Founder of multiple e-commerce stores, the education program eComBuilder, and the first German Shopify Education Partner.
E-commerce sales amounted to more than $3.5 trillion in 2019 with a projection to reach $6.5 trillion by 2023. As such, the influence of e-commerce will be far greater moving forward than it has ever been before.
The following outlines three key ways that I believe e-commerce will shape the future.
Footfall in traditional brick-and-mortar stores will take a hit
It goes without saying that as e-commerce continues to grow from strength to strength, the number of people visiting physical stores will see a significant reduction. The impact of Covid-19 on e-commerce (with a huge shift to online sales) is unlikely to be temporary. Rather, these changes can be taken as a microcosm of what’s expected to be a future reality.
Brands that weren’t previously online will now be wise to the importance of having a web presence. With 63% of shopping occasions beginning online, it is essential for businesses to put their products or services in front of their potential customers on the web, even if these customers end up making the final purchase in a local store.
Even with this click-and-collect model taken into account, the need for brick-and-mortar retail space will continue to fall because retailers can now rely on advanced logistics systems. Increased efficiency takes away the need to hold large quantities of inventory, which further serves to diminish physical footfall.
Shopping experiences will become the standard
Already we are starting to see more consumers demanding experiences. In fact, the experience economy is expected to be worth $12 billion by 2023, and this trend also extends to the e-commerce sector. But what will this look like in the case of e-commerce specifically?
Well, it will likely take the form of highly interactive online shopping experiences led by augmented reality. With e-commerce competition becoming increasingly fierce, this type of approach will act as a key differentiation factor that gives certain brands a competitive advantage.
This change is partly driven by the need of the modern consumer to share their participation in experiences and activities on social media. Shopping is already treated as a type of leisure activity, which will continue to draw more customers to a new wave of lifestyle brands that provide the experiences and social sharing opportunities they crave.
There will be a greater preference for environmentally and socially conscious brands.
It’s no secret that the consumer of today is more informed and, therefore, has greater expectations. Where price was once viewed as one of the single most important factors that influence buying decisions, there are now other critical factors that play prominent roles.
A new generation of conscious consumers is taking over around the world, and the people care deeply about environmental and social factors. In an extremely competitive e-commerce market, some of the key questions consumers now ask before committing to a purchase include:
• How are the products being made?
• Are the materials sustainable?
• Is the brand socially aware and active?
• Are manufacturing practices ethical, including the way workers are treated throughout the supply chain?
As the sustainable movement continues to grow, brands must cater to the change in consumer behavior. The same goes for social responsibility. Customers now demand that brands show them, and not just tell them, about their social efforts. This means companies must have a comprehensive understanding of their audience’s values and be authentic in their actions by demonstrating real impact over time.
Brands that fail to adapt with the times will fall by the wayside as more and more customers start to actively seek out environmentally friendly and socially responsible options.
Look to the future.
In an increasingly digital world, e-commerce is playing a key role in shaping the future. The coming years will certainly bring numerous innovations and exciting changes. In addition to this, customers will hold even more power than they do now. This means that brands will need to invest more resources into understanding and keeping up with their evolving needs and expectations.