E-Commerce Trends to Watch This Year
Here we are, one month into a new decade. The beginning of 2020 signals an era of transition. From ecommerce operations to consumer preferences, the retail industry will need to become accustomed to dramatic change. Innovations in technology have helped improve fulfillment efficiency, which has led to a corresponding effect on consumer expectations. Yet with global, political, and financial uncertainties hanging in the balance, many in the retail industry are left wondering what’s next.
Despite mounting concerns about 2020, consumer spending is on the rise and shows no signs of slowing down. Global eeommerce sales are anticipated to hit $3.46 trillion by the end of the year, up 17.9% from 2018’s figure of $2.93 trillion. Further, by 2022, eCommerce sales are expected to reach $892 billion in the US alone. Online shopping is increasing thanks to a multitude of factors. To gauge some of these causes and see where the retail industry is heading, explore our predictions below.
Personalizing the Customer Experience
Consumer preferences are rapidly changing. From marketing and customer acquisition to checkout and fulfillment, shoppers expect a seamless and personalized experience. Convenience and immediacy have become key to removing friction from the customer journey as well. As social commerce continues to grow, consumers expect a targeted message on Instagram where they can purchase goods with the click of a button. Additionally, more options are preferred when it comes to order fulfillment as we are seeing with the rise of Buy Online Pick Up In-Store (BOPIS).
The answer to solving the personalization dilemma lies in data. Retailers that are able to both harness and analyze data will be able to make the calculated decisions to improve their customer experience and give shoppers the personalized process they desire. However, only 27% of global retail and wholesale purchase influencers say that improving the use of data insights is currently a top priority. Artificial intelligence and machine learning tools can help dissect the data retailers receive, but it starts with the desire and capability of getting smarter about customer experience.
Sustainability Becomes a Priority
What used to be a differentiator for certain brands is now becoming industry commonplace. According to Forrester, 54% of US online adults believe companies should improve local communities, 51% like to buy environmentally friendly products, and 46% like to buy products that are made locally.
Taking an environmentally friendly stance is not just a nice thing for brands to do; it will become an expectation this year. The textile sector still represents 6% of global greenhouse-gas emissions and 10 to 20% of pesticide use, while solvents and dyes used in manufacturing are responsible for one-fifth of industrial water pollution. The 2020s will mark the decade of responsible retail, where socially conscious consumers will embrace brands that are proactive about cutting down on waste and using sustainable materials and processes.
Health, Wellness, and Everything in Between
What many had thought was a fad is now becoming a driving force in the retail sector. Brands (large are small) have started to tap into health and wellness, an industry segment that is on the rise. Tech giants are looking to get a part of the action, as demonstrated by the new Apple Watch and Google’s recent acquisition of the health-focused wearable Fitbit.
As consumers prioritize health, retailers will follow suit. Retail enterprises like Walmart, Amazon, and Best Buy have jumpstarted the race into the healthcare space. From an improved focused on senior health products to testing branded clinics to improving consumer health education, big-box retail brands see a significant opportunity in healthcare moving forward.
All the while, the rise of CBD has moved beyond skepticism to major market adoption. Sales from CBD-based products are expected to increase by 700%, making it a near $5 billion market. With a variety of retailers (from lifestyle and beauty to food and beverage) infusing their products with CBD, this is a trend to keep top of mind in the year ahead.
While the future of ecommerce involves uncertainties, one trend stands out. Success is inherently tied to anticipating the changing preferences of consumers and delivering an experience consistent with their wants and needs. For online retailers, remaining educated and adaptable to the oncoming industry changes is a great way to get ahead in the new year.
With extensive experience in 3PL, end-to-end, and omni-channel commerce solutions, Zach Thomann leads the PFS Operations practice as EVP and GM. He’s held multiple VP and GM roles within the business and continues to innovate its processes and capabilities.