Attempting to predict the future is often a fool’s errand. Winston Churchill once said, “I always avoid prophesying beforehand, because it is much better to prophesy after the event has already taken place.”
But, by collecting data and finding trends and patterns, we can make some pretty educated projections for the future of ecommerce. Let’s start by looking at a couple shifts in consumer behavior that will drive the next years of the ecommerce industry.
Millennials, the generation born between 1980–1994, are on track to account for over $1 trillion spent annually in the United States. However, 36% of them are saddled with high amounts of student debt. This is credited for sparking the trend of “access over ownership” and is also a driver in many recent payment innovations.
Right behind Millennials comes Gen Z. The oldest of them is currently only 24, but early analyses are already in. This youth culture report from Dazed Media notes that with Gen Z, “hyper-individualism and mass trends sit side-by-side within the very same person. We are fragmented and united all at the same time.”
This indicates a shift from previous generations, particularly Gen X, for whom individualism and the mainstream sat in direct opposition to one another.
Another shift in consumer behavior — this time, one that will impact every generation currently alive — is sure to effect the ecommerce world as a result of COVID-19.
As the report from Dazed Media went on to say, “Our homes have become our offices and entertainment spaces, and human interaction and touch is diminishing. It’s a time of extreme tensions — from fragmented to united, digital to physical, reality to fantasy, individuality to homogeneity.”
The trends identified here all point to three main objectives:
In other words, the future of ecommerce will be driven by increasing convenience for both merchants and their shoppers, providing rich, compelling shopping experiences, and enabling experiences across channels in a consistent, customer-friendly way.
The ecommerce share of retail sales globally has been on the rise for at least the past five years and is expected to continue.
Net consumer optimism has decreased in several countries, according to McKinsey data, as a result of COVID-19. However, the pandemic has also necessitated greater adoption of ecommerce, especially for essential items.
This opens up a big opportunity in expanding sales cross-border to countries in which the growth rate for ecommerce penetration previously lagged.
That said, brands will have to do their own research into whether or not an international expansion is right for their online business. Some things to consider:
Consider all the costs of marketing, selling, and shipping internationally so you can assess whether it will be worth it for your brand. Also important to note: in selling to mobile-first regions like APAC, Africa, and the Middle East, delivering an easy-to-use mobile shopping experience will be critical.
BigCommerce customer LARQ made international a priority early.
“We did a Kickstarter early on and predicted that the international market, specifically in Europe and Asia, was going to be massively important for us,” said Justin Wang, LARQ co-founder and CEO.
Their ecommerce site has multi-region capabilities, and the launch of multi-currency in 2019 drove an 80% increase in conversions in three months.
“We’re also looking into setting up a new warehouse, expanding internationally on the operations side, and continuing to focus on our ecommerce strategy,” Wang said.
The goal of automation is to accomplish a task with as little human intervention as possible. That can mean anything from scheduling emails in a CRM or marketing tool, using Zapier to automate tasks, or leveraging advanced technology to help with hiring.
In the context of future ecommerce trends, however, some of the most commonly talked about today are robotics and machine learning.
One good indicator of coming trends is funding — and this one is a winner. In just the last several months, an open source conversational AI platform for chatbots and voice apps received its fourth round of funding, and an autonomous forklift developer has raised $15 million.
Robotic devices, drones, and other autonomous vehicles are already being used to augment the supply chain — for instance, to find, identify, and transport items in warehouses. Plus, the U.S. is closer than ever to seeing fully autonomous freight vehicles on the road.
The combination of machine learning/artificial intelligence and big data can do more than just automate — it can automatically optimise a number of processes that currently either take tremendous amounts of time and effort, or can’t be done at all.
One area it’s set to drive is increased ecommerce personalization that can help give customers a better store experience.
“Websites that recommend items you might like based on previous purchases are using machine learning to analyze your buying history,” said Jeff Goffinet of Dunn Solutions Group.
“Retailers rely on machine learning to capture data, analyze it, and use it to personalize a shopping experience, implement a marketing campaign, price optimization, merchandise supply planning, and for customer insights.”
This data capture and analysis can also help to identify potentially fraudulent or otherwise high-risk orders from your ecommerce store through touchpoints tailored to them.
Over time, says Goffinet, machine learning will require less and less involvement from data scientists for everyday types of applications in ecommerce. If you’re interested in incorporating some of the benefits of machine learning, start by thinking about your biggest pain points. For example: if you’re getting bogged down in customer support, try implementing a chatbot.
This chart above shows the share of consumers who have engaged via chatbots, by industry — and retail already has significant adoption.
Don’t be afraid to start small and let it grow with your business. Just remember: the point of automation is to make less work for humans — not more. Otherwise, it’s just a shiny object.
A January 2019 survey found that about 45% of Millennials had used voice technology like the Google Home or Amazon’s Alexa to conduct some kind of shopping activity. As users become increasingly comfortable with using voice-assisted technologies like smart speakers, this will likely increase — to a point.
It’s still a bit of a leap to think that we might be ordering new apparel or home decor without ever seeing it, but easier to imagine a use case for reordering, for example: “Alexa, put dog food in my shopping cart.”
In this case, Amazon remembers your brand and quantity preferences, making reordering a breeze.
The ultimate future for this, though, builds on the voice commerce trend along with the rise in subscriptions to reach automated commerce (acommerce) and headless commerce-powered IoT devices.
“Headless commerce is reaching a point where it’s defining itself in the market,” said Amir Hessabi, an enterprise solutions engineer at BigCommerce. “We’re thinking about headless as a commerce engine that can be paired with anything — like IoT devices.”
With acommerce, an IoT-connected device will sense when you’re running low on an item you subscribe to and will automatically order it for you.
Talk about inventory management — for your fridge.
Brands with products that fit in well with that model — consumer packaged goods, for example — are the ones who should spend the most time thinking about this one.
Think about the way people search. When a search phrase is typed, it typically focuses on keywords — e.g., “red jacket.” Voice search, however, is more likely to happen in the form of a question: “Where can I find a red jacket?”
SEOs should watch this trend closely to assess how it might change best practices or impact page ranks.
Progressive Web Apps (PWAs) use the latest in web technology to deliver an online experience that’s closer to a native app than a traditional web page — especially on a mobile device.
They’re gaining popularity because they facilitate a reliable user experience, lightning-fast speeds, and engagement capabilities like sending push notifications and appearing on a device’s home screen just like an app.
Shopping on mobile devices isn’t just a novelty anymore — it’s happening a lot. Sales via smartphone are expected to rise significantly, to reach over $432 billion in sales in 2022.
Add the prevalence of mobile-first shoppers in international locations like the Asia Pacific region, Africa, and the Middle East, and you’ve got a lot of potential shoppers on their mobiles.
Using a PWA alongside a headless commerce architecture can provide the control needed to enable a fast, reliable mobile shopping experience. Decoupling the commerce engine from the store’s frontend gives marketers and developers separate places to play, reducing the possibility of changes leading to unexpected consequences and providing customers a native mobile app experience.
CBD brand Canvas 1839 launched their store several months ago using a PWA and headless commerce. The advantages include more efficient development and updates for both developers and marketers on the team.
“For managing content, we’re using a really flexible approach that…lets the marketing and content teams build rich informational pages that are fully integrated with the rest of the site,” said Corey Ward, a senior web developer who worked with Canvas 1839.
He continued, “Shopping experiences are not one-size-fits-all. By using a headless approach, we make decisions with the context for what kind of experience we’re trying to create.”
As COVID-19 pushes us further toward a digital-first world, brands will have to work harder to provide the rich, compelling shopping experiences that hold their customers’ attention in the crowded ecommerce market.
Now that the technologies to create differentiated experiences are becoming more accessible, brands are looking to innovate. So how can you give your customers the best possible experience?
Video a way to immerse shoppers in the ecommerce experience as well as the brand. Compelling video creates an opportunity to spark feeling and engagement, and gives your shoppers something to interact with.
Don’t stop at the boundary of your digital storefront. The brand experience has to tell a consistent narrative across channels, devices, and contexts — including your online store.
Contrast agency founder Elliott Davidson sees a lot of untapped potential in figuring out how to solve the “in-person, white-glove service that customers have come to expect in retail.” So, how can ecommerce websites leverage the benefits of bespoke customer service?
“A great example of a retail company going further is one of our clients offer FaceTime calls to enable customers to ask as many questions about the product as they want. With high ticket sales they do a custom service and really analyse what the customer’s needs/requirements are,” said Davison.
For brands considering improvements to their customer experience, start looking into how headless commerce could help you best bring your vision into the light.
COVID-19 hasn’t just kept us away from any offline experience that can’t be done in solitude — it’s also accelerating changes that were already on the horizon.
Prior to the pandemic, Texas grocer H-E-B had already implemented an online-ordering and curbside-pickup option, putting them ahead of the game when suddenly consumers needed low-touch service.
“There’s a shift in the balance of power toward digital,” eMarketer principal analyst Andrew Lipsman was quoted as saying. “The problem has been that this paradigm shift is so profound that it does disrupt the status quo and creates new winners and losers.”
Already-existing blends of on- and offline experiences like buy-online, pick-up-in-store (BOPIS) and buy-online, return-in-store (BORIS) have proven to be good for business. Salesforce found that retailers offering BOPIS at their brick-and-mortar stores grew digital revenue by 27% in Q1 2020, as opposed to only 13% growth in those businesses that did not.
For stores that haven’t already implemented these fulfillment options, necessity will likely take the lead — at least at first. With some time ahead before a vaccine becomes available, many will opt for curbside pickup or BOPIS to reduce contact.
But while we’re all at home, touchless tech capabilities continue to advance. Mobile pay options are already common, and, in what was either really good or really lucky timing, Amazon announced in early March it would start selling its automated checkout “Just Walk Out” technology to retailers.
Furniture brand Burrow operates a showroom in Soho as a place to showcase their offerings. Two other online retailers joined them: an online paint retailer and an online plant seller.
In this way, shopping for furniture, paint, or plants becomes an experience. Visitors to the showroom can order directly from Burrow or the other two featured retailers.
“Being able to create physical locations where people can try out the product before buying is important, but we can also use our space to host events and partner with other brands,” Burrow co-founder and CEO Stephen Kuhl was quoted as saying.
Apple Pay, Venmo, PayPal… Every time you turn around, it seems like there’s a new payment option. And as younger generations become more and more tech savvy, a wider variety of payment options are becoming common. A TransUnion study even showed that Millennials’ use of credit cards is declining.
That’s why many ecommerce stores are now offering options for low- to no-interest financing, like Klarna, Afterpay, and Affirm, allowing shoppers to make large purchases without shelling out all the money at once — or using a high-interest credit card.
To open up more of their available market, particularly the under-40 demographic, brands will need to accept as many payment options as possible, including these buy-now, pay-later (BNPL) options.
Unfortunately, these BNPLs deny financing to shoppers with low credit scores. That’s where Katapult comes in. Let’s say a retailer offers Klarna as a payment option, but the shopper gets denied based on credit score. If that retailer also offers Katapult, that shopper will be automatically given the option to finance through Katapult at a higher interest rate based on risk.
“People used to be divided into prime and subprime, regarding their credit scores,” says Director of Business Development at Katapult Jeremiah Griffin. “Now there are more tiers of financing.” With emerging lease-to-own payment solutions like Katapult, businesses can reach new parts of the market.
It also means merchants can offer a personalized experience. With so many new payment options, merchants can reach new markets and offer more choices to pay as they please.
One recent trend over the past couple of years is that of big CPG brands moving online, adding a DTC channel to their revenue stream. But, according to Evan Perkins, senior account manager for large enterprises at BigCommerce, the biggest driver of that trend isn’t the added revenue stream — it’s the data.
Some traditional CPG brands selling through major retailers began to feel too far removed from their products’ users. Selling DTC is one way they’re getting to know their customers, collecting data to guide smarter decisions around targeting, retention, and more.
In the coming years, data will only grow in importance to businesses hoping to grow ecommerce sales.
Elliott Davidson, founder of UK digital agency Contrast, said, “In the future we will see more ecommerce businesses leverage data from an in-house perspective.
“In-house marketers are able to make a lot more strategic business decisions and really delve into the data to see what’s working and what isn’t. Data analysis is going to become a staple requirement for businesses to make any future ecommerce decisions.”
Union of Elements founder Hannah Sowers, who brings with her 11 years of experience working at Amazon, says that by marrying lifecycle marketing with data science, marketers will be better able to get their messages in front of people most likely to take action.
“Instead of thinking of customer segmentation in a traditional way, we’ll be able to look at customers down-funnel, identify the ones with the highest lifetime value, and optimise marketing with them in mind,” said Sowers.
“Then, we can use that same data to discover other customers who look like them, ideally predicting with greater certainty which customers will eventually be in that high-LTV category.”
Digital Commerce Consultant Pete Robertshaw of Space48 said, “In the last three to four months, we’ve seen just how vulnerable B2B business can be. Even the ones that were already online don’t quite have the optimised digital journey they need yet.”
Robertshaw recommends that B2B think more deeply about their online presence and learn to better understand their buyers.
“Some of the B2Bs we see think they know what their users want, but when it comes to optimizing their digital journey, they really don’t. UX and CX aren’t just important for B2C; they’re important for B2B too. Buyers want their shopping experiences to be seamless.”
As more and more B2B brands move online, we’ll start to see more innovation in related areas like content marketing and development, communications with customers, and the ways they tell their brand narrative online.
Direct Payment Group founder Aviv Baron predicts that B2B will even begin to offer more payment options to create efficiencies for both buyer and seller.
“We’re building a universal invoicing system, which will give sellers the ability to offer options like pay by credit card, e-check, ACH,” said Baron.
With that system, businesses will get more visibility into their payments received.
“We’re already seeing some B2Bs offering options to pay in installments, and I think that will increase over time.”
“Previously, all B2B orders were placed through emails or phone calls and logged in spreadsheets,” said Rajiv Shanmungananthan, customer-facing applications lead at ResMed Asia.
“Overall, at the end of the month, we experienced complete chaos that ... attributed to approximately 54 work hours per week.”
Ecommerce for their B2B business is, as Shanmungananthan said, “eradicating chaos from the end of the month,” as well as providing support for order management.
Ecommerce quickly proved its value despite fears that lack of social presence and interaction would discourage shoppers from choosing online over brick-and-mortar. Thanks in part to social media, we can, in fact, have both (sort of).
The importance of being present on social media platforms is already a firmly established part of every brand’ marketing strategy; however, today’s advancements have added a commerce component to facilitate shopping on-platform.
As Millennials and Gen Z continue to increase their purchasing power, social commerce will grow in importance. 47% of respondents in those age groups have some trust for social media influencers.
Facebook and Instagram have both made strides toward enabling the purchase process without leaving the platform. Checkout on Instagram was introduced last year in beta, and Facebook Shops recently launched to make selling on the platform even easier.
Pinterest, too, is jumping on the bandwagon. They announced last year a visual search feature that recommends fashion and home decor products based on an image’s context. The Rich Pins — including Product Pins — make it easier for platform users to see things like pricing and availability. And Buyable Pins enable customers to buy products without ever leaving Pinterest.
Advancements from the platform are sure to continue, evidenced by the hire of a former CTO for Walmart and VP of engineering at eBay.
If you’ve had an ecommerce store for any length of time, you’ve likely experienced the feeling of needing to do a hundred things and only having time for ten. That’s why, when it comes to future trends, you have to prioritize relentlessly.
Not every brand needs to capitalize on every trend. If you’re a B2B business selling heavy equipment, Checkout on Instagram won’t increase your revenue. Similarly, if you sell bespoke gift items for highly targeted occasions, voice search won’t be your first priority.
Focus on usability before flash. That’s both from the customer’s perspective as they shop, and from yours on the operations side. No flashy onsite experience or other bells and whistles will replace a foundation of solid processes and best practices. Once you have that down, take measured risks and test, test, test.
Consider demand, translation and localisation, payment options, and cross-border shipping. You’ll have to assess all the related costs to determine if expansion is worth it for your brand.
Use automation to schedule emails, automate tasks, assist with hiring, communicate with prospects, and streamline warehouse processes.
Voice commerce refers to using voice technology, like Google Home or Amazon’s Alexa, to conduct some kind of shopping activity.
Automated commerce refers to functionality that manages subscriptions and automatic ordering.
A Progressive Web App, or PWA, uses up-to-date web technology to deliver an online experience that’s closer to a native app than a traditional webpage — a fast, reliable user experience.
PWAs offer more flexibility to manage content on the frontend and deliver fast, seamless shopping experiences.
Today, customers expect to be able to buy online, pick-up in store (BOPIS), buy online, return in store (BORIS), and collect their products curbside.
B2B sales are undergoing digital transformation. To keep up with changing buyer expectations, ecommerce can be key to engaging prospects and customers.
Choosing the payment gateways most popular with your target audience will help Increase conversion by making the experience more convenient for them.
If your products are very visual, and if the size of those products matters (e.g., how will that rug fit into your room?), you should consider 3D and AR technology.
Headless commerce is an ecommerce technology architecture that decouples the front- and back-ends to enable more front-end control while limiting unintended consequences to the back-end.