As we approach the dawn of a new decade, it’s a great time to reflect on what has been done and look forward to what’s coming up in the e-commerce world.
E-commerce continues to grow tremendously. Southeast Asia’s Internet economy exceeded $100 billion for the first time in 2019. Likewise, worldwide retail e-commerce sales amounted to $3.53 trillion and projected to grow to $6.54 trillion in 2022. In this article, Parcel Monitor highlights 7 significant e-commerce trends predictions in 2020 online retailers should sit up and take note of.
In a nutshell – Parcel Monitor’s e-commerce trends in 2020 predictions:
- Google Shopping is a force to be reckoned
- Offering multiple payment methods beyond the regular Visa/Mastercard/AMEX will be the norm
- Expectations on delivery speed and flexibility will continue to rise.
- Machine learning and AI advancements will play an increasingly important role the logistics industry to predict, forecast and optimize routes
- ‘Shoppertainment’ as a retail promotional strategy will grow
- More will expect progressive web apps (PWAs) as part of their omnichannel customer experience
- Re-commerce, or online second-hand shopping is also on the rise
E-Commerce Trend 1: Google Shopping is become a force to be reckoned with in the online marketing space
If you haven’t seen it already, Google Shopping was recently upgraded with a redesign and several sleek new features make it a super exciting channel for e-commerce retailers in 2020.
Some of the new features Google has introduced to Google Shopping this year:
- Personalised homepage that shows the shopper useful product suggestions and sections that help you reorder common items or continue their shopping research.
- Price tracking that notifies customers if the prices of products in their wish lists drop via email or phone
- Filter and sort prices in local stores by proximity
- Purchase products directly from Google
View the experience here:
What this means for retailers:
Released in direct competition to Amazon, we love how this opens a whole new channel for visibility and marketing using the rich insights and data that Google holds. Retailers can now consider implementing Google Shopping Actions if they want to get prominent visibility in international markets.
If you’re generating satisfactory sales in your domestic market and looking to expand to international markets, this could be a viable initial strategy to target international markets.
E-Commerce Trend 2. Offering multiple payment methods will be the norm
If you’re an online retailer or someone tasked to drive sales or smoothen out the customer experience, take note: alternative payment methods are gaining in popularity.
In 2019, 55% of all online transactions are predicted to be made using alternative payment methods (APMs). This number will only continue to grow in 2020.
What is considered an alternate payment method?
“Alternative payment methods are defined as a way of paying for goods or services which are not made via cash or major card schemes (Visa, MasterCard, American Express). This includes prepaid cards, mobile payments, e-wallets, bank transfers, and ‘buy now, pay later’ instant financing.”
For instance, you may be familiar with these alternative payment methods:
- Apple/Android Pay
- Shopify Pay
Image Source: Apple
Instead of being tied to conventional payment methods like credit cards, consider integrating other options to give consumers the luxury of choice for their payment methods. Some methods like Shopify Pay also enable the customer to save their payment information for a more seamless checkout process.
What this means for retailers:
As you think of initiatives to improve customer experience, consider that users want making a purchase to be as frictionless as possible.
While lack of available payment methods are not the primary reason why potential customers abandon their cart, (high shipping costs and lack of communication on checkout are!), consider taking every available opportunity to prevent shoppers from leaving your site.
E-Commerce Trend 3. Expectations on delivery speeds and flexibility will continue to rise. Delivery companies will continue innovating to meet these expectations.
“2020 promises to be a year when everything is faster. More shoppers will be able to receive their purchases for same-day delivery and next day may become a standard shoppers expect for all their purchases. Store-based retailers will be an important cog in that process.”
—Lauren Freedman, senior consumer analyst at Internet Retailer’s parent company Digital Commerce 360
Consumer expectations around delivery will continue rising as we head into the new decade.
Carriers like FedEx and UPS are investing heavily in their own logistics networks and exploring operational changes to meet these new demands. Local logistics carriers are increasingly employing automation and smart equipment to improve their parcel sorting capabilities.
What this means for retailers:
There’s immense pressure on retailers to continue raising the bar on their delivery experience amidst challenges of rising transportation costs, margin pressures from competitors and the need for increased visibility throughout their supply chains.
With a new year, it might be a good time to evaluate how your logistics carriers have been performing over the last year. Stay vigilant in collecting, interpretations and acting on your logistics data.
- Have they been performing according to their SLAs?
- Have you considered developing relationships with other carriers to test their service?
E-Commerce Trend 4. Machine learning and AI advancements will continue developing in the logistics industry
AI and machine learning are ripe for the e-commerce industry. And with good reason – machine learning can help enhance customer service with automated chatbots, make future predictions about sales, improve the post-purchase experience and even provide customers with a more personalized experience.
We’re particularly excited about machine learning developments in logistics. Implementing machine learning in logistics can optimize supply chain processes, reduce human error and drive greater efficiencies.
AI is on the rise. The number of organizations that have deployed AI in their work grew from 4% to 14%, according to Gartner. AI will also play a bigger role in automating customer service and extending coverage round the clock. There’s also great potential even on the customer experience side – predicting estimated delivery dates of parcels, personalising experiences, reducing customer wait time and customer service quality with automated chatbots… the possibilities are exciting!
E-Commerce Trend 5. ‘Shoppertainment’ – the combination of entertainment and gamification will continue to grow as a promotional strategy in retail
We saw this especially during Alibaba’s Singles Day sales, where popular influencers live-streamed themselves unboxing gadgets and giving reviews of their favorite brands. They even use these opportunities to offer discounts, while shoppers buy the featured products without needing to close the live stream.
Consider these mind-boggling statistics:
- US mega-influencer Kim Kardashian West sold 15,000 bottles of her perfume while taking part in a live stream alongside Viya, a Chinese influencer with more than nine million followers.
- Nearly 20 billion yuan (7.5% of total sales) came from live streaming alone
“Livestreaming is popular as it plays on the long-popular theme of TV shopping, but in a much more interactive and entertaining way, The simple one-click purchase taps into Chinese consumers’ love of convenience, shopping and entertainment, amplified by the KOL (key opinion leader) factor.”
Mark Tanner, founder and managing director of Shanghai-based consultancy China Skinny.
What this means for retailers:
Livestreaming is a booming practice especially in China, projected to be worth US$12.6 billion by the end of 2020. Southeast Asia is quickly catching on as well, with e-commerce platform Shopee launching its own live streaming service in March 2019. The app has already garnered 200 million views across Southeast Asia and Taiwan.
What makes live-streaming so enticing? Perhaps it’s the desire for authenticity and the human connection – there’s no second takes, editing or Photoshopping with live-streaming. What you see is what you get.
Live-streaming as a platform also prioritises customer convenience. Brands and content creators can showcase their products in real time and answer any questions about them whereas customers can purchase these items without leaving the platform or navigating to another website.
It’s crazily effective. And engaging – as the numbers prove.
E-Commerce Trend 6. More will expect progressive web apps (PWAs) as part of their omnichannel customer experience
If your e-commerce shop relies on mobile apps for traffic, sales and to manage your listings, you’ll want to take note of this growing development.
Gartner Research predicts Progressive Web Apps will replace 50% of all consumer-facing native apps.
But wait, what is a progressive web app?
It’s a mobile web page that acts and feels like a regular native app; with the same accessibility advantages that mobile apps enjoy.
However, PWAs are lighter on phone storage and more reliable in slower Internet speeds – making them even more accessible and versatile compared to conventional apps. They operate in a browser, hence there’s no need to download anything from an App Store.
Brands that launch PWAs enjoy increased user engagement, conversions, faster load speeds, and higher mobile revenue.
What does this mean for retailers?
If you’re analyzing your web analytics and find that your e-commerce shop isn’t performing to satisfaction, consider looking into a PWA solution. Mobile page bounce rates increase drastically when page load speeds increase by mere seconds, affecting your conversion rates and hence your bottom lines.
E-Commerce Trend 7. Re-commerce, or online second-hand shopping is also on the rise
Think of thrift shops.
Now think of those thrift shops going online.
That’s the gist of re-commerce – which focuses on the buying and selling of pre-owned goods, especially in fashion.
Going re-commerce is a double win for consumers today – they get a fantastic bargain at a lower price point and also give themselves the peace of mind of managing their own consumption habits.
Concerns about ethical and the environment rank especially higher amongst the younger generation. EY’s report on Generation Z says “the younger gen places a greater emphasis on their role in the world as part of a larger ecosystem and their responsibility to help improve it.” Generation Z actively look out for alternatives to reduce their own carbon footprints and waste generated by looking out for resale sites and apps.
“The younger gen places a greater emphasis on their role in the world as part of a larger ecosystem and their responsibility to help improve it.”
Second-hand shopping is also a growing trend in other segments:
- 64% of women buy and are willing to buy pre-owned clothes
- 59% of overall consumers expect retailers to create clothes ethically and sustainably.
- 49% of online consumers would choose to buy products from businesses that are taking action to reduce their impact on the environment.
What this means for retailers:
Re-commerce is growing at a tremendous pace. Coresight Research indicates re-commerce merchants are growing 20-times faster than the broader retail market and five-times faster than off-price retailers, especially in clothing, shoes, and accessories. More broadly, there’s also a growing wave of awareness around ethical shopping and environmental consciousness.
Here’s what you can consider doing to adapt:
- Be aware and transparent around decisions made in your supply chain or product origins. Understand how your products are manufactured; from the type of labor used, the conditions your workers live in and where your raw materials are sourced.
- Consider a partnership with a re-commerce company if your company sells clothing, shoes or accessories.
What’s next for e-commerce trends in 2020?
E-commerce continues to be a dynamic industry – with lots of growth potential and changes afoot. Any changes or trends that you’re particularly excited about?