Before we get into eCommerce technology and trends, let’s take a moment to put the eCommerce industry into perspective. In 2017, retail eCommerce sales worldwide reached $2.304 trillion, with China leading the way, pulling in almost $900 billion from eCommerce alone. Bringing that closer to home, Australians currently spend nearly $2 billion per month on online shopping, and that figure is tipped to rise dramatically by 2020. Aside from consumer demand, technology is playing a pivotal role in reshaping the eCommerce landscape. According to recent studies, in 2015, less than 10% of consumers used a smartphone to make an online purchase. Fast forward to 2020, and 45.12% of people are now using their smartphones.
There’s no doubt that shifting consumer patterns are driving huge change in eCommerce, but it’s the technology that’s underpinning the foundation of modern online retail. Here are five ways technology is shaking up eCommerce:
1. Social Commerce
Social media and eCommerce have always had a natural synergy. Take a look through your Facebook feed, and you’ll notice friends asking for and sharing product and service recommendations. While shoppers aren’t explicitly using social platforms to buy, they do play a pivotal role in their path to purchase. As technology fuels new iterations of social commerce, the impact it’s having on the industry is profound.
Pinduoduo, the latest app from China, is an excellent example of how technology is closing the gap between social and shopping. This shop-with-friends app allows shoppers to share deals across their social networks and form groups to take advantage of discounts. Harnessing a group mentality, the lure of this app is more than the low prices – it’s the social proofing of products. The proof is in the numbers – Pinduoduo was recently valued at $1.5B and is set to IPO.
Social commerce is fast gaining headway with eCommerce platforms like Shopify. Offering a way to sell items on your company Facebook page and Instagram’s shoppable posts allows customers to purchase items with a single click, without having to leave the Instagram app.
2. Artificial Intelligence
A recent study by Gartner predicts that by 2020, 85% of customer interactions will be managed using Artificial Intelligence (AI). It’s safe to say that the way we engage with customers is changing and it’s technology that’s driving this shift. Outside of using AI to stimulate conversations, machine learning can be used in eCommerce to analyse and predict sales patterns. This is already playing out on Netflix where the platform will predict what viewers want to see before they know themselves. From a CMO’s perspective, using AI to wade through mountains of data to predict patterns can be a serious weapon for gaining a competitive edge.
3. Supply Chain Efficiency
Today’s consumers have a buy-now mentality which extends to frictionless service and speedy shipping. Because retailers like ASOS have set the bar with free returns and fast delivery, online retailers of all shapes and sizes need to tighten their supply chain to stay in the game. With eCommerce tech-stacks getting more complicated, the key to managing supply chain efficiency is through technology and integrations.
From a customer perspective – transparency is king. When a customer places an order, they expect to be able to track their order status in real-time, from on-screen to on the doorstep. From a business perspective, having the technology in place to manage multi-carrier, multi-warehouse, multi-store, multi-location or multi-user supply chain systems is no longer a nice to have, but a necessity.
Cloud-based technology is helping e-retailers, reduce shipping costs, simplify their logistics, analyse their spend and seamlessly manage returns for both the customer and retailer.
4. Seamless Payment Processing
Customer experience has become a huge driving force in eCommerce, and the push towards seamless transactions affects payment processing. With payment issues up there as one of the leading causes of cart abandonment, online retailers are turning to technology to find faster, smarter payment methods.
The last few years have seen monumental shifts away from traditional payment methods like credit cards. Instead, there’s been a widespread rollout of alternative payment methods like Buy Now, Pay Later platforms, digital currencies like Bitcoin and other contactless technologies.
5. From Buying to Selling
Traditionally, the focus for eCommerce has been on buyers for the simple reason that they create more demand than sellers. A recent study in the INFORMS journal Marketing Science paints a different picture, stating that sellers are in fact 3.5 times more impactful than buyers in driving the growth of eCommerce platforms.
From an eCommerce perspective, we’re starting to see a shift in the way technology is being used to the advantage of the seller. Platforms like Shopify and BigCommerce are leveraging technology to give sellers greater transparency over how they run their operations, marketing and logistics. With APIs and integrations giving online store owners access to a range of platforms and services, eCommerce is no longer a micro-management game – it’s now more a case of plug-n-play.
The Wrap Up
Technology is changing the eCommerce game for both buyers and sellers. Customers have frictionless new ways to shop, pay and interact with online retailers and retailers are seeing the upside of predictive marketing and personalisation. As technology continues to evolve, it will open up opportunities for the business and consumer.