Change is the only constant when it comes to consumer behavior. Think back to the nineties, could you ever have guessed that people one day would agree to buy a product without physically seeing it; even if the product is as meager as a coffee mug?
Your answer is most likely no. However, to our amazement, today as the world enters 2022, people have moved on to making some of their most significant investments online.
The primary catalyst for this transition in consumer behavior is the constantly growing technology. E-commerce has become a significant part of most economies worldwide due to rampant technology. Retail e-commerce sales worldwide stand at a staggering amount of 4.28 trillion USD at the end of 2021 and are expected to grab 21.8% of total retail sales worldwide by 2024.
These numbers clearly tell us that it is vital for any e-commerce brand to keep up with today’s trends and focus on getting a solid grasp on AI and other machine learning to make their businesses stand out.
Why do Modern Consumers Prefer E-commerce?
The constantly increasing shift of consumers towards e-commerce has its own reasons. Before you read about specific trends that are bound to dominate the upcoming e-commerce world, it is vital to know why modern consumers prefer it over the conventional business. Despite the looming threat of digital fraud, e-commerce is bound to be a mainstay for today’s consumers just because of the sheer convenience it provides.
So let’s delve further to understand why.
A Shift Towards Online Transactions
Almost all major countries in the world are promoting digital payments. It would not be wrong to say that the pandemic has added to this transition from cash payments to online exchanges. The luxury of online transactions allows you to pay for anything with just the click of a button. It eliminates the physical exchange of cash and provides a more socially distanced option. With the pandemic still being part and parcel of our lives, this shift is only expected to get more prominent.
Robust Payment Gateways
From online banking to e-wallets, e-commerce provides a myriad of options for payment. The ever-improving payouts and return policies of several businesses around the world are driving more and more people towards it every day.
Ordering from the Comfort of your Home
The customer is king and is always on the lookout for more comfortable options. Therefore, modern customers prefer ordering their products from the comfort of their homes rather than running around looking for specific items. This practice has been made even more efficient with smart shopping options like AR and VR, and image recognition setups that allow better assessment of product quality and increase shopping transparency. The constant advancements in virtual reality provide the option of taking a 360-degree view of items and doing a digital trial of the goods. With the concept of metaverse growing popular every day, the scope of jumping on these advanced immersive technologies is only bound to increase. As big e-commerce retailers today provide everything you need under one website, customers end up saving time and energy significantly.
Access to Large Inventory
This point is closely related to the last point. Most e-commerce firms provide their customers with a plethora of options. For instance, if you are looking for groceries, a major e-commerce site will most likely have all the items you have on your checklist. This saves you the trouble of running from store to store to complete your shopping list.
Ever-Improving Logistics Network
Customers nowadays can order anything online and have it in front of them within hours. For example, Amazon has a certain segment of products that can be delivered to a customer’s doorstep in merely 2-4 hours. The e-commerce logistic network is faster than ever, and it's only going to get quicker. With more warehouses being installed, and speedier transportation options being employed, e-commerce logistics is set to make more amends in the future.
List of Trends That Will Shape the E-commerce Future
E-commerce is driven by those who know how to keep up with the pace of this moving world. As we head into 2022, let’s look at 10 trends that will shape the future of e-commerce in the coming days.
1. Artificial Intelligence and Machine Learning is the Present and Future
These are probably the most significant aspects that separate an e-commerce business from a conventional one. Artificial intelligence and machine learning have taken the e-commerce game to the next level. AI helps in tracking the information of users on the platform while machine learning helps in understanding the preferences of a particular user. These two combined can help make the user come across exactly what he wants and build up an excellent click-through rate ratio.
A prime example of AI usage can be Amazon. If you look for a product on Amazon, the AI tracks that information and feeds you the same product through different platforms. If you open Instagram, you get sponsored posts related to a similar product you searched for. The same is also true for YouTube where you’ll get advertisements associated with the same product line. As a result, the buyer ends up purchasing the product more often than not.
2. Enhancement of Interactive Tools
Interactive tools provide customers with that human touch that e-commerce otherwise lacks. Chatbots and live chats keep the user interested and provide them with a sense of security. Moreover, the advancements in the user interface with the help of AR and VR assist the customer in finding out minute details about the product they wish to buy. This helps grant the user the assurance that the product offered is of top quality.
Lastly, personally curated promotional emails and tracking information helps make users feel more important.
3. Focus on Sustainable Products
Sustainability is no longer a negligible factor for online shops. In an effort to successfully address increasing demands of sustainability from their consumers, e-commerce businesses have been looking out for options for providing sustainable products for quite some time now. Modern consumers are gearing towards sustainable options and are constantly on the lookout for choices that aim to give something back to the environment. Environmentally friendly shipping options, avoiding packaging wastes, and monitoring deliveries and returns are some issues that e-commerce can look forward to in the coming days.
4. Consumers Will Always Prefer Free Shipping
According to the Consumer Trend Report of Q2 2021, 65% of consumers expect free shipping on every item that they purchase online. Moreover, 80% of customers expect free shipping on every dollar purchase they make online. It’s a psychological thing. Consumers don’t like to pay any extra fee in the name of delivery. However, they don’t mind paying a few extra bucks if they are included in the product cost itself. As a result, free shipping has a massive impact on sales conversion. If a consumer has added an item to his cart and sees that enticing icon of free shipping applied to it, they are more likely to complete that particular order. More and more online shops are working towards finding different ways of providing their consumers with free shipping. Rising inflation and the ever-increasing price of fuel is also something that makes the customers prefer free shipping over commuting to shop for a particular item.
5. Focus on Personalization
A customer is more likely to be attracted to curated suggestions. This is where the role of AI comes in. Using artificial intelligence to determine the preferences of the customer, and then providing them with personalized suggestions can increase your conversion rate manifold. 72% of customers say that they only engage with suggestions that are personalized and curated to their interests. With competition increasing every day, value-added personalized marketing can help a business in making its messages stand out.
It is all about making the e-commerce experience more immersive for the customer. Services like one-on-one suggestions can help your users in zeroing down on exactly what they want to get from your services.
Another very important thing that customers take very seriously in the modern setup is data privacy. E-commerce platforms around the world are making several conscious efforts to be more transparent with their data collection and providing customers with the option of personalizing cookies and notifications. Recommendations based on customers’ browsing data help them in negating fluff and getting exactly what they want. This allows every individual to build their own journey with the platform and will, in turn, increase customer retention.
This will not only help them in saving time and effort but will also help the organization in deploying their technical marketing efficiently. Moreover, a personalized message from their favorite store in a customer’s inbox will always put a smile on their faces. Hearing your name triggers a self-representational behavior in your brain. Meaning that you'll pay more attention to the message and be more likely to act upon it.
Most e-commerce sites use this tactic to attach a certain level of importance to their customers. A personal message that goes, “Hey_____, here’s what you can get from our ongoing sale” is often good enough to lure that customer into visiting the website.
6. Optimized Websites for more Conversions
SEO and social media marketing have become a must-have in today’s digital world. Sales conversions don’t just happen, there’s a whole set of rules and priorities used to boost conversions. E-commerce websites require heavy optimization to make sure that they are able to provide the perfect user experience to their customers. Moreover, you need innovative CTA buttons that will motivate prospective customers to check your website. Most consumers shop online through their smartphones. Therefore, it is extremely important to curate the website/e-commerce app accordingly to provide users with a smooth UI and hassle-free navigation.
7. The Rise in Sale Platforms
E-commerce is not just restricted to their website. Giant e-commerce firms use platforms such as Facebook, Twitter, YouTube, and Instagram to increase their sales. The AI used by these firms helps understand user preferences and feed them with the right data across several platforms. Social media marketing is something that is ideal for grasping the attention of modern-day consumers. Everyone is a fan of new and innovative methods of seeking information. Therefore, live photos, coupled with short videos, can be the perfect marketing fodder for today’s set of consumers.
8. Voice Search and Virtual Assistant
It’s all about providing more comfort to customers. Additionally, a machine responding to your voice brings in a certain sense of excitement. It is always more convenient to say, “show me some good sneaker shoes for men” than typing out the entire thing on a search engine. Seeing the positive response of consumers regarding virtual assistants, the AI of different e-commerce sites is more likely to keep upgrading voice preferences. Providing the option of voice search in different languages other than English is one example of this. As more and more people shift towards voice search, more e-commerce websites are expected to become compatible with these resources.
9. Robust and Efficient Distribution Channels
41% of the total e-commerce consumers are willing to pay an extra charge for same-day delivery of their ordered products. These statistics hint at the growing expectations of users from the concept of online shopping. Fast shipping not only makes for faster delivery but also impacts the overall experience of the customer in the following ways:
- Increases customer retention
- They are more likely to recommend the e-commerce site to their friends and family
- Decreases the number of abandoned carts
- Increases the average order value
From orders taking months to now being delivered in hours; e-commerce distribution channels have come a long way. An efficient shipping experience, coupled with options like BOPIS and delivery notifications is about to be a bifactor for the success of your e-commerce firm in 2022.
Wondering what BOPIS is?
It stands for ‘Buy Online and Pay In Store’, which allows customers to avoid long queues of supermarket stores by just placing their order from the comfort of their home and collecting it from their nearest store at their own convenience.
This feature can be best experienced in the grocery delivery services in the US. For example, the Kroger grocery delivery app provides you the option of same-day delivery for all your grocery needs. You can even mark your order online and collect it from your nearest store at your own convenience. This is how the highly-efficient shipping channel trumps the conventional method of shopping for literally anything the customer needs. With customers practically expecting to receive their goods in hours, the e-commerce distribution system is well on its course to becoming more efficient.
In addition, the e-commerce world is witnessing a trend of using social media as distribution channels as promotions. It does an excellent job in raising the word for your product since most of your target group is active on such platforms.
10. Multichannel Sales and Support
This is another aspect through which e-commerce spreads its horizons beyond its website. Most of the major e-commerce services provide 24/7 customer support over different channels such as call, text, email, and even Instagram DMs for that matter. Social media stores are also something that is gaining popularity day by day. It provides consumers with a hassle-free option of buying their favorite item while scrolling through social media. E-commerce retailers have the most to gain from social media platforms. Contrary to popular belief, social media isn’t hampering retail, it’s simply giving it a place to expand.
Quick Tips for Modern E-commerce Business
If there was ever an ideal time to start your own e-commerce business, it is now!
Inspired by all the trends listed above, here are a few quick tips for modern e-commerce businesses that might come in handy:
- Encourage contactless payment on your e-commerce portal. Allow people to make payments without hassle with just the press of a button.
- Use AI to understand customers’ preferences and provide them with exactly what they want.
- Use personalized customer experiences to make your consumers feel important. For example, send a weekly list of recommended items based on their previous shopping activities. Provide them with customized platform experiences by analyzing their daily activities and preferences.
- Provide customers with swift and secure payment gateways to ensure quick payouts and easy refunds.
- Dial down on a particular niche for your business. This will help people to associate your business with a particular genre.
It is impossible to predict the future, especially in these uncertain times that we live in. However, as far as e-commerce is concerned, these trends are most likely to shape the industry's future in the coming years.
The growing quality of web optimization for personalized marketing, ever-improving distribution, and the generation of new sales platforms are some of the factors that will heavily affect e-commerce as we move forward.
Did we miss out on anything? Let us know below your predictions for e-commerce in 2022!