The e-commerce market has exploded in popularity over the past years, and has now gained even more momentum thanks to the pandemic. What had previously been a steady growth has turned into an exponential increase in usage. What steps have e-commerce businesses been taking to maintain this momentum? What strategies are they betting on? Is this growth sustainable, and if yes, how? We bring you answers to all these questions and more. Whatever you could ever possibly want to know about the changes the e-commerce sector is experiencing is detailed down below. So read on!
1. More Choices for Consumers
With the pandemic forcing people indoors, e-commerce businesses have had to make adjustments to their strategies and allow customers greater freedom while looking for and ordering products, along with tools to help them make the right choice while shopping. Several features which had previously been niche are now being actively pushed into the forefront of online shopping. Some of the most convenient and significant of these tools include:-
1.1 Augmented Reality
As brick-and-mortar stores closed down, customers needed a way to get the feel of the product before they pressed the buy button, and this is where A.R. came to play. While not completely tangible, Augmented Reality provides a fairly accurate visual representation of the product you’re ordering, without having to go to a store in-person.
1.2 Chatbots
Not going to physical stores also means not being able to discuss or interact with store clerks to make queries about products. To bypass this, many e-commerce platforms have devised chatbots to help the customers with their shopping experience, and address whatever queries they may have. They are friendly, intuitive, and can greatly simplify the buying process for you. The use and adoption of chatbots by businesses have been on the rise, and will most likely grow even further.
1.3 Alternative Payment Options
Yet another consequence of the pandemic has been the shift to the digital payments ecosystem, and the reduction of the cash-based economy, even in a historically cash-dependent society such as India. Customers now have the option of choosing from a variety of payment methods- card, netbanking, UPI, and BNPL (more on that later). This allows customers to exercise their own method of payment which they feel convenient, thus ensuring lack of on-hand cash is never an issue while shopping.
2. Blockchain and the Metaverse
Blockchain is all set to be the next big thing in the world of e-commerce. The applications are seemingly endless- cryptocurrencies, NFTs, and perhaps most significantly, the Metaverse. It is an industry that is on the verge of a breakout, one with the potential to revolutionize the world as we see it, or so many people claim. But regardless of whether it is all hype or is actually substantial, the impact it has had is undeniable. It really is revolutionizing the way many people are shopping, if not more. This revolution is being spearheaded mainly by two key drivers:-
2.1 Non Fungible Tokens (NFTs)
Well-known brands such as Gucci and Coca-Cola have jumped onto the NFT craze, selling virtually branded goods and collectibles. Gaming platforms have long been in on it with exclusive skins and character outfits, and with the help of the blockchain, are set to delve even deeper.
2.2 Decentralisation and Web 3.0
Blockchain also paves the way for decentralization and removes monopolistic entities, thus allowing peer-to-peer platforms to emerge on a new, more equitable internet, or Web 3.0. These P2P marketplaces are becoming very popular, and more and more e-commerce ventures based on the blockchain have been popping up. It will undoubtedly be interesting to see how industry will grow in the coming years and the exciting new possibilities it will unlock.
3. Rise of Buy-Now-Pay-Later
Buy-Now-Pay-later (BNPL) is one of the latest and most widely used alternative payment methods that have sprung up recently. As evidenced by the name, it essentially allows you to buy products and pay for them at a later period. Many platforms such as Simpl and Uni make the entire process very easy and convenient.
The reason BNPL systems are winning out over traditional credit cards or EMI systems is that BNPL is usually interest-free and is easier to set up for usage. It also provides a wide variety of options ranging from monthly instalments to lumpsum payments at the end of the month. This allows a large degree of freedom and flexibility for the consumers to take advantage of.
4. Subscription-Based Services
Subscription models will grow even more as the years pass, providing their customers a quick and effortless method of recurring payments without having to worry about their services being cut. Subscription services do an excellent job of enticing and locking customers within a specific ecosystem. Almost all online businesses, even outside the e-commerce sphere, have jumped on this trend.
The most notable examples, of course, are streaming services. Netflix, Hulu, Disney+, and many more have revolutionized the way we watch TV. Similar breakthroughs are long overdue in e-commerce, and Amazon Prime is the perfect case to study how an all-in-one subscription model should look like.
5. Digitization and IoT
The Internet of Things (IoT) has been nothing less of a boon for the logistics and e-commerce industries, greatly reducing individual workload and helping to automate many previously menial, time-consuming processes. It also helps to identify patterns and devise algorithms to serve the customers better. Some of its principal functions are:-
5.1 Display products and advertisements as per customer’s browser history
With the help of web cookies and trend analyzing software, the IoT allows computers to interact with one another and list out the best and most relevant products for the user in the form of advertisements as he or she is browsing.
5.2 Conduct surveys to identify customer preferences
Digitization allows e-commerce businesses to get in touch with their customers, find out their needs and preferences, as well gather information and reviews of existing products. This leads to them using this data to better manage their production process and satisfy their customers.
5.3 Automate processes of pushing ads and promotions to internet users.
With advertising platforms like Google Ads, Amazon Ads, and LinkedIn Ads gaining ground, pushing ads onto browser windows is a staple for many websites. For some, it is the primary source of revenue. Consequently, with the help of AI, the process of showing ads for revenue generation has become faster than ever before.
5.4 Automation in Factories and Warehouses
Other than the above-mentioned use-cases, digitization also pushes the industries to be better, as evidenced by the increase in adoption of robots and drones in factories to make operations smoother and reduce downtime. In some situations, drones also take care of last-mile deliveries, even though the technology is still largely experimental.
6. Influencer and Social Media Marketing
With the pandemic having pushed our whole lives online, influencer marketing has seen a sharp boost in popularity. People turn to social media influencers for advice and place their trust in them, which is why many businesses have adopted the route of striking agreements with these influencers. They promote the products on their social pages for a fee, thus ensuring that the products of the business get a decent jump in sales.
At the same time however, it’s important to know which influencers to contact. Some of them might be too broad or might not fit in with the goals of your business. It’s advisable to find a small group of core influencers who specialise in a niche related to your products. This makes sure that the advertisements don’t come off as jarring or off-putting. For example, a health influencer might be able to market a sports drink, but might not be able to market junk food brands.
7. Cross-border Logistics
Cross-border shipping solutions have jumped significantly as compared to the previous decade. With increasing globalization and inter-connectedness, international boundaries do not seem to hold any tangible meaning outside the geopolitical sphere. Cross-border logistics helps both consumers and retailers- consumers by vastly increasing product choices, and retailers by allowing access to untapped markets. As a consequence, international shipping has become a lot easier and hassle-free.
For e-commerce businesses looking to expand their presence across the globe, a wise option would be to look into partnering with multiple shipping platforms, while doing research as to which carriers perform best in which areas.
8. Direct-to-Consumer Model
Interestingly enough, many e-commerce platforms are now opting for D2C (Direct to Consumer) services in order to bypass marketplaces and troublesome third parties. It is being embraced by small and large manufacturers alike, as it allows them to save on margins previously eaten up by the middlemen. As the consumers are now buying directly from the manufacturers, it also saves both time and costs on the extra shipping processes required for conventional models.
The D2C model is set to be the biggest change in the industry if it plays its cards right. This is evidenced by how well Amazon’s Seller Fulfilled Prime program works. It essentially allows the merchant to ship directly to the consumer, making way for small but significant perks like personalized packaging.
All in all, D2C makes businesses more data-focused and more open to experimentation as compared to traditional retail marketplaces. It creates a personal relationship between the buyer and the seller, which might not seem like much, but always creates a positive impression on the customer’s mind.
9. Increased Focus on Environment and Sustainabality
Arguably the most important effect of COVID-19 on the world has been the renewed effort and awareness on sustainable development. On the e-commerce front, it means many businesses are now choosing to ‘go green’, making use of renewable packaging, reducing their carbon footprint, and so on. Several logistics platforms have also caught on, campaigning on ‘green logistics’ and sustainable delivery practices.
This is because consumers have now become much more conscious about where they shop and the impact it has on the environment and related effects.
As a result, in order to not alienate potential revenue-generators (and also because climate change is a very real issue that affects us all), businesses should start adopting eco-friendly policies wherever possible. Big corporations like Apple and Amazon have already run many social media campaigns highlighting their environmentally friendly business practices.
Of course, focusing on efficiency and good performance for the sake of the customers is important, but it would be wise to remember there wouldn’t be many customers in the first place if we turned our planet into a wasteland.
Summing Up
As we can see, there are many new and exciting developments happening in the world of e-commerce nowadays. Which one of these will have the largest impact, no one can say for sure, but all of them are without a doubt very significant in their own right. Understanding these trends will help you stay ahead of the competition, and be ready for any curveballs that get thrown your way.
Logistics companies also need to keep an eye on these trends and stay prepared for any changes that might be needed in order to stay relevant in the ever-changing market. And above all, ensure that your customers are satisfied and happy with the strategies you’re pursuing. The above information will hopefully give you the opportunity to do just that.