By: Pavlos Tsulfaidis
Date: Dec 11, 2016
According to a statistics portal, e-commerce revenue in 2016 (to date) is close to mUSD 1,182,575 worldwide. The revenue growth is expected to be close to 10.72% at CAGR (Compound Annual Growth Rate), resulting in a total volume of mUSD 1,777,095.70 for 2020. In 2016, user penetration was 65.1% and will increase to 70.18% by 2020. These figures explain the growth statistics in e-commerce.
To achieve this business goal, it's not enough for them as e-commerce providers to stock unique and great products. Customers have become knowledgeable and demanding. However, the shopping experience means more to customers than the product they buy. They expect a high level of customer service, which includes shopping convenience, timely delivery, the payment process, and loyalty programs. The focus is clearly on the shopping experience.
If online retailers want to keep up with their competition, you need to follow the latest trends in e-commerce. These trends are linked to technological advances such as omnichannel integration, context-based shopping, Big Data analytics, the use of beacons and sensors, and other multiple devices.
THE LATEST TREND IN E-COMMERCE
Fierce competition has made customer brand experience critical. Brands that are able to predict customer expectations based on previous purchases can meet them and actively engage with their customers online and mobile to win. Taking a purely brand-centric approach reduces the likelihood of generating revenue and growing their customer base. To remain competitive, brands need to identify the latest trends in e-commerce so they can participate in the growth curve and zenith at the end of the decade.
1. Smartphones dominate the market - Criteo suggests that mobile's share of the e-commerce market will grow from 40% in 2015 to 70% in 2017. According to a study, smartphone share of web traffic for e-commerce store purchases was 45.1%. The study predicts that the smartphone will reach 60% share by the end of 2017. The smartphone makes it easier and easier for retailers to reach customers.
2. Beacons and RFID Tags Drive Higher Sales - Beacons are wirelessly connected devices that help retailers send and receive information. The Bluetooth devices record the movement of people within a store and also provide relevant data to the potential customer. Beacons connect offline and online worlds, for example, when a customer spends more time in a particular area of a store. Beacons notice this and send information via e-commerce pages. The report suggests that beacons can increase sales from $4 billion to $44 billion in 2016. By the end of 2018, retailers will have installed about 3.5 million beacons. Over the next five years, $2.5 billion will be invested in RFID tags and beacons (both IoT devices). No matter the location, beacons provide a frictionless shopping experience.
3. Big Data analytics increase margins - Traditional analytics will fall behind and be replaced by Big Data analytics (as an example, Microsoft Power BI). Retailers already using Big Data have seen a 60% increase in their business margins, a remarkable improvement in labor productivity. Companies using predictive analytics systems, analytics in real time provide insights into customer habits, behaviors, problems that arise, and enable services that address them. They can tailor offers based on real-time analytics. So this tool will significantly improve the shopping experience and sales.
4. Omnichannel dominates - According to Google, nearly 85% of customers begin their purchase in one medium or channel and complete the purchase in another. Multichannel sales will increase over the next few years. The trend promises to bring together the best of both worlds, online and offline. The pace of change in e-commerce is driving retailers to offer an omnichannel experience to their customers.
5. Context-based shopping and an enhanced shopping experience - To maintain a competitive advantage, it is important for e-commerce retailers to create a user-centric customer experience. The majority of decision makers (nearly 89%) believe that customer experience will become the deciding factor. It will be the all-important point that can give e-commerce merchants a competitive edge. Correct context-based information to guide customers in their buying decisions represents a new form of personalization. Context-based selling takes the customer experience beyond product recommendations and personalized greetings. Customer-centric technology can record the customer experience, anticipate needs, and provide information to make a seamless shopping experience possible.
6. Localized Ads - The localized ads market will grow from 4.3 billion in 2014 to 18.2 billion in 2019. By localizing customers, you can send them personalized messages and ads. These ads are based on real-time data, which gives brands the ability to deliver personalized moments to very precise audiences. This allows companies to tailor their offers and ads for specific markets to local trends and local language.
7. Flexibility in payment methods - Payments will shift more and more to mobile devices. In addition to traditional methods such as credit and debit cards, customers will use flexible payment methods. Online merchants must therefore first understand their customers' preferences and include them in payment methods in their payment process. Using payment gateways preferred by customers will also be cost effective.
8. Loyalty Programs - Studies show that to attract new customers, companies need to spend 5 to 10 times as much as when they sell products to existing customers. Statistics show that existing customers spend 67% more than new customers. Reward and loyalty programs work like a magic wand. Loyalty programs typically target customers who bring in the highest sales. Whether it's a points system or rewards or free extras, loyalty programs help increase conversion rates. The main goal of loyalty points is to improve customer retention and satisfaction.
9. Magic Mirrors - This is one of the most innovative new trends in e-commerce. Brands are using Magic Mirror technology and RFID tags to help let customers try on virtual outfits. Touchscreen mirrors help shoppers adjust different lighting options, sizes and colors. It can also be used to record what has already been tried on. Investing in mirror technology makes sense because it's a key driver of conversion, an innovative new way to engage with customers.
10. Flash Sales - Buyers are impulsive. When they get a good offer, they tend to make the purchase even when it wasn't actually intended. Impulse buying is key to the success of Black Friday, Cyber Monday or Singles Day. Flash sales are surprising, and suddenly there are deals at an unexpectedly low price. In 2015, Cyber Monday saw the highest sales figures in the USA, while in China it is Singles Day that attracts the highest sales. It is assumed that such days will generate further sales growth in the coming years. Even if the targeted audiences don't buy anything on the day itself, it increases the chance that they will remember the brand and look at the product again on the website at another time.
11. Faster and Instant Delivery - Same day delivery will soon be the norm. Customers are becoming increasingly impatient and less willing to wait 3-4 days for a product ordered online. E-commerce giant Amazon offers same-day delivery, among other things, through its Prime option. Same-day delivery and fast deliveries guarantee that your target audience will come back to your e-commerce store. This gives you a competitive edge over other stores and pushes your customer count in cross-border sales.
Keeping up with the latest trends in e-commerce will pay dividends for online retailers. The latest technology being used by e-commerce merchants is focused on improving the customer experience. So, compared to the last few years, the main focus will be on customer experience and frictionless shopping experiences.