There are thousands of ecommerce trends and statistics published online. Staying current with them is important, but it’s also time-consuming. Seriously, who has time for that?
We know that you’re busy. You don’t have time to read through a list of “38 Kinda Sorta Cool Trends in Ecommerce”.
That’s why we wanted to distill what we’re seeing in the industry down to 5 meaningful trends.
Let’s dig into the details that can help your online store stay competitive and anticipate what’s coming around the corner. Along the way, we also provide our reasoning because we don’t think a wall of statistics is that helpful.
Have questions or want to talk ecommerce? Reach out to us at email@example.com.
1. Social Commerce Will Take Over
The impact of social media and ecommerce are undoubted. Billions of people use social media on their smartphones today.
Apps like Facebook, Instagram, Snapchat, Twitter, and TikTok are household names and not going anywhere soon. Tons of kids, whether right or wrong, want to start YouTube channels to see if they can be the next MrBeast or Linus Sebastian.
According to Pew Research, only 5% of American adults had used one social media platform in 2005. That number has skyrocketed to 72% today. Adults spend hours each day on social media, engaging with content and viewing ads. Similarly, there are millions of ecommerce stores on the internet today. Literally millions. Shopify alone has over 1.7 million merchants as of the fourth quarter of 2020.
So it’s no surprise that these two trends have been converging. But at the end of the day, what is social commerce?
Social commerce is the process of selling products directly on a social media platform.
We believe this trend will take over ecommerce in the coming years. It’s already a huge phenomenon in China, with the mobile app WeChat driving billions of dollars in sales.
Frankly, this is a gradual process that has been happening for years.
Social commerce already accounts for 13% of ecommerce sales in China and it’s growing quickly. And a recent study showed that 58% of U.S. consumers “felt influenced by social media when making purchasing decisions”. Moreover, 87% of people have shared that “an influencer has driven them to make a purchase”.
These are the precursors. The things that we see before it’s painfully obvious that social commerce is the way forward.
Our insight is that social commerce will grow to become a giant in Western Europe and North America. We are seeing the signs now, with moves from Facebook and Instagram to build product catalogs more deeply into their core apps.
Shopify is also investing heavily in the space. In October 2020, Shopify inked a deal with TikTok to bring in-app shopping features to one of the fastest growing communities in the world. Furthermore, Shopify has released the Shop App which allows the company to build a direct relationship with consumers. Previously, Shopify was the backend that powered a single store. With Shop App, Shopify wants to bring together all of your carts, orders, packages, and more.
Don’t be surprised if this app morphs into something more social and more personalized in 2022 and 2023!
Your brand should take advantage of this trend by listing products for sale directly on social media platforms, collecting more user generated content, and engaging with customers in more personalized ways.
2. B2B Ecommerce is Growing
Ecommerce is no longer for consumers looking to aimlessly shop for clothes or household goods. Yes, people buy cosmetics, food, beverages, clothes, and yard furniture online.
Especially with the COVID-19 lockdown, and the corresponding home and yard renovation boom. But the overall composition of ecommerce is changing drastically.
Since the 2020 lockdown, business practices have shifted to accommodate distributed teams. And the outcomes are staggering.
Sales teams today need buttoned-up presentations, video conferencing tools, e-signature software, and a method for customers to purchase expensive products or services online. The ecommerce checkout is no longer for cheap, personal goods.
According to McKinsey “more than 75% of B2B buyers prefer online purchasing and remote sales interactions” to in-person interactions. This is a huge shift. The default for B2B sales is now online, instead of the default being in-person. The way B2B buyers engage with brands is changing too. Net Solutions found that 91% of B2B customers use mobile devices to search for products and 25% use them to make transactions. Gartner also found that B2B customers “wait until they are 57% through the purchase process before contacting a sales rep.” That means customers expect plenty of guides, tutorials, and FAQs to educate them before they contact the company. Similarly, a Forrester study uncovered that 93% of B2B buyers prefer to make their purchase online once they have arrived at a decision. So what does this all mean?
We expect this trend to accelerate. Now that large corporations have built systems to evaluate and approve purchases remotely, the door is wide open. We believe the relationship between vendors and customers has changed permanently.
The takeaway is that more and more B2B purchases are happening online. Even if you are a B2C brand, there is likely a B2B sales angle you should be pursuing. It’s important to allow expensive purchases to happen seamlessly on your website and online store.
3. Millennial and Gen X Prefer Online Shopping
While there are no universally agreed upon classifications for generations, most researchers agree that Gen X refers to people born in 1965-1980 and Millennials refers to people born in 1981-1996.
These are the two largest demographics today and shape the face of consumption. And their behaviors are not set in stone. They’re adapting.
According to a recent study, “Millennials and Gen Xers spend 50% more time shopping online than their older counterparts.” These generations spend 6 hours per week browsing online compared to 4 hours per week for older generations.
Millennials and Gen Xers spend 6 hours a week online shopping, compared to 4 hours for older generations.
These groups are also leaving brick-and-mortar stores behind. 67% of Millennials and 56% of Gen Xers prefer to shop online compared to making trips to physical stores.
Interestingly, across all demographics, 48% of “online shoppers begin at ecommerce marketplaces like eBay or Amazon” showing the power of search and discoverability on these platforms.
Sometimes, listing products on marketplaces is not to generate revenue but it is to build brand awareness. (Ask yourself if it makes sense to list limited SKUs or loss leaders on these platforms in order to drive more impressions.)
We anticipate that this trend will only accelerate with the rise of Gen Zers growing up with smartphones, tablets, and social media. If your brand does not have an appealing online presence, it will quite literally be left behind.
It’s not enough to have an ecommerce store. You need to invest heavily into branding, marketing, generating with customers, and making your products available across multiple sales channels.
Consumers want to know that brands have a conscience and a voice. It’s not changing your logo temporarily for a month. In fact, those empty gestures can often backfire.
People support brands that align with their goals. You need to figure out how to make that happen online.
4. We are Still Early into Ecommerce
Ecommerce is a $4.2 trillion dollar industry growing 9.4% year over year. In the United States, 1 out of every 10 retail transactions already happen online with the average North American online shopper spending $3,500 each year.
It’s no wonder that Jeff Bezos, founder of Amazon.com, is one of the richest people in the world!
So it might be counterintuitive to say that we’re still early into ecommerce. But that’s exactly what we’re going to stay.
We are still early into the ecommerce transition.
It can be difficult to understand how fast large numbers can compound. But here are some numbers to help us paint the picture.
Today, consumers spend a lot of time online researching products and services before making purchasing decisions.
They read reviews and fit guides before they buy clothes. They watch YouTube videos before driving to car dealerships. They go on LinkedIn to see if they know anyone at your company before contacting the sales team.
In fact, a recent study found that “77% of shoppers use a mobile device while shopping in stores” compared to just 35% of shoppers who speak to a salesperson if they have questions.
Think about that. Nearly 8 out of 10 people who are at stores will turn to the internet to answer their questions and aid their retail transaction.
It’s only a matter of time before more complex, more expensive purchases move online. Speaking of which, Tesla has shown that consumers are willing to purchase a $130,000 Model S Plaid by placing a $100 deposit from their phone.
No test drives. No dealerships. No complicated paperwork. Place a deposit in exchange for a spot in the waiting list for a six-figure Tesla.
As larger and larger purchases move online, we believe that ecommerce will grow to dominate the market. People will still transact face-to-face but that will be reserved for novelties and elevated customer experiences.
Out of convenience, almost everything will move online. Here is the most crazy statistic of them all.
95% of purchases will be made online by 2040!
Today, it’s 1 out of every 10 transactions. In the next two decades, we anticipate that number to grow to 9 out of 10.
We believe that brands need to evolve to create a more tailored checkout experience. The simple “add to cart” to purchase a commodity has been solved. So what comes next?
Successful ecommerce brands will develop educational content and software tools that allow large, complex products and orders to be processed online. The data is clear. People do not want to talk to gatekeepers.
Sales and support people have their place, but it’s now alongside content and a fully-featured ecommerce storefront. We believe this will usher in a new era of ecommerce.
5. Amazon is Not Going Anywhere
Here is our last ecommerce trend based on the data that we poured through. Despite what anyone says, Amazon is not going anywhere.
The ecommerce giant ended 2020 with $386 billion dollars of net sales. In addition, Amazon has positioned themselves as the go-to destination for most consumers. 89% of buyers are more likely to purchase products from Amazon than other ecommerce sites. And when asked why, 7 out of 10 people said they shop on Amazon due to the broad selection.
Yes, the company has tension with its marketplace sellers (who often compete with Amazon’s own brands) and regulators (who have talked about increasing Amazon’s corporate taxes or even separating AWS from Amazon.com).
But even if all of that were to happen, we don’t see how Amazon’s 200 million Prime members stop making multiple purchases per week with the online giant.
$386 billion in annual sales. 2.3 million active sellers on their marketplace. 200 million Prime members who are accustomed to free shipping.
And, if that’s not enough, buyers often turn to Amazon’s search tool first before going to Google!
We believe that ecommerce brands should spend time to understand how Amazon works and if selling on Amazon Marketplace works for their business.
Some brands may want to steer clear of Amazon entirely. They want to own the brand experience, customer service, and gain valuable insights from their ecommerce storefront data.
We are not arguing that every direct to consumer (DTC) brand should sell on Amazon.
Instead, it’s important to understand that Amazon is not going away. As you look to grow your store to millions in revenue, you need to have a clear reason to be on their marketplace or to steer clear.
For instance, we interviewed Dane Baker, founder of EcoCart, and shared how brands are using their websites to promote their sustainability efforts. This is a great benefit of having your own website and bringing customers into your brand’s mission and vision.
That brings us to our thoughts on content marketing vs. advertising, but we’ll save that conversation for another day!
Ecommerce businesses are prominent today and show no signs of slowing down. We believe the future of the ecommerce industry is bright, with healthy growth for years to come.
That said, the online shopping experience has changed significantly in the last few years due to COVID-19, new technology, and shifting behaviors. Ecommerce platforms like Shopify and Amazon Marketplace will become even more robust. Companies will find clever ways of sourcing inventory and reducing lead times from order to fulfillment. And much more.
We believe that mobile shopping and social shopping will continue to gain popularity.
It’s not just young adults who prefer to buy home goods or groceries online instead of making a trip to the store. Businesses are adopting consumer behavior and turning to online retailers for expensive, complicated orders.
Yes, the rise of artificial intelligence (AI) and machine learning (ML) are exciting. But those are technology trends and not necessarily ecommerce trends.
The best brands will continue to invest in technology that solves pain points and improves the customer experience. That’s nothing new.
We are more interested in the growth of social commerce, how fast B2B sales is mimicking B2C marketing, how much time Millennials and Gen Xers spend online shopping, the future growth of the ecommerce market, and the moat that Amazon has created for itself.
Digital brands look to clearly differentiate themselves should understand these ecommerce trends and take a stance. For instance, 8 out of 10 respondents in North America want to know the origin of the products they purchase and 7 out of 10 would pay a premium for recycled products (source).
These findings hold true globally as well, with 70% of international respondents saying they would pay 35% more for eco-friendly brands.
You can’t sit idly by. A Nielsen study found that 81% of respondents believe “companies should help improve the environment”.
Instead of turning to Google, consumers are increasingly turning to social media and their friends for product recommendations. They want to buy from brands that they believe in. They want to feel proud about the companies they are supporting.
Perhaps the most telling statistic of all was mentioned above but it’s worth repeating.
Experts believe that by 2040, 95% of purchases will happen online.
So now the big question: if that’s the inevitable future, how are you building a defensible brand and outwitting your competitors?
Did you like this article? Reach out to me: safa(at)alluxo(dot)com