Future of E-Commerce: Innovations to Watch Out For
Our activity of buying and selling goods online became a usual part of daily life. However, what does the future of the e-commerce industry hold? Ever since the development of the Internet, the role of technology in the online retail industry has been immense. This article highlights e-commerce trends in 2018 and the most notable technological innovations modifying the future of the online shopping experience:
- Chatbots - new virtual support service
- Voice Assistants - modified word of mouth
- Augmented & Virtual Reality - innovative shopping experience
- Blockchain Technology - new data security & payment method
- Drones & Droids - next-level delivery system
What is E-commerce Nowadays?
To define: E-commerce is a transactional process where parties exchange (buy & sell) goods and services or send information with the help of an electronic network, the Internet. It is responsible for the sales aspect of e-business. As well, according to the commercial profile, there are 6 types of electronic commerce. Logically, this covers Business-to-Consumer (B2C) operations, but it is also involved in:
At a high level, electronic commerce is based on technologies engaged in mobile commerce, online transaction processing, electronic data interchange (EDI), inventory and supply management systems, automated data collection systems, and digital marketing. It can also be accompanied by wider technologies for mobile devices, social media, and email tools.
Amazon and eBay were the first marketplaces to use the benefits of e-commerce to buy and sell mass market goods online.
Imagine - this year Amazon turns 25 years old! During this period, consumer interest and participation in online shopping has risen significantly. It is no wonder that over a quarter of the world’s population (2.14 billion) will become digital buyers by 2021.
Currently, e-commerce vs brick and mortar statistics state the dominance of the latter. On the other hand, the e-commerce industry continues to grow on an annual basis, with 11.9% of total sales in 2018.
Thus, it is just a matter of time until most of our purchases are made online.
What are the Current Trends and Technologies Having an Impact on E-commerce?
Nowadays, customers hold the power in the market, as they have a vast number of offers to pick from.
Thus, it is not solely your product that allows you to stand out from competitors; it is a customer-centric shopping experience built around your brand to keep customers. Everything from an intuitive order process and payment possibilities to fast delivery has an impact. This augmented service is intangible and requires a lot of effort. It is here that new e-commerce technologies and applications offer solutions.
Today, all well-known brands are represented online by an e-commerce store, shopping apps, marketplaces or even all of these things simultaneously. Every effort is made to acquire more clients online. Here are the trends currently shaping the e-commerce industry.
Personalized Product Recommendations
Recognizing your visitors and making personalized product recommendations will create a unique shopping experience and make an impression with your potential customers. Let's take Segmentify as an example. It is an intelligent product recommendation engine that promises its customers at least 10% revenue increase. Through various implementations of different campaigns you can increase conversion rates, revenue, repeat customers and purchases, reduce bounce rates and abandoned carts.
When making product recommendations, it is important that you continue to analyze your performance and adapt based on the behavior of your customers.
Social-commerce, a Subset of E-commerce
Naturally, social commerce is the use of social networks for online shopping transactions.
Social media is embedded in our daily activities. This fact effectively changes the buyer-seller landscape. Brands stay in touch with their clients via popular social networks to create a personal relationship. More advanced technical features are integrated into social media that are directed to shorten the buying cycle. In the future, the one-click “Buy” button will likely be adopted by most social networks.
The combination of e-retail and social media has resulted in evolving P2P marketplaces. Facebook and Instagram are the greatest examples.
At last, the fact: the social e-commerce growth rate is on track to increase by 25% over the next 5 years, to make up more than a quarter of the total e-commerce market.
Using applications on smartphones and tablets to buy and sell products is known as mobile-commerce or, more simply, m-commerce. Today, the percentage of consumers using mobile devices constitutes a half of all internet traffic, meaning it is of high importance that e-commerce shops adapt to mobile screens and, in some cases, even build a separate app for the specific purpose of reaching these buyers and following mobile e-commerce trends.
Solely the presence of a website or mobile app does not guarantee tremendous success. It is important to make sure that you create the best online shopping experience. Client engagement and retention are key indicators to focus on.
Valuable information on this topic can be also found here: How to Engage and Retain App Users.
Mobile shoppers are particular, so even the slightest issue can change their mind and lead them to buy from a competitor. Meanwhile, the more advanced functionality embedded into mobile apps sets up some new game rules. The invention of the devices such as Beacons and Dash Buttons actually showed the value of having a branded e-commerce mobile app. These gadgets trigger interest and engagement on the mobile app, which in the end increases sales.
This technique offers a completely new e-commerce experience formed from an analysis of former purchases and buyer behavior. Research shows that mobile users expect to have as easy of an e-commerce shopping cart process as possible.
This advancement in the mobile cart, along with a growing interest in digital coupons, will be responsible for almost half of sales in e-retail.
E-wallets and New Payment Integrations
Electronic wallets simplify the payment process. Online services like Apple Pay, PayPal, Stripe, and Google Wallet allow for easy electronic transactions. Moreover, digital wallets can be synchronized with your bank account. This data, along with your driver ID, health card, etc, can be stored in the phone.
As well, with the universal acceptance of NFC (near field communication) technology, we wirelessly connect to terminals for in-store payments using our smartphones.
Beacons drive retail sales while, at the same time, providing a personalized mobile shopping experience.
According to a presentation by Apple in 2013, beacons are heavily used by top retail stores. Urban Outfitters, Macy's, Target, and CVS all use them to build personalized content strategies. The device transmits Bluetooth signals to nearby smartphones that have the correct branded app.
This increases the chances to use the app more often and actually complete the purchase. Sephora utilizes beacons to gather consumer information and send personalized promotions.
This appliance from Amazon offers easy order-placement of the most regularly purchased goods. These button devices are tagged to a place where these goods are often used. Then, using the Amazon app, a user can preliminarily set up the orders. This new technology trend in e-commerce will likely soon be imitated by other top players like Costco and Walmart.
Omni-Channel is the New Normal
According to Google, around 85% percent of users begin their shopping journey on one device and continue on another. It can start with an Instagram advert and end up at a leather jacket store down the street. This message from consumers has set the trend of aligning online and offline sales channels.
This approach is called omni-channel, meaning all the means of interaction with a customer should provide the feeling of one entity. Each detail of a particular company, its brand, marketing content, and ads should communicate the same concept.
In order to stay competitive, enterprises will need to employ an omni-channel strategy. This complex system implies a high-load backend to maintain and merge data from all the sales and social channels.
What is the Future of E-commerce?
These are the trendsetting processes at the present time. However, merchants should understand that as technology progresses, there will continue to be transformations in how we interact with and buy goods.
The tech adoption curve helps to evaluate the risks of employing new technologies used in e-commerce. It illustrates the most prominent e-commerce innovations influencing the industry and their level of acceptance by the public.
Naturally, it takes some time before being adopted by the majority in the e-commerce system, but keeping an eye on the technological advancements is more than necessary.
Chatbots - New Virtual Support Service
A chatbot (known as a conversational agent), is software technology that imitates real human interaction in a written or spoken way. It can be represented as a website bot, chatbot app, social media chatbot, as well as a voice assistant.
The value of using this technology is that it saves time and expenses by automating customer support in an e-commerce space 24/7. Another plus is that it generates leads and, thus, revenue by gathering preliminary information about a client. As well, chatbots can redirect a prospective customer to the information they are most interested in.
A great customer service chatbot example is Hipmunk. This travel search engine uses the technology for travel-related questions and recommendations on their website. Also, the office supply retailer Staples uses a chatbot to offer products based on order history. It even helps to complete a purchase directly through a chat.
As the technology is relatively new, users will likely suspect that they are communicating with a robot; particularly when live-chatting. Chatbot technology is dependent upon a progression in NLP (natural language processing), and without considerable improvement in this field, it will remain a limited algorithm and continue to struggle with more complex speech (jokes, metaphors, dialects).
On the other hand, with every passing year, e-commerce chatbots become more advanced and communicate more naturally. Who knows, they may become humanized to the extent we cannot distinguish them from real human beings.
Voice Assistants - Modified Word of Mouth
Voice search is widely used in services like Apple's Siri, Google Now, and Cortana from Microsoft, which also embed NLP technology. With regard to virtual e-commerce, like Amazon’s Alexa, voice assistants have seen a great increase in popularity. The technology can be used to order goods directly from Amazon by voice command. As well, it quickly finds deals and can even order food deliveries from local restaurants.
A greater number of people, especially millennials, have begun to use voice assistance before they shop. With the general adoption of smart speakers for the home, like Amazon Echo and Google Home, it is most probable that customers’ first connection with a product would be through a sort of “word of mouth.” What would you ask a voice assistant?
These assistants can recommend the most commonly requested items. This means that the top player will likely make all the sales. Therefore, in a similar way, we optimize our website searches using Google algorithms - the same approach is used in voice search logic.
Augmented & Virtual Reality - Innovative Shopping Experience
Both AR and VR apply similar technology, but many confuse the two. Virtual reality builds an entirely new artificial reality while augmented adds only some virtual elements into the real world.
You may think that these things are great now, but the idea of using VR and AR in e-commerce could change the future of online shopping concept. Just imagine if you could virtually interact and touch items before purchasing them. For example, you could virtually try on a dress, feel the fabric, and see how it suits you. Banana Flame, a British clothing e-store, has already incorporated AR, as it allows shoppers to use their web cameras as interactive mirrors.
It is not only fashion industry that benefits from AR; it is utilized by the beauty, furnishing, and auto industries as it allows users to visualize mobile purchases. Companies like Ikea and Audi have utilized augmented reality glasses so that users can design their own kitchens and check out cars.
Huge investments have been made in AR by Google, Apple, Facebook. As well, companies like Alibaba, Microsoft, and HTC are working on their AR technology in-house. TechCrunch indicates that the value of the VR & AR market accounts for $108 billion. AR is becoming dominant and is being driven by its increased usage on mobile devices.
Blockchain Technology - New Data Security & Payment Method
E-commerce is one of the industries being changed by the revolutionary use of blockchain technology.
With future of e-commerce growth, some side effects are bound to occur. There are issues with trust, slow transactions, higher fees and policies, and digital data ownership. With its concept of a distributed, genuine ledger of all digital transactions, blockchain helps to build trust in online payments. It also excludes frauds and provides a new payment method with the help of cryptocurrency (Bitcoin, Ethereum, Ripple, etc).
As a real-life example, Amazon has policies for its listed retailers. They reduce contact with their customers, as they can just send one follow-up email. Amazon employs its own customer support that is not acquainted with the merchants` products. As a consequence, this reduces the credibility of the retailers and results in a higher cost to the customer.
At present, experts are working on the future of e-commerce marketplace. It is called ECoinmerce and will be blockchain-driven to solve the aforementioned issues.
The notion of transactions using digital assets eliminates the need for a third-party. Additionally, these transactions are faster and fees are decreased both for buyers and sellers. All data entered into a blockchain is stored there indefinitely. This means that no matter how many times a good is sold or repurchased, the transaction history always remains. This can go a long way toward eliminating fraud and boosting transparency.
Interested to learn about the appliance of blockchain technology?
Our team is gaining expertise in applying blockchain solutions, so we would be glad to consult you.
Drones & Droids - Next-level Delivery System
The tendency for robots to replace human activity has been observed over the last century. In the past, automated machines started working on car assembly lines and food production. As artificial intelligence and machine learning evolves, it limits people into the process, e.g in a delivery system. Currently, automated vehicles require human operation. However, it is more than possible that drones and droids will eliminate even this participation.
The future of automation lies in drones embracing the sky and droids on the ground. Despite many obstacles in drone delivery, the benefits of its adoption are great for retailers. This will considerably cut costs in logistics operations. Amazon is in the first line with its testing of a new, fast drone delivery system - Amazon Prime. As well, a famous example in the food industry, Domino's delivered a pizza with the help of a drone in 2016 in New Zealand. Once drone airports become a reality, shipping time will be shortened to even a few hours. This is sure to boost online purchases.
The future of the e-commerce delivery system is expected to be focused not on a specific address, but on an individual person and their expected location and time. Pinpoint shipping, as this is referred to, would embed sophisticated AI.
Each new year will definitely bring more technological innovations to the online shopping industry. To stay visible, brands should discover new tech solutions that acquire loyal clients and provide a unique e-shopping experience. Currently, it is a must-have to be active on social media and to operate in the m-commerce sector. Meanwhile, the IoT is gaining popularity and is represented by smart devices like dash-buttons and beacons.
Even still, there's more to expect in the future of e-commerce sector. The successful cases of virtual reality, drones for delivery, voice assistants, and crypto-payments in the e-business spheres show that our journey of purchasing goods could exceed our imagination.
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