sparked an explosion of voice purchases. Voice solutions in the e-commerce space are very high on the trend list. The number of shoppers via voice search is expected to increase by 55% by 2022. There are no visuals in this channel, and customers describe the product they want to buy. Products purchased by voice customers most often include food, household appliances and electronic equipment.
People are increasingly relying on voice assistants like Google Home or Amazon Alexa. The American company Loop Ventures predicts that by 2025 as many as 75% of local households will have an intelligent speaker. The increase in popularity of this technology is due to the time saved while browsing, entering payment and shipping information; moreover, the device remembers purchases, thanks to which it’s easy to repeat an order. You can also order take-out food using just voice commands.
9. Chatbots in customer service
More and more buyers are convinced to talk to bots and other digital self-service tools. Experts predict bots will evolve in many ways. At the heart of AI personalisation and capabilities is the chatbot, which allows stores to communicate with thousands of customers, giving them a sense of personal attention and thoughtful recommendations. One study has found that over 60% of customers prefer to use chatbots that answer only simple questions to real people because of the faster response times.
Shane Barker, Founder and CEO of Ecommerce: Chatbots […] will drastically change the way people shop online. They will become one of the most important marketing tools […]. And Duran Inci, CEO of Optimum7, recognises that […] chatbots are becoming more intuitive, so do I think that personal shopping assistant bots online will become more prevalent, using previous data to help anticipate new products that you’ll like.
10. Environmentally friendly practices
Fair trade and sustainable development activities will continue to be leading trends in 2021. E-commerce brands that accept these commitments and incorporate them into their development strategies will influence customers’ decisions about their choices. Green consumers are playing an increasingly important role in purchasing power. According to a Harvard Business Review study, 65% of buyers want to buy from brands that have made a commitment to be more eco-friendly.
Another study found that 50% of respondents wanted more environmental awareness in the fashion industry, and 75% – reducing the amount of packaging. Demand for products from companies using recyclable materials, saving paper or energy will significantly affect online sales and the entire e-commerce industry.
Summary
Knowing these trends should not deprive you of in-depth knowledge and analysis of which of them are beneficial for your company and your customers. Only this way can you make informed decisions about what is worth moving forward with. Here are some other tips:
- track publications and people influencing the industry;
- accept up-to-date industry research and trend reports;
- use digital tools and analytics to assess customer behaviour;
- get feedback from your customers through reviews or post-purchase surveys;
- keep an eye on your competitors.
E-commerce is present in many companies from various industries, changing the way they are operating. New technologies have a significant impact on the effects of this form of sale. The latest electronics trends are leading organisations to adopt new business practices that help build a solid internet business. The popularity of e-commerce software is overgrowing – it has never been as crucial as it is now.
