Online store owners risk seriously lagging behind their competitors without due attention to the new trends, which contribute to the development of e-commerce business. Strategies, trends, technologies, consumers – so many things that e-commerce market players should consider to thrive. In this article, you will learn about the current situation of online sales, predictions for 2020, and top considerations for business owners.
Global E-commerce Overview
According to Statista, global retail online sales reached 3.53 trillion dollars in 2019. It is expected that e-retail revenue will grow to 4.2 trillion in 2020. Although online shopping is very popular all over the world, it varies greatly across regions. The same source says that 19% of all retail sales were made in China, whereas only 6% occurred in Japan.
A leading marketing company Nielsen states that South Korea has the biggest share of total online sales, and China is ranked second in this list. The United States and the United Kingdom follow South Korea and China. Whether weak or strong, e-commerce potential is evident for nearly all regions of the world.
Each year e-commerce players rethink their strategies to discover the key pillars affecting their growth, success, and profit. They search for different ways to retain existing customers and attract new consumers. Although many companies managed to increase their online presence and geographic coverage, there are still a lot of opportunities for growth. To seize those opportunities, business owners should consider all the drivers of their success.
5 Factors Affecting E-commerce Market Success
We gathered top-5 factors that influence the success of an e-commerce business globally. These are market size, penetration of banks and the Internet, the usage of mobile phones, the ease of doing business, and population factors.
The development of e-commerce depends on the wide range of factors like national GDP, the bank services penetration rate, Internet penetration, logistics infrastructure development, reliability of delivery, and conditions of doing business. With regard to these aspects, each country has its growth rate. However, the size of the market plays one of the most important roles. It is known that the largest economies such as the U.S. and China generate more income from online sales than the smaller markets like New Zealand and Singapore.
Traditionally, the bigger markets turn to not only generate more revenue but also be innovators in the industry. For example, Amazon introduced its cashier-less supermarkets and plans to expand that format. Meal kits first originated in Sweden in 2007, continue to gain popularity. Personalized offerings, which have been made possible thanks to predictive analytics, are used nearly everywhere. Walmart and Amazon are offering voice-activated shopping through voice assistants.
Online shopping requires bank accounts. Countries that thrive in e-commerce tend to have high bank service penetration rates. States with weak popularity of bank services feature slower growth of online purchases. Global Findex report 2017 says that in advanced economies, 94% of people have bank accounts, whereas in developing economies, only 63% of citizens use bank services. This data proves that there is still a lot of space for innovation and improvements for banks, fintech, and e-commerce players.
Internet penetration is another driver affecting the success of an online store business. To buy something online, a consumer needs access to the Internet. There is no other way. During 6 years, the Internet penetration rate in Russia doubled, which resulted in online purchases growth from 3 billion dollars to 13 billion. That is an excellent example of a correlation between access to the Internet and e-commerce development.
With the growth of smartphone usage, e-commerce is rapidly evolving into m-commerce. Mobile shopping is much more convenient than buying through computers. It tends to become the number one channel for purchasing. E-commerce players have done their best to provide consumers with an easy and intuitive shopping experience. Buy buttons in social media, one-click checkout, chatbots – all these contribute to the growth of mobile commerce.
Image Source: BusinessInsider
Different sources predict that m-commerce will rise to 300 billion dollars in 2020. With this rise, m-commerce will definitely bring positive customer experience, interactive and convenient shopping, faster purchases, and higher consumer loyalty.
Improved and deeper analytics help businesses understand their customers better. Today, every company, from a startup to a big insurance software development firm, tends to provide personalized offerings. Online stores also explore different types of data, from customer behavior to sales data, to provide individual offerings and better UX.
Economies, where doing business is easy, show better e-commerce growth rates. Usually, these countries focus significantly on such issues as simplified trading procedures, consumer protection, simple taxation. However, there is the other side of the coin. For example, consumer protection guidelines in India may lead to a compliance burden for online store owners and difficulties in doing business.
Top 5 E-commerce Trends for 2020 and Beyond
Brands that understand the fundamental interaction between different sales channels and trends will succeed in 2020. Today’s consumer wants both: to search for the goods in brick-and-mortar shops and to buy online. Each brand should realize both these options for customers. Below are the key e-commerce trends to consider for online stores within the next few years.
Trend 1 – Customer Centricity
The customer-facing approach in commerce is not a new thing. It is the basis of any business. Each year the needs and wants of consumers change rapidly. The reason for that is a fast-changing technology environment that affects nearly every area of our lives. People want to get the required products and services faster. They want to get responses to their inquiries instantly. They require excellent customer support, intuitive user experience, loyalty, and lots of other things that store owners are seeking to offer them.
Image Source: PARX
Customer orientation depends on many factors. A client goes through a long lifecycle, which includes product development, marketing, sales, management, and customer service. In each of these stages, a customer is a central point. Each of these stages should be useful for understanding what your customers want and need.
Personalization is another important thing store owners should consider. To thrive today, they need to shift from a broad audience to individual clients. Retailers invest in advanced analytics to learn more about customer behavior, social activity, previous shopping experience. Based on that data, they will be able to provide consumers with tailored recommendations and offerings.
Trend 2 – Mobile Shopping
Today, the majority of people are buying products and services via their mobile phones. Since mobile traffic has significantly increased, retailers are seeking ways to reduce the gap between a consumer and a browser. Responsive design can bridge this gap. However, a computer screen allows displaying more information that a mobile one. Thus, companies provide only the most important information for mobile versions of their stores. The purchase procedure is also simplified: fewer buttons or one-click checkouts, for example.
Trend 3 – Voice Commerce and Chatbots
Voice ordering has already been introduced by a few companies like Starbucks and Domino’s Pizza. Voice-powered devices engage people to try new and more convenient means of online shopping. Make purchases using your voice only. A few years ago, it would seem impossible. However, the evolution of voice assistants like Siri or Alexa made voice shopping a reality nowadays.
How does voice ordering work? All you need is to communicate with your voice assistant. Just provide your purchasing data and the information about the products you would like to buy. Your assistant will inform you of the products it managed to find, the brand, location, price, etc. You confirm the order, and that’s it.
Chatbots, another convenient way to shop online, continue to be one of the top e-commerce trends. If you don’t want to order products you need vocally, you can do it via simple messaging with a chatbot. Big retailers have already offered their online shopping assistants to consumers. Just answer a few questions in a quick chat with a bot and you’ve got what you need.
Trend 4 – Artificial Intelligence
Artificial intelligence revolutionized the entire world. AI-powered solutions are used nearly in every industry. And e-commerce benefits from it, as well. Let’s see how online shopping business can utilize AI to succeed:
- Develop customer-centric search
- Retarget leads
- Generate new prospects
- Optimize and automate the sales process
- Ensure personalization for multiple channels
- Develop chatbots and voice assistants
- Provide consumers with IoT solutions
- Give personalized recommendations
- Solve issues with fake reviews
- Improve customer experience
These are not the only ways artificial intelligence can help the e-commerce market grow and thrive. Each year, this technology is evolving and bringing lots of new benefits both for business owners and customers.
Trend 5 – Virtual Reality
VR-fueled solutions can be used by online sellers to provide customers with real-world experience. And some companies already leverage the benefits of virtual reality:
- Improve conversion rates with super memorable customer experience
- Offer a 360-degree product view for consumers
- Overcome language barriers
- Increase brand awareness
Virtual reality can help retailers gain a competitive edge faster. Using VR solutions, brands can tell their products’ stories, enhance customer service, allow people to test their products, etc.
Top Things to Consider for E-commerce Market Players
With top success factors and trends for 2020 in mind, companies selling their goods online should rethink their marketing strategies, find and introduce new business values, and focus on investing in emerging technologies. E-commerce, like nearly every other industry, undergoes digital transformation. Thus, online sellers should keep an eye out for best practices and strategies to bring their business to a new level.
So, what are the top priorities for e-commerce market players for the next year? Firstly, meet your clients where they are. Give multiple digital channels for your customers. Some of them love BOPIS (buy online, pick in-store) shopping, the others will love in-store digital tools like a price-checker or an interactive catalog. Research and use analytics proactively to find out what, where, and when your existing or potential customers like to buy.
Secondly, change your organizational culture. Surely, culture may be defined and understood differently. However, the main idea behind it is shared values, which determine how people working in one organization communicate and function together.
Thirdly, use data to the fullest. Before implementing AI and ML technologies for processing your big data, explore what kind of data you have, where it comes from, why it is important, and how you can use it. It will help you avoid using the wrong technology solutions.
To be prepared for high competition on the market, online sellers should also pay attention to the choice of the right software. E-commerce platforms allow managing websites, sales and marketing processes, and various operations related to those. There are many out-of-the-box platforms and custom solutions that can simplify the entire sales and marketing lifecycle. Choose ready-made solutions if you need to optimize your processes quickly. If you have enough time and resources, invest in custom platforms as they fully meet customer expectations. You can choose what features end-users need and what are optional.
Following the trends and changing the organizational culture can improve sales and boost revenue. Use the data to the fullest, improve the customer journey, and establish long-term relations with customers. Don’t lag behind your competitors. Today’s world gives millions of chances and ways for online sellers to enhance their business and bring it to a new level. Customers get what they want and need quicker and cheaper as they also have millions of chances to make a good deal.
Iryna works as a copywriter at Diceus. She creates blog articles as medium information between a company and its prospects and customers. She believes that people reading a copy seek service for themselves. With this in mind, Iryna is focused on clearly expressing her thoughts and speaking the readers’ language. Iryna’s professional interests include research, proofreading, and editing. She also contributes to web content creation, outreach, and content marketing activities.