Believe it or not, e-commerce has changed drastically in the past decade and will continue to in 2020. Because ecommerce is a constantly evolving industry with market trends shifting at a rapid rate, you might be wondering what the future of ecommerce is.
According to Oberlo, global ecommerce sales have amounted to almost 3.5 trillion dollars just in 2019 alone and is expected to hit more than $6.5 trillion by 2023.
It’s also no surprise that COVID-19 has caused a major shift in the ecommerce market.
In this article, we will discuss the evolution of e-commerce. We will also get into e-commerce during the COVID-19 pandemic in 2020, and the future of e-commerce marketing. For help with your ecommerce business, contact SEO Design Chicago today!
The Evolution of E-Commerce
Our economy has witnessed the evolution of commerce in the last 20 years. The first book was sold on Amazon in 1995. Since then, consumers have never looked back. Now in 2020, it’s not uncommon to see a bunch of Amazon Prime packages on your neighbor’s doorstep. You might also spot the Prime car driving around and making deliveries. We even use Prime for groceries now!
As the needs and demands of consumers have changed so has e-commerce up to 2020. One-day delivery was not much of a thing ten years ago, but nowadays it’s a must. In the early days of e-commerce, customization wasn’t much of an option because the amount of products available online were very limited. Now made-to-order customization (like NikeIDs for instance), is a fairly common thing available to consumers.
What if it’s too customized for big companies to make?
There are online stores like Etsy and Shopify that let users upload their own self-made goods to a marketplace, allowing them to make a profit.
What if you’re not an arts and crafts person, but would like to tap into the market of custom designs? That is definitely possible!
Companies like Custom Ink leave the task of custom designing to the customers with its built-in design tool, rather than having the company design it themselves. This is because Custom Ink’s business model doesn’t rely on designing but what happens next.
E-Commerce Trends to Use in 2020
Because the COVID pandemic has caused a shift in e-commerce, traditional retail sales have drastically declined. However, e-commerce has increased by 129% as of April 21st.
Globally, customers are shifting their buying habits and COVID has done nothing but accelerate that. By the end of 2020, e-commerce sales are expected to reach $4.2 trillion.
However, if you’re thinking of starting an ecommerce website, it’s important to know that cash won’t just start flowing in once you launch your online store. With that being said, you must be able to keep up and cut through a constantly changing economy.
Below are 3 trends to use if you want to rise up in the ecommerce industry:
As mentioned before, there has been a growing trend in e-commerce companies using personalization technology. This essentially gives customers the customized design experience. Unlike traditional retail, e-commerce doesn’t use a retail salesperson to recommend products that the customer would be interested in based on tastes and preferences. Instead, artificial intelligence on websites picks up on this by collecting data such as search queries, page visits, purchase history, and much more. This is called behavioral advertising.
However, data harvesting has been the center of controversy lately where customers are wondering how much of their personal data should be accessed, all for a personalized shopping experience. Although surprisingly, more than half (57%) of online shoppers are comfortable with sharing their personal information with a brand they trust. Furthermore, customers feel a lot more important when you’re catering to their shopping experience.
Celebrity and Influencer Endorsements
How does a celebrity or influencer endorse a product? It’s when he or she promotes a company by sharing a social media post. They usually tell their followers about why they love said product, and why they should buy it too.
Social commerce is directly selling through social media. It’s easy to get confused with social media marketing, which relies on redirecting customers to your site to make a purchase, but social commerce allows customers to checkout on the social media platform they’re currently using.
A lot of businesses see the value in content-created sponsored partnerships because social commerce with influencer marketing is a power combo that can result in increased sales. As a matter of fact, 65% of influencer marketing budgets will see an increase in 2020 alone. Also, seven percent of companies plan on investing over a million dollars within the next year.
What’s interesting is that smaller ecommerce companies are starting to leverage “micro-influencers.” This is when they partner with people who have around 1k to 100k followers because they are usually less expensive to work with, unlike celebrities or influencers with 100k+ followers.
Interactive Product Visuals
Online shoppers have dealt with the issue of not being able to test or try out a product before they make a purchase. Sometimes, they end up regretting that purchase. Even high-resolution images themselves are not enough for customers to buy a product. Now with interactive product visuals, such as 360-degree viewing images, customers are able to be more confident in their purchasing decisions online.
Ecommerce has changed so much in 2020 in that online reviews are not enough for customers to purchase a product anymore. Nowadays, customers are more conscious about which companies they give their businesses to. Trust plays a major part in their decision. Which is why being able to experience a product before clicking that purchase button is important.
As you can see, getting on top and ahead of trends by leveraging the available technologies can benefit e-commerce brands by increasing sales, attracting potential customers, and building credibility in its industry.
How COVID Has Affected E-Commerce
According to TechCrunch, COVID-19 has accelerated the shift to e-commerce by 5 years.
A staggering report showed that 60% of department stores are to decline for the year of 2020, while e-commerce is expected to increase by 20% at the end of 2020.
COVID has also caused a shift in which types of goods customers deemed essential. For instance, marketers saw a decline in demand for clothing. This is because lockdown forced consumers to work and learn from home. Not to mention social distancing laws have made social gatherings almost non-existent.
On the other hand, categories such as groceries, food delivery services, alcohol, and home improvement materials have increased by 12-16%. Interestingly, megastores like Walmart and Target were innovative enough to embrace e-commerce. Walmart actually saw their ecommerce sales increase by 97% while Target’s services also grew by 273%, thanks to pickup and delivery services.
Because of exponential increase of e-commerce sales in 2020, the bar has been set very high in terms of what companies are expected to achieve in the next fiscal quarter. Companies such as IBM wonder if this was more of a temporary shift to online spending rather than a long-term impact. Customers have already begun to shift away from physical retail stores. But in short, the pandemic has drastically accelerated the ecommerce industry ahead by five years.
The Future of E-Commerce Marketing
The role of emerging international markets will increase
Emerging markets include India, Russian, Brazil, South Africa, and China.
It is estimated that around three billion buyers from these emerging markets will gain access to the internet by 2022. That’s a drastic increase in the market. What makes this even more thrilling for the ecommerce industry is that these emerging markets are virtually untouched by them as of now. This means that e-commerce businesses have a lot of potential to reach new customers.
Rise in B2B
Because of the advance in technology, making businesses more efficient and profitable, B2C no longer dominates e-commerce whereas B2B sales are expected to increase to $6.6 trillion in 2020.
Companies are outsourcing software, products, and services for their own staff. This means that the system of B2B is no longer wholesaler to retailer.
Automation has become vital to online businesses, spanning from marketing automation to managing inventory. Nowadays, every business department has some form of automation in their day-to-day operations.
What makes automation great is that it gives employees the freedom and resources to focus on more important tasks. For example, warehouse workers who are in charge of managing inventory can use a software to enter data. (Instead of relying on someone to just do it manually on a computer.)
Because of the rise of consumerism and its negative impact on the environment, customers are becoming more environmentally conscious. It’s no longer about which store provides the best deals on products. Now, it’s about the impact their products have on the environment. For instance, plastic is no longer desirable as now glass is.
Thinking about starting an e-commerce site or sprucing yours up?
SEO Design Chicago has a team of experts that knows the ins and outs of the constantly evolving environment of e-commerce trends and can help your e-commerce business rise up in a competitive industry. For help with your e-commerce site or business, contact us at SEO Design Chicago today!