Every eCommerce business is trying to follow the latest trends and stay up-to-date in an effort to be more competitive.
With the rise of AI, Chatbots, Augmented Reality and other emerging technologies, the eCommerce industry is changing forever.
In this article, we are going to see all the trends that you need to follow in order to stay ahead of your competition and grow your business in a sustainable way.
Ready? Let’s dive right in!
eCommerce Industry Overview
As you probably know, 2017 has been the year of Facebook Advertising.
With more than 2 Billion monthly active users, Facebook is the No.1 place for an eCommerce business to advertise its products.
This explains why 6 Million businesses (with 75% of them being from outside the US) from around the world are using Facebook to advertise their products and services.
As you can understand, with more than 3 Million businesses advertising on the platform, two things can happen:
- Competition is getting tougher
- The cost of advertising on Facebook is getting higher
In Q1 of 2017, Facebook earned 7.68 Billion from advertising alone.
Of course, we expect these numbers to rise, as the interest in Facebook advertising rises.
It is important to understand that as the interest in Facebook advertising rises, it will be much more difficult for social media advertisers to stand out and make a difference.
The above image clearly shows that Facebook dominates the social media advertising field, with more than 93% of all marketers are using Facebook Ads for their businesses or clients.
But, as we’ve mentioned earlier, as competition rises, so will the cost of advertising on the platform.
Facebook is about to go through a serious transition:
Big brands will start to advertise on the platform and thus small and medium companies will find it difficult to have a positive ROI from their advertising efforts.
As Eric Carlson, Co-Founder of 10X Factory puts it:
In 2018, one thing is guaranteed, Facebook Ad inventory will go up in cost.
Facebook has made a lot of eCommerce owners into millionares, but now big brands are realizing the power of Facebook and the cost is going up.
Thus, as we can understand, eCommerce owners have to find alternative traffic sources that will get them results in a low cost.
According to the Enterprise Guide to Global eCommerce by Shopify, in 2017 eCommerce was responsible for $2.3 trillion in sales and is expected to hit 4.5 trillion in 2021.
That’s a 246.15% increase in 4 years and is an amazing opportunity for every online retailer.
As we can see, the markets that dominate the global eCommerce landscape are:
Thus, according to Business.com:
- China with $672 Billion (eCommerce share of total retail sales: 15.9%)
- USA with $340 Billion (eCommerce share of total retail sales: 7.5%)
- UK with $99 Billion (eCommerce share of total retail sales: 14.5%)
Are the 3 countries with the largest eCommerce markets in the world.
Last but certainly not least, the Enterprise Guide to Global eCommerce by Shopify shows us that online shoppers look across the borders when they shop online:
Of course, that’s an amazing opportunity for online retailers who want to send their products beyond the borders of their country.
At this point, you realize that the power of eCommerce is unlimited and that even though some channels may be saturated or too hard to dominate, there will always be opportunities that will give online retailers the chance to grow their businesses.
So, bear with me, because I am going to share with you some of the most important eCommerce trends to follow in 2018 (and beyond).
1. Artificial Intelligence
As you probably know, Artificial Intelligence (AI) is taking over the digital field.
More and more companies across industries now use AI technology to:
- Offer a better customer service to their customers
- Create a personalized experience for their audience
- Provide customized solutions to complex problems
- Automate certain procedures that require both time and money
With companies like Microsoft and Google investing heavily into AI initiatives, it is only natural that AI belongs to the future of everything that has to do with digital.
As we can see in this amazing graph from cbinsights.com, some of the most recognized brands are now competing each other in the AI race.
Of course, Google comes first with than 14 acquisitions under its belt. Second, comes Apple, with 13 acquisitions.
As expected, AI acquisitions are increasing year after year. This graph from cnbinsights.com shows a 44% increase in 2017 and what will be the increase in 2018?
Well, we just have to wait and see!
A logical question that arises at this point is:
Why is this important for me as an online retailer and what can I do to be up-to-date?
According to a recent study by Business Insider, almost 85% of customer interactions will be managed without a human by 2020.
The way that businesses interact with their customers and audience will change and that will affect eCommerce businesses to their very core.
This is why eCommerce giants such as Amazon and eBay have already started to use AI to create a better and much more meaningful experience for their customers.
Thus, as we can understand, eCommerce is going to be affected by the rise of AI and its applications.
If we want to be more accurate as to how will AI affect eCommerce, we could easily identify the following areas:
If you are still wondering how can AI help your eCommerce business be more competitive, here are a few more applications:
- Use AI to predict sales (like Netflix does with their own audience!)
- Use AI to offer a better customer service at a lower cost
- Use AI to increase customer satisfaction
- Use AI to create personalized content
- Use AI to optimize customer searches (customer-centric search)
AI is taking over the eCommerce industry.
There is huge opportunity emerging from AI and its applications and, as always, early adopters will be the ones that will benefit the most out of this relatively new technology.
So, don’t get left behind.
Start exploring new technologies and adopt the ones that make sense for your business.
Let’s move on to the next trend!
2. Augmented Reality & Virtual Reality
A home design and interior decorator company named Houzz, introduced a new app that allows users to view and place items from a catalog of 500,000 images in their virtual rooms.
Now, someone would say, that this is a nice game for its users, but does it actually work as a sales tool?
Well, if we consider the fact that Houzz found that there is an 11x higher likelihood that users will purchase a product after viewing it in its app –
We understand that results speak for themselves.
In addition, the company discovered that users stay in the app 2.7x longer than before, so there is an increase in engagement as well.
But, Houzz is not the only company that uses such technologies.
IKEA with its IKEA Place app allows users to “Try before they buy” as it states in its official website.
IKEA Place is an augmented reality app that allows users to visually try their new furniture and see how they will like at their home.
Needless to say that results from the app usage are amazing and now, more and more companies are trying to replicate IKEA’s initiative.
To take this a step further, in this year’s F8 2018 (the annual developer conference held by Facebook), the infamous social network that owns Messenger, announced the ability for brands to integrate AR camera effects into their Messenger experience.
David Marcus (Vice President of messaging products at Facebook) opened the door to AR for eCommerce (and other kinds of online businesses) businesses that use or want to use Messenger as a sales channel.
Thus, it is only natural that more and more eCommerce businesses will start to adopt such technologies as the time passes.
But, companies are not the only ones that believe in the actual benefits of AR in their overall experience.
What does that mean?
According to an ISACA survey, 62% of US consumers believe that AR will improve their customer experience.
Augmented Reality and Virtual Reality definitely belong to the future of eCommerce.
It is not a matter of “if” they are going to be used, it’s just a matter of “how” they are going to be used.
So, take the next step and find out how you will use AR for your own eCommerce business.
3. Mobile Commerce
Did you know that mobile usage differs through the day?
As this amazing graph from Smart Insights shows us, mobile use is more common during the early morning hours, while desktop use is more common during daytime (10:00 am to 05:00 pm).
A hitwise report on mobile search trends indicates that 58% of all searches in Google are now coming from mobile devices.
In addition, this graph by Backlinko shows us that there are far more mobile queries than desktop ones.
In fact, Google says that there are 27.8 Billion more search queries on mobile than on desktop.
Today, almost 95% of all mobile searches are done on Google and for Google, mobile comes first.
Let’s see the official Mobile-Friendly Update that Google rolled out almost 3 years ago:
At this point, you have realized the importance of mobile and since you run an eCommerce business, you are wondering how this can affect your online store and more specifically your store’s checkout.
Something that we should keep in mind when it comes to optimization for mobile is how mobile traffic converts to a website.
According to an Adobe Digital Index Retail Report, mobile traffic doesn’t convert as good as the other two types when it comes to device.
Thus, generally speaking, you should expect a decreased conversion rate from mobile visitors.
Of course, you can optimize your website for mobile conversions and this is why we’ve included this trend in our list.
You see, it’s important that your website is optimized for mobile conversions, so that you convert as much traffic as possible to paying customers.
Mobile checkout is fast becoming one of the most important aspects of modern eCommerce.
Last year, Shopify added checking out via your phone, so that users don’t have to insert their Email in order to complete a transaction.
No doubt that this feature creates some issues, such as the fact that cart abandoners can not then be re-targeted.
All in all, it’s a great way to increase conversions and help customers complete their purchase, without having to use a desktop device.
Thus, if your website is not optimized for mobile conversions or you don’t have a mobile checkout solution, make sure to take action so that don’t miss out on this great opportunity!
4. Voice Search
As Mari Corella, fashion and beauty eCommerce specialist, points out:
“Voice will gain more prominence in 2018 as voice assistants such as Google Assistant and Alexa become commonplace.”
Voice is the interface of the future.
In fact, 20% of Google searches on mobile are voice.
But, why do you have to care about voice search and what can you do about it?
As a business that sells products to consumers, you have to think how a potential customer search for products like your on the internet.
Having a voice-optimized website is not something that belongs to the future.
According to a study of 10,000 Google search results by Backlinko, some of the factors that play a key role when it comes to optimization for voice search are:
- Page speed
- Length of the answers
- Domain authority
- Average word count of the page
Thus, it is expected that more and more eCommerce businesses will start to optimize their online stores for voice search.
Don’t get left behind!
If you are an eCommerce entrepreneur, then you’ve probably heard the term “personalization” a million times.
And, if you have heard of personalization, then you probably have heard that it’s really important when it comes to online entrepreneurship, marketing and even sales.
Approximately 58% of online shoppers have left a website for Amazon, after having a poor site experience.
It’s probably because Amazon offers one of the most personalized experiences out there.
What is really interesting, it the fact that 61% of marketers understand the importance of personalizing online shopping, but 51% of them are not sure how to implement it.
So, as we can understand, there is a perception – or even skills – gap when it comes to personalization.
Put simply, professionals know what it is, but don’t know how to implement it.
On the other hand, consumers not only understand what personalization is, but consider it to be a crucial factor that forms their overall online experience.
This explains why 84% of consumers would no longer buy from an organization that didn’t take into account their purchasing history or preferences.
When it comes to personalization, you always have to look at the bigger picture.
What do I mean?
Adding the name of the recipient to every Email campaign you send (yes, I know you still do that!) is not considered personalization.
On the contrary, sending messages that contain special offers based on each customer’s preferences, is.
Be aware that consumers are well-educated nowadays and thus have higher expectations from you and your online store.
All you have to do is meet their expectations!
6. Subscription Boxes
From clothing to gadgets, food and even fitness there is a subscription box for every taste.
A subscription box is a recurring delivery of niche products.
It is widely used (and misused) by eCommerce businesses from all around the world and it’s something that definitely belongs to the future.
Even though it is not a new product distribution method, it is extremely popular across industries and in different ages.
Many eCommerce businesses have already adopted this new distribution method that is based on a subscription business model and consumers seem to embrace it.
Below we can see how a subscription box from Sparkle Hustle Grow looks like:
According to an article by Forbes, the subscription eCommerce economy has grown by more than 100% over the past five years.
The same article mentions that some of the largest online retailers generate more than $2.6 Billion in sales in 2016.
A research by McKinsey & Company indicates that 15% of people who shop online have signed up for one or more subscriptions, in order to receive products on a recurring basis.
The same research found that women account for 60% of all subscriptions, while men are more likely to have 3 or 4 active subscriptions.
As you can understand, subscription boxes are great for your eCommerce business to have a recurring revenue and – at the same time – have more loyal customers.
This is happening because people want to be treated individually and – above all – want to feel special.
The truth is that subscription boxes is a nice way to make your customers feel special by sending them special products.
Subscription boxes may not fit your eCommerce business but if it does, make sure to give it a try!
7. Influencer Marketing
There are many channels and traffic sources that work well and in most cases generate revenue for the companies using them.
There is one though that works particularly well and for a good reason.
Many online retailers would say that this sales channel is already saturated but this is far from true.
You see, there is something that makes influencer marketing much more powerful than other traditional acquisition channels:
Most influencers or micro-influencers have a loyal audience; an audience that is willing to consume products just because their favorite influencer uses them or likes them.
One of the 6 principles of persuasion, as mentioned in Dr. Robert Cialdini’s legendary book Influence – The Science of Persuasion, is “Liking”.
Put simply, people tend to say yes to those they like.
This is the main reason why influencer marketing is so powerful and this is why it will continue to be one of the most powerful acquisition channels.
Some of the most commonly used influencer marketing strategies according to BigCommerce are:
- Content featuring your products
- Product reviews
- Promote giveaway contests
- Offer discount coupons
- Offer custom URLs for free access
Just before we move on to the next trend, we’ve got to mention one common mistake among eCommerce businesses and this is the fact that most businesses believe that influencer marketing is too expensive to try.
But, as in every other aspect of online entrepreneurship, you test and based on the results you double down your efforts in what is working and stop the ones that proved inefficient.
Thus, if you want to find out whether or not influencer marketing is working or not, all you have to do is try it for your own business.
It’s not easy for us to be objective when it comes to Chatbots.
Well, because this is (almost) what we do!
We help online retailers automate conversations and start earning from their Messenger audience.
But, let’s look at some facts.
According to a recent report by Grand View Research, the global Chatbot market is expected to reach $1.23 Billion by 2025.
That’s a compound annual growth rate (CAGR) of almost 24.3%.
Many big and many small-to-medium eCommerce businesses now use Chatbots to communicate more quickly and effectively with their customers and audience.
With the rise of messaging apps, Chatbots are fast becoming the No.1 way for businesses across industries to communicate with their customers and offer solutions to their problems in 0 time.
Domino’s is using its Messenger Bot Dom, to help users place their orders in no time and hassle-free.
Many eCommerce businesses are now using Chatbots to:
- Automate conversations with their audience
- Reach a wider audience across different touch-points
- Recover their abandoned shopping carts
- Inform their audience about special offers and promotions
- Send segmented campaigns based on their audience’s preferences
- Give answers to FAQs
One of the most popular messaging apps, Messenger, now has more than 1.3 Billion monthly active users.
Why is this important for me and for my business?
I am glad you asked.
Even though there are 1.3 Billion users on Messenger, there are only 300,000 Messenger Bots that handle the communication with all these users.
In addition, there are 20 Million businesses that exchange 8 Billion messages with their audience on a monthly basis on Messenger.
This is a great potential for eCommerce businesses that want to reach their audience in a new and unexploited sales channel such as Messenger.
Back in 2014, in a public Q&A session Mark Zuckerberg said that:
“Messaging is one of the few things that people do more than social networking.”
It is more than obvious that what Mark said 4 years ago still applies.
Chatbots belong to the future and if you want your eCommerce businesses to stay competitive, you’ll have to use them and take the most out them as they rise.
It is evident by now that eCommerce is changing.
In addition, starting an eCommerce business is different than it used to be.
Most eCommerce businesses have started to shift towards a more customer-centric approach, in an effort to retain their current customers.
Acquisition is, of course, important but always comes second.
Traditional eCommerce will start to fade and will soon be replaced by a modern version that requires eCommerce businesses pay attention to:
- Artificial Intelligence
- Augmented Reality and Virtual Reality
- Mobile Commerce
- Voice Search
- Subscription Boxes
- Influencer Marketing
Pay attention to these areas and make sure to adopt these new technologies that will take you and your business to the next level.
Now I turn it over to you.
What are the areas that you think are most important when it comes to eCommerce?
Let me know what you think in the comment section below.