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Five Trends That Will Shape Ecommerce Today – And Tomorrow

Changing Behaviour

AI, ML, AR and a whole slew of other trendy abbreviations have dominated the tech discussions for quite some time, but are these still relevant? Especially, are they relevant to ecommerce, and what else is hot in the ecommerce space right now? Read on to find out more about five trends in ecommerce that matter right now as well as tomorrow.

The ecommerce space is growing and evolving at a rapid, some would say light-speed pace. This is exactly why it makes lots of sense to stop, look and listen to a few of the bigger trends in our horizon when it comes to big moves in ecommerce and online shopping. So strap in your millenniumfalconesque seatbelt, grab some space-station-safe-vacuum-packed popcorn and take a ride with us through five exciting trends that will shape ecommerce as we know it.

1. Personalization is why we need data, ML and AI

With growing online shops comes growing product variety – and with that comes customers who feel a bit overwhelmed. This is why personalization is such an important trend in ecommerce; online shoppers want to find not just what they are looking for, but they want to find the products they didn’t even know they wanted to buy.

This is where data about our customers comes in. The most efficient way to match customer needs and interests to our ecommerce product selections is Machine Learning (ML) and the smart use of Artificial Intelligence (AI) to have bots do the work of the brick-and-mortar store clerks in the online space. This approach is already delivering results, at least according to Boston Consulting Group’s study that found a high correlation between the level of ecommerce personalization and customer behavior and experience: the value of average order rose 40% while Net Promoter Scores rose 20% with higher levels or personalization.

In the end ML and AI are just tools for learning from data and then putting the found patterns –  or models to be correct – into good use. As Posti’s Vice President of Digital Commerce Pasi Ilola put it, “The ecommerce players that can offer the best customer experience are the ones who will win. They are able to hide the complexity of their organizations and logistics chains from the view of their customers, and just concentrate on offering a simple and easy to use service.” No doubt, personalization is the key to offering each individual customer the simplicity and ease that the top-tier online shops are striving for.

2. Retail sales plateau – online shopping keeps growing

Ecommerce is on a continued rise even though there seem to be signs of the global retail market’s ever-slowing growth. What is really interesting is that even though global retail is estimated to keep up a 4.5% growth rate, online retail will grow at a clip of 15-20% annually until 2023. The end result is, that online retail is expected to command 22% of all global retail sales within the upcoming three years. 

This is an especially interesting trend for current ecommerce businesses as well as those who are still on the fence on whether or not to invest into ecommerce channels of their own. One thing that may very well accelerate this trend is, of course, the Coronavirus epidemic. Pasi Ilola from Posti adds to this point: “This epidemic has added a new kind of pressure on ecommerce, logistics and customer service. The companies that had previously invested into these areas and are able to scale-up their operations in this sudden surge of online shoppers are the ones that will capture larger market shares very quickly."

3. Augmented Reality isn’t a gimmick after all

Even though Augmented Reality (AR) has been around for a while now, in the upcoming years it will find truly useful applications in many industries – and especially in ecommerce. According to Gartner, as many as 100 million consumers will use AR while shopping both online and in-store. The bottlenecks up until now have been the processing powers of our mobile phones as well as the network speeds of our mobile internet connections. 

Posti’s Senior Vice President of Parcel and Ecommerce Arttu Hollmérus sees many exciting possibilities for AR. “Augmented Reality is great in that it enables consumers to do many brick-and-mortar activities in the comfort of their own homes. For example, we can see what new furniture could look like in our homes but we could even go as far as seeing what our new homes could look like even before they are built. Another interesting approach is Zalando’s use of customer avatars that allow us to see how new clothes might fit us even before we buy them. So this technology is basically allowing us to add those parts from the physical shopping experience that until now had been missing from online shopping.”

4. Mobile shopping becomes the strongest sales channel

Whatever we do and wherever we go, you can be pretty sure we wouldn’t go there or do that without having our supersmart mobile phones handy at all times. This goes for shopping as well, both in physical retail space and ecommerce alike. Google has been tracking online consumer behaviour globally and noticed that in Europe, 55% of online shopping is already being done on a mobile device.

Additionally, Google’s data shows that the better a brand is in creating an effortless and smooth experience with mobile shopping, the more likely it is that customers will keep shopping through mobile ecommerce channels. Actually, consumers will be 39% more likely to shop more through a company or brand’s dedicated mobile app and 77% are more likely to purchase from companies that offer a great shopping experience. 

5. Sustainability matters – and it actually matters a lot

Finally, one huge trend that ecommerce is quite obviously in the center of is sustainability and questions pertaining to how sustainable is it actually to buy online? According to a recent study from the International Post Corporation (IPC), over half of consumers would prefer carbon-neutral shipping and eco-friendly packaging materials with their deliveries. Further data based on ecommerce tech provider Nosto’s survey suggests that as many as 75% of environmentally-concious online shoppers “want brands to reduce the amount of packaging they use” –  representing a trend-setting group of consumers whose opinions may affect larger consumer groups eventually.

One area of business that is especially affected by and related to the sustainability trend in online shopping is the fashion industry. In McKinsey’s report The State of Fashion: Navigating Uncertainty, one key finding was related to the sustainability issue overall, as the authors of the report put it “Fashion players need to swap platitudes and promotional noise for action on sustainability measures such as energy consumption, pollution and waste” – a trend that will in turn have a huge impact on online shopping because clothing, shoes and accessories represent the most popular category in the global ecommerce market as we can see from the aforementioned IPC study: 33% respondents said they had bought goods in the ‘fashion category’ with electronics being a distant second at 23%.

There you have it, five large-scale trends to help you take your online shop to the next level and make sure you are not being outpaced by the competition – which by the way will keep getting tougher than ever.

Would you like to work with us at the forefront of the latest and upcoming trends in ecommerce and logistics? If so, check out our careers page to find out if we might have just the job for you!

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