How eCommerce has grown: Some statistics
The global retail landscape has changed drastically over the last few years, with eCommerce becoming an inseparable part of our daily lives. Courtesy of constant advancements in digital technology that allow users access to smartphones and tablet computers any time from virtually anywhere on earth, online shoppers can now reap the benefits associated with online transactions, including lower prices than what they would typically find locally.
The internet has quickly become one of the most popular ways to purchase goods and commodities, with 2.14 billion online shoppers buying something online in 2021, up from 2.05 billion in 2020 and 1.92 billion in 2019. This number will only continue to grow higher as more individuals find themselves with better internet access to become a part of this trend.
And, just to offer you a perspective on how many people are now connected to the internet - according to a survey by Statista, there were 4.9 billion internet users across the world in 2021, which is roughly two-thirds of the total population of the world. By April 2022, this number went up to 5 billion or 63% of the global population, led by China, India and the United States in sheer number of internet users.
Mobile devices, including smartphones and tablets have become the dominant medium in online shopping, with 72% of the global retail website traffic and 60% of global online shopping orders generated by smartphones in 2021.
Of course, growth in internet access is not the only factor that has spurred a rise in online shopping. The Covid pandemic has had a significant impact on the growing trend of online shopping, especially when people were stuck in their homes through the thick of it and were forced to make their purchases over the internet due to restrictions.
According to the 2021 Quarterly Retail eCommerce Sales report from the US Department of Commerce Retail Indicator Division, eCommerce sales in 2021 in the US alone stood at $870 billion, which was a rise of 14.2% from 2020 and 50.5% from 2019. It was also revealed that eCommerce accounted for 13.2% of all retail sales in the US in 2021.
Computer and consumer electronics occupied the top slot in the list of US retail eCommerce sales by product categories in 2021 with a sales figure of $194.94 billion and accounting for 53.2% of total retail sales.
Source: oberlo.com
In the global front, retail eCommerce sales worldwide notched up a colossal amount of USD 4938 billion in 2021 and is projected to reach close to USD 7500 billion by 2025. Here’s a chart of the trajectory that global retail eCommerce sales followed from 2014 onward, with a forecast of how much it will be every year all the way until the year 2025.
Source: statista.com
Opportunity for eCommerce companies
The incredibly single-directional behavior of consumers during the pandemic is proof enough that online shopping is the future of the retail industry. This rings true especially after it has been revealed that more than a quarter of the world’s population, or 2.14 billion people to be precise, made an online purchase in 2021.
So, even if the fear and madness that Covid brought with it ebbs, digital shopping as a convenient and profitable exercise (than as a compulsive behavior) will certainly not slow down. Being able to buy household items and grocery online, something that was improbable about two decades ago, is no more a privilege but a part of our daily schedule now, coerced by lack of time and the reluctance to stand in long queues at supermarkets.
And as the entire world toes the line towards an imminent digital future, especially when there’s so much happening around the Metaverse, eCommerce companies now have all the more reasons to harness the ever-growing potential of technology.
Business owners cannot afford to ignore the future of eCommerce. The next few years are going be an exciting time for brands, with new technologies emerging and evolving on a monthly basis that will shape how people shop forever.
Leading brands are looking to the future with anticipation, as they anticipate that changes in technology and business practices will have a significant impact on customer experience. eCommerce technology is therefore, where online retail companies should be putting their money on, and there are several trends, including some experimental ones, that are already making inroads.
Top eCommerce technology trends
With online shopping on the rise, even manufacturers have been cutting into traditional retail spaces. What does this mean for your eCommerce business?
It's time to get with the times and start exploring new technologies that can help you stay competitive while meeting customer needs. So, let me take you on a journey through some upcoming technology trends that can put you right on the top of the game.
1. Augmented reality (AR) & virtual reality (VR)
Augmented reality (AR) and virtual reality (VR) are two of the most recent developments in the retail eCommerce industry but they’re fast becoming very popular features due to how realistic online shopping can be. For online shoppers to be able to try out clothes and home improvement products virtually from a mobile device gives them the advantage of having an in-store like experience from their homes, making their purchase decision easier.
Brands like Amazon, Ikea, Kohl’s, Sephora, Nike and Wayfair are some of the leading names that are giving a whole new meaning to in-app shopping with their augmented reality powered apps.
Source: ikea.com
It wasn’t too long ago that eCommerce companies were trying out new methods like short videos on their online stores to woo their customers. And now we have something like the Ikea Place app, a revolutionary technology that allows users to virtually “place” furniture and furnishings in their home space to see how it would look like before making any purchase decision.
So, how does AR work in eCommerce and what are the benefits?
AR is a technology that lets us see our world in an entirely new way. It fuses the real world and the digital world together by feeding digital elements like images and sound into real world surroundings to provide an alternate version of reality. Pokémon Go is an interesting example of this technology.
If you're an eCommerce company, AR is a great way to give your customers more control and fidelity when previewing products before they buy. It lets them see what the final product will look like in their own environment through AR features like virtual try-on and AR quick look.
Some of the benefits that AR technology can offer to eCommerce companies include:
Improved customer engagement: With AR technology, you can turn your eCommerce store into a really interactive website that will hold your customers' attention long enough to build a relationship with them even if they don’t make a purchase on their first visit.
Reduced returns: The improved immersion offered by AR technology makes it easier for customers to see what a product will look like in their own environment. This means that they are less likely to encounter an item which isn't how they imagined, thereby reducing your eCommerce return rate.
2. AI chatbot
The potential for AI chatbots in eCommerce is unlimited, which pretty much explains why this industry was one of earliest adopters of this technology and virtual assistants. As an eCommerce business owner, you can leverage on this technology to offer product recommendations like ‘similar products’, ‘frequently bought’ and ‘best sellers’, personal shopping assistance and the usual customer support service to the shoppers.
The success of virtual assistants like Amazon Alexa is why so many businesses have jumped on board with this revolutionary technology. Chatbots may not be perfect yet, but thanks to AI and machine learning, they are becoming more intelligent, with the ability to be able to learn about shoppers' needs through past conversations with them for an in-store like experience.
Source: eventige.com
Here are the top benefits of using AI chatbots in an eCommerce website:
Personal shopping assistance: AI-powered chatbots are now a common fixture of online shopping, allowing retailers to engage with shoppers in a personal way. They help online shoppers find the right product based on parameters like price, category and preferences, all without any human assistance.
Conversational commerce: AI chatbots bring in conversational commerce to add interactivity and user friendliness for your customers. These bots can be used in any situation where shoppers might need assistance like customer support, product recommendations, purchase queries, etc. just like live chats or Facebook messages.
Lowering returns: Chatbots are great for lowering return rate.They can help shoppers find the right product they’re looking for, thereby preventing a wrong purchase that could end up in returns and unwanted return shipping costs for the eCommerce store.
3. Social commerce
Social commerce is the new way to sell your products. With platforms like Facebook Marketplace, Pinterest, Instagram Shopping and TikTok Shop providing eCommerce features for both buyers and sellers to conduct business, users can do both shopping and socializing while still on the same page.
Social commerce makes it possible for users to be able to search for products they’re looking for on these sites, communicate with buyers/sellers and then sell/purchase directly without any additional step, pesky pop-ups or redirects, while still being able to catch up with friends and family on the very same platform.
Source: olapic.com
As for how good this trend works, results of a survey conducted by Statista reveals that worldwide sales over social media platforms were around USD 560 billion in 2020. And if forecasts are to be believed, there is a strong indication of the value of social commerce sales going up to about USD 2.9 trillion by 2026.
Here are some major benefits of using social commerce if you’re still thinking whether it’s the right method for your business.
Attract customers with shifting loyalty: One of the prominent developments observed in the US retail industry during the pandemic was loyalty shift among the consumers. When faced with stock outs, 13% of the shoppers waited for items to be back in stock, 39% switched brands or products and 32% simply switched retailers.
Social commerce provides a unique opportunity for new brands to capitalize on this changing consumer behavior by making a positive impression on the shoppers.Collect consumer data: Social commerce offers eCommerce companies the perfect opportunity to conduct consumer research, collect data on consumer behavior and demographic data to build marketing strategies aimed at conversion using those results.
Listening to your audience is the best way of finding out what they want. With that knowledge you can devise better conversion activities and optimize your CTAs.Opportunity for higher conversion: The number of social media users just keeps growing at a rapid pace. Around 4.26 billion people across the globe used social media in 2021, up from 3.9 billion in 2020 and is projected to grow to 5.85 billion in 2027, with Facebook leading the pack with 2.89 billion monthly active users as of January 2022.
The best way for your company to stay ahead in a competitive market is by staying connected with customers. To do so, you need an active social media presence that offers opportunities for engagement on all platforms.
Source: oberlo.com
4. QR codes
Quick Response codes or QR codes, as they are more commonly known, are a type of matrix barcode invented in 1994 by Japanese automatic identification and data capture (AIDC) device manufacturer Denso Wave. These optical labels are 2D barcodes with dot matrix that make them readable on devices like barcode scanners and mobile phone cameras or QR reader / scanner apps.
QR codes were first introduced to track vehicles and automotive parts during manufacturing process, but have in time spread into the consumer sphere where they're used to check information on products, mostly in the supply chain.
With a capacity to store great deal of data (up to 4000 characters to be precise), including URLs and phone numbers, QR codes are used for multiple roles, such as linking to app download pages on Apple App Store or Google Play, authenticating online accounts and making payments.
As QR codes continue to be a popular way for businesses and consumers alike, the technology has come up with some innovations. One such innovation is its ability to increase eCommerce security by ensuring that payments are made directly from customer devices instead of third party funds transfers as was previously required.
Payments can be made without having your credit cards on you, which is great if security has been a concern. The information will stay within the merchant's system and not travel through their store network, removing security threats that result from data breach like credit card numbers, names and addresses getting stolen.
Shopify’s Shopcodes, for example, are QR codes that can be generated through the Shopcodes app to be used by Shopify store owners to direct consumers directly to a product on their store, making shopping a faster and safer practice. Each shopcode is unique to a product and allows store owners to track traffic and sales through the Shopify Analytics dashboard.
Other than security and speed, QR codes can also be used by eCommerce companies to offer promotions and coupon codes to shoppers, trigger more traffic to their online store, increase app downloads and make inventory management an easier task.
Source: shopify.com
5. Product matching
Machine learning and AI have revolutionized the way shoppers search for products and find what's best suited to their needs. As an online seller, you can use this algorithm as an efficient way of increasing your ranking with Google by matching up existing items in-store against those on sale online on competitor sites to increase traffic of potential customers.
The eCommerce market is booming, as a result of which retailers are looking for innovative ways to make the buying process even easier. One way they've found success in doing so? Integrating AI-powered customer data analysis into their eCommerce operations, which includes product matching!
This process helps online retailers offer personalized experiences while also maximizing revenue by pairing products that shoppers might like another product because it sells better than the one they were checking (or doesn't exist).
As technologies evolve at breakneck speeds it’s essential that businesses stay ahead by employing cutting edge strategies such as product matching algorithms because what works well now may not work tomorrow.
For example: if an online shopper is looking at an item online, and the same product is available at a discounted price somewhere else, then within seconds of searching they'll get ads about similar products nearby instead.
Source: amazon.com
Some of the use cases of product matching in eCommerce include:
Image similarity: One of the models of product matching is image similarity, which is used by online retailers to locate and identify copyright violations, using the title of the image to look for similar images.
By looking for similarities in image, you can more easily detect when a company has been infringing on your patents. Designs with similar features will be easier to spot than those that differ only slightly or significantly from the original design, even though the violators may change all other information to look different.Price comparison: Identifying similar products can be tricky. One way to do so is by analyzing the price of each product as a comparative model to separate them when they are within a range that could point out differences between them.
Attribute extraction: This product matching algorithm takes into account several attributes to determine if two products belong to the same category. These attributes include size, color, brand, model number, condition and product description.
The model uses both consistencies and inconsistencies to determine if the products belong to the same category or a different category.
6. Voice search
The introduction of and consecutive developments in the virtual assistant (AI assistant) technology have opened up a wide range of benefits, one of them being the ability to conduct voice search for products sold on eCommerce stores.
Amazon’s Alexa (the most popular as of now), Apple’s Siri and Windows' Cortana are three of the leading names in the virtual assistant sphere today. Alexa became so successful that Amazon even designed and released Alexa devices to cater to the growing demands of the users.
If you would like to give your customers the option of searching for your products without entering their search queries manually using a keyboard or keypad, then voice search is the perfect solution. Voice assistants like Alexa and Siri can function exactly the same on your eCommerce store as they would on a device.
The beauty of voice search is that it saves time and effort for both customers as well as retailers. The number one priority for businesses is to make sure their eCommerce stores are compatible with voice search.
This way, when people ask additional questions while using the device in an automated fashion (and there's no doubt that they will), you'll have all of your bases covered. Here’s a helpful guide on how to use Alexa to boost your online business.
Source: trootech.com
How to know which technology to adopt
Just because these eCommerce technologies are trending doesn’t mean you should jump your guns and start applying every single one of them for your online business. Chances are, not many of them would make sense for your store, leading to wasted time, efforts and money.
So, how do you know which technology best fits your business model? By following these simple steps:
Stay updated with trends in your industry
There’s no better and simpler method than staying aware and alert on the latest trends in your specific business category. Keep checking for news and reports, including statistics on users and success rate of the technologies to decide if you should really apply it.
Use customer research tools
Nothing works better than analytics and tools to know what your customers are looking for. Customer behavior was and still is the single-most important parameter to connect to your target audience and know what they want.
Competitor analysis
Keep a keen eye on your closest rivals and find out whether the latest technology worked for them so you can make a more informed decision whether you should apply it yourself.
Conclusion
eCommerce has never seen a more exciting phase, with new technologies evolving rapidly around the block. With so many opportunities waiting in the wings for those who are willing to learn and grow together, there is no better time than now to capitalize on it and give growth to your online business.
We are a UI/UX design and web design agency that is all for learning and making the most of technologies that are robust, scalable and cost-efficient, which pretty much reflects in our eCommerce services that are devised in those very lines.
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