Hello to Amasty blog readers!
Now, we are all used to say that e-commerce is still growing, that it’s showing rise in market volume, sales and revenue not only in top-performing economies, but in developing countries, too.
But what exactly does that mean?
Let us break down what happened in the world of e-commerce in 2017.
GLOBAL E-COMMERCE STATISTICS OF 2017
Retail e-commerce sales worldwide were 2290 billion US dollars and are expected to rise to 2774 billion in 2018, according to Statista. Thus, global e-commerce sales are predicted to show 20% growth, which is a huge number for business and certainly a steady trend with no signs of decline.
Same steady growth goes to the share of e-commerce when it comes to its global share of retail - from 10.1% in 2017, it jumps to 11.6% in 2018 as predicted.
Digital buyers penetration worldwide states for 46.4% and will increase to 47.3% in 2018.
Globally, e-commerce is a strongly growing domain with no signs of decline for 2018 and even the following years. It remains a popular choice for investments and new businesses, and further growth will promote custom Magento development methods, technology, and, of course, rising competition.
ONLINE SHOPPING TRENDS AND STATISTICS
- 18% of local searches lead to a sale within 24 hours.
- Mobile will be reaching 70% of e-commerce traffic by the end of 2018.
- By the end of 2017, over two billion mobile phone or tablet users made some form of mobile commerce transaction.
- Mobile commerce was hitting US$700 billion in revenue in 2017, which is more than 300% growth over the past four years.
That being said, mobile e-commerce is growing faster than e-commerce in general. And with Google's mobile first principle to roll out in 2018, being mobile is no longer a fancy trend - it's a necessity, avoiding which will lead to significant losses in sales and revenue.
"What some call ‘mobile first’ is in truth already ‘mobile majority’.
"...being mobile-friendly, having content that is quick, usable, graceful and compelling on smartphones is not optional."
Tom Grinsted, the Guardian
For those who sell globally, it's important to know that Asia is responsible for almost a half of the mobile commerce market. China, UAE, and Turkey have the highest number of mobile shoppers, with 68%, 57% and 53%, respectively, of the total population. Also, the emerging markets with the highest growth rates are India, Taiwan, and Malaysia. The first-world countries are not staying behind: the highest growth rates are detected in Japan, the United Kingdom, and South Korea.
What to do: simply speaking, your e-commerce store should be conveniently available on mobile, be it a mobile app, a separate mobile version or responsive design. Not tomorrow or next month - today.
ARTIFICIAL INTELLIGENCE TO BLOSSOM
The following graphic provides an overview of the areas in software that were found the greater potential for AI/ML investment. E-commerce is one of them.
Whilst artificial intelligence and machine learning have been a prerogative of huge global companies due to its price, the trend is inevitably growing, and we can expect some new cheaper tools to hit the market. Eventually, in a couple of years they will be available to each and every business.
- Forrester Research predicts that AI-related investments have grown by about 300 percent in 2017, with businesses becoming more competitive by 2020 and gaining $1.2 trillion per year.
- Gartner predicts that by 2020 over 80 percent of all customer interactions will be handled by AI.
Today, companies like Alibaba, Rakuten, eBay and Amazon are making their way with Al for chatbots, product recommendations, fake reviews detection, managing big data - and they're doing it not just for themselves. They're acquiring startups, build think tanks and invest money in technologies that will later be used by smaller businesses all over the world.
However, these powerful technologies are not perfect yet and need months and years of development - even though they're bringing proficts and reducing costs for their creators right now.
What to do: For those who aren't able to be involved yet, the best way is to stay on top of the info pyramid by getting solid knowledge of the capabilities that AL/ML can bring to e-commerce, and to be ready to incorporate them into businesses when they're widely available.
VISUAL AND VOICE SEARCH TO EXPAND
- Image and voice activated search may make up 50 percent of all searches by 2020.
- By 2021, early adopter brands that redesign their websites to support visual and voice search will increase digital commerce revenue by 30%.
- Voice-based search queries are the fastest growing mobile search type.
While voice and visual search are closely connected to AL/ML, they're more incorporated into e-commerce now.
There are lots of stats that say voice search is definitely growing. The voice assistants are taking the market - while they preoccupied almost every smartphone and tablet, now smart speakers from Amazon Alexa and Google Assistant are stealing the show.
Visual search is implemented not only by companies like Pinterest. Search engines are also improving the technology behind image search. While visual search is an enormous trend pushing the apparel and fashion e-commerce domain forward, for smaller companies this is not only about the technology, but rather about the rankings in search engines and marketplaces - which have their own peculiarities.
As visual and voice search use pretty much the same ranking factors as text search, there are additional factors connected to the content form as well. And it's more difficult to rank for voice search - as it gives only one result, not ten (as a typical Google search page). In such times of even greater competition, hyperlocal and personalized results take the stage.
What to do: study how you can rank for visual and image product searches on Google and other engines and keep a close eye on the tools that appear on the market to be ready to incorporate them into your business.
OMNICHANNEL IS THE NEW NORMAL
- Eight out of ten customers use their smartphones while shopping as in-store shopping assistants.
- 78% rate the importance of integrating e-commerce and in-store experiences as important/business critical.
- Digital influences up to 56% of in-store purchases.
Among all these e-commerce trends of 2017, omnichannel seems to be the most complicated one. It highly depends on customer service quality and experiences. Providing omnichannel experiences doesn't just mean that you allow your customers to conveniently browse your website while walking around your physical store; it means that you provide the same quality experience within all the channels of communication with your customer.
For example, the studies show that customers get really frustrated when the inventory data on the website and in-store does not match; or when they're getting different information about their orders or products online and offline, and so on. Thus, this trend is about high expectations of both technology and customers service, with the latter to be one of the most challenging areas of e-commerce.
And, of course, we cannot stress the importance of technology enough: from customer trackers to apps, from e-commerce platforms and solutions to digitalized stores - all of these are helping merge and incorporate e-commerce channels into one, along with improving inventory management, orders processing, managing data, prices and promotions.
What to do: you have to identify all the connecting points with your customers - from the website to the physical store, from social media to phone calls, and to make sure you're providing solid experience across all these channels altogether. Remember that omnichannel itself is not an aim - in the end, it is all about customer service and shoppers satisfaction. With the appearance of many connection channels experiences were split into pieces. Your task is to collect them together into one solid machine.
B2B E-COMMERCE ROCKING
B2B e-commerce global sales reach $7.7 trillion in 2017. Thus, B2B e-commerce market is twice bigger than the B2C one, and it continues growing.
And we see that the simplified B2C experience makes its way into B2B - that is why companies like Magento put additional forces into the trend of buidling advanced functionality for B2B market. Quote management, price negotiation, easy ordering, order and inventory management and other essential B2B e-commerce features are now available on Magento.
- By 2019, B2B firms will spend more on e-commerce technology than online retailers do.
- 89% of B2B researchers use the Internet during the B2B research process.
- 69% B2B entities say they expect to stop printing catalogs within five years.
- 80% of companies implementing B2B e-commerce believe that their customer expectations have changed due to B2C practices.
AUGMENTED REALITY (AR/VR) IS FOR REAL
Augmented reality will generate $120 billion in revenue by 2020.
After viewing the 2D printed display advert, 45% would consider buying, spend more on a product and show longer engagement.
As with Al, AR/VR is still a technology that needs a long way to go before it provides exactly the experience customers are waiting for. Still, now it is expected to rise the surprisingly low e-commerce conversion rates and to solve the big problem of online shopping returns, which has been causing losses to e-commerce businesses since it all even started.
What to do: Virtual makeup and try-on rooms, 3D visualization of furniture, AR storefronts, - all this looks like high-budget solutions. But even now you can implement many of the smaller solutions, such as 360 degrees shots and videos on product pages or adding a virtual dressing room to your store. Keep an eye on the market to see which new cheaper tools you can implement without challenging budget issues.
MORE E-COMMERCE TRENDS TO EMERGE SOON
Mobile Checkout Evolution
Statistics show that mobile e-commerce conversions are still lower compared to desktop ones. Among other reasons, it is the result of the fact that mobile checkout is still far from perfect when it comes to user experience.
In 2017, 28% of US online shoppers have abandoned an order in the past quarter solely due to a “too long / complicated checkout process” - which includes mobile shoppers, too.
The market is growing, new products and brands are appearing, and more personal interaction will help people choose exactly the products they want or receive the information they require to make a purchase.
While the brick-and-mortar return rate is around 9%, online it’s more than double that at 20%. During the holidays is can get as high as 50%, depending on the industry. 1-1 interaction should be of great help with solving the problem via omnichannel experiences.
In-store And Online ROI Merge
While online you can measure each and every step of a customer, in a brick-and-mortar store such marketing entities as customer journey, enter-to-purchase time and other parameters are measured differently or cannot be measured (yet).
More tools and technologies for measuring and tracking in-store customer behavior will appear in 2018, finally letting store owners merge the online and offline data to get the full picture.
Marketplaces To Grow Further
Amazon is estimated to be responsible for whopping 44% percent of US e-commerce sales in 2017. Same happens to other big players - and the trend will live into 2018. The growth of marketplaces continues in 2018 and will influence the map of e-commerce even further.
E-commerce is no longer just desktop, it's not only desktop and mobile now. Mobile, app, AR and other technologies are merging and now have nebulous borders, where we can't exactly define the shopper experience by its type - and it's no longer needed.
New Content And Ads
Based on new experiences such as AR/VR, new content and ad types are appearing and evolving in the marketing world. They are offering people completely different types of interaction, which gives birth to new marketing strategies and new sales channels.
Automation And Data Driven Decisions
As e-commerce is growing and becoming more complicated, more and more activities are being passed to the technology - from chatbots talking to people to marketing automation software producing data-driven decisions, leaving merchants with more time and effort to deal with more important tasks which cannot be solved with technology yet.
Dynamic prices are a trend which is only starting to penetrate the e-commerce market. But with rising competition, marketplace domination and hyperlocal marketing challenges, it will definitely grow in the next couple of years, as the market demands price flexibility built on AL and big data automation solutions.
That's a wrap for today!
From what we see now, e-commerce domain remains to be an impressive opportunity for business. It's not just replacing physical stores, it rather becomes a huge economical and technology symbiosis moving across the globe and shifting the way we exist, acquire products and services for our lives and perceive life every day. We're excited to be a part of this journey and to help thousands of businesses keep up with the latest changes.
PDF version of the article is coming soon.
Have a productive day!