Yet another year has flown by as we now await the start of a new decade! But while the dates might be changing, one thing remains constant—the upward trend in eCommerce growth.
In 2019, global eCommerce sales reached 3.5 trillion US Dollars, accounting for 14.1% of all retail sales worldwide. And this figure is forecast to grow to 22% by 2023. The strength and dynamism of the eCommerce industry are clear. And with this growth, we’re witnessing change and innovation as businesses look to stay ahead of the curve. But with this advancement in technology comes challenges for merchants. After all, it’s difficult to know what digital initiatives to prioritise and where to focus your efforts for maximum impact.
Ecommerce Trends 2020
With this in mind, and based on our experience of working with businesses across the globe, I’ll be running through some key 2020 eCommerce trends and what these mean for your business.
Let’s get started…
Conscious consumerism
Disinformation, fake news, climate change and political divide—today’s consumers are living in turbulent times. And as a result, more and more consumers are aligning their wallets with those companies they agree with socially, ethically and philosophically. This doesn’t necessarily mean that you should come out all guns blazing with your political and social views. But knowing that your customers are guided by their moral compasses should be in the back of your mind, at all times. Businesses will no longer be judged on just price and delivery times but also on questions around trust, openness, authenticity and compassion.
KEY TAKEAWAY: “We see an increasing number of enterprise companies looking at the UN’s 17 Sustainable Development Goals (one of which is Responsible Consumption & Production) and thinking about the ways in which this can tie into their eCommerce strategies. Given that these global challenges are getting more top-of-mind, think about ways in which you can turn this into a value proposition for your customers. This could represent another route in differentiating your brand—increasing loyalty as a result.”
Direct-to-consumer business model
Manufacturers have traditionally sold products through retail distributors, meaning they have no say in how a product is sold and delivered. So the manufacturer’s reputation is, to some extent, left in the hands of a retailer. At a time when customer experience is everything, this gap in customer interaction is ringing alarm bells for manufacturers, and rightly so.
Manufacturers want to be closer to their customers—thereby having greater control in a rapidly-changing and often unpredictable commerce landscape. A direct-to-consumer (D2C) model provides manufacturers with exactly that.
Given the need for meaningful, personalised experiences, this trend is only likely to increase as manufacturers look to forge greater relationships directly with their customers. At Vaimo, we’ve seen a strong shift over the last couple of years. With our help, several manufacturers have started to plan and execute their D2C business models in reaction to the changing landscape. And we’re expecting many more of our clients to move in the same direction, for greater digital commerce success.
KEY TAKEAWAY: “Firstly, there’s a rising trend in consumers who want to engage with brands directly. Rather than just going through a random retailer, they want to connect with—and be a part of—that brand. Then, there’s also manufacturers who want to own the customer experience across the whole purchasing journey, leaving nothing to chance. Direct-to-consumer is happening right now and if you’re not going down this route, then you should be. This is a definite prioritisation for 2020.”
PWA
Gartner has predicted that PWAs will replace 50% of mobile apps by 2020. And with the drive to streamline the customer experience, it’s no wonder why. With native apps, you have to go through the process of searching for an app, downloading it and setting it up—all before you can really start using it. With PWA, a customer just clicks one link and, hey presto, it’s ready to use. For businesses, this means just one product for their entire mobile presence, all under a single, unified experience. And it’s these lower barriers to entry which will drive forward the growth of PWA in 2020.
KEY TAKEAWAY: “PWA is new on the scene and isn’t completely fully fledged yet. For that reason, PWA might not be for everyone because it comes with some additional costs given how new it is. And though there are huge potential benefits, there are specific areas where it might not be the preferred strategy. It depends on your future requirements and aims, and whether or not PWA will actually help to drive these.”
Visualisation through AR
Over recent years, augmented reality has been somewhat of a buzzword in the eCommerce arena. But the technology is now well and truly coming to fruition. The power of AR is in its ability to blend the physical and digital worlds. As a result, businesses can (to some extent) replicate the in-store experience digitally.
Examples that are already seeing huge results include Warby Parker’s “virtual try-on feature” for glasses, and IKEA’s Place app, which allows you to see how items of furniture will look like in your home by placing their 3D versions over your phone’s live view. Whether it’s apparel, beauty or home furnishings, the potential impact of AR on eCommerce is huge. And that’s because eCommerce return rates almost triple that of brick and mortar stores. In the US alone, $369 billion in sales were lost to returns last year. But with the growth in AR and customers’ ability to visualise products, we might well see this return rate dropping in eCommerce.
KEY TAKEAWAY: “With the development of phones and hardware, AR is becoming more accessible both for developers and companies. But I still don’t see it hitting in a big way for another 2 years. AR is something to keep a close eye on and to learn from, but don’t prioritise it as an investment for 2020.”
Chatbots
Chatbots represent part of the wider wave of automation that is currently sweeping through the business community. And by 2025, the size of the chatbot market is forecast to reach around 1.25 billion U.S. dollars—worth only 190.8 million U.S. dollars in 2016.
Chatbots help with delivery tracking, returns management, general FAQs and much more, allowing your employees to contribute more to other areas of the business. But it’s not only customer service that chatbots can assist with. Through the incorporation of AI-based technologies, chatbots go far beyond this—helping with cross and up-selling, product recommendations and lead generation to name a few. With customer expectations and impatience growing by the second, chatbot technology is expected to make a splash in 2020.
KEY TAKEAWAY: “Chatbots are now widely accessible for anyone looking to automate. With so many platforms to get started, the threshold is not as high as it used to be. But before jumping in head-first, remember that chatbots won’t simply replace your whole customer service—they should complement your existing structures. Chatbots work well for simpler, first line support at an acceptable smaller investment and are something to put in your plan for next year.”
Personalisation
You can’t go very far without hearing about personalisation, but it’s for good reason. As just discussed, customer expectations have exploded and will only continue to rise in 2020. Due to advances in technology, customers have the ability to access everything they need at the swipe of an iPhone screen. And this near-instant accessibility has set the bar extremely high.
Key to delivering the type of experiences that customers want to interact with is eCommerce personalisation. Personalising the on-site experience is a sure-fire way to the heart of the demanding modern-day shopper. Providing customers with information directly related to them increases engagement.
In 2020, we’ll see even more of a focus on personalising the customer journey in its entirety—at every single touchpoint—not just the odd email here or there.
KEY TAKEAWAY: ”Many merchants now have some sort of single channel personalisation tool. But the biggest challenge we see is in taking the next step to omnichannel personalisation—a consolidated view of user behaviour across any and all channels. It’s having this truly holistic view of the customer journey that will reap the biggest rewards. To learn more about taking this step, see our Five Levels of Omnichannel Personalisation framework.”
Security
Not a day goes by that the media isn’t reporting on some form of cyber attack or online security breach. And research is pointing to a recent explosion in denial-of-service (DoS) attacks which can wreak havoc on your online store.
A Cisco report found a growing trend in DoS attacks which are forecast to rise from 10.3 million (2019) to 14.5 million in 2022. While research from Kaspersky noted that the number of DoS attacks during the first three months of 2019 increased by 84%, compared to the previous quarter. With cyber attackers forever finding new and inventive ways to breach IT infrastructure, the issue of cyber security is more prominent than ever. Learn more about eCommerce security in this Core of Commerce podcast episode.
KEY TAKEAWAY: “It can be tempting to think it might never happen to you, but the effects of an attack on your store could be disastrous. Data breaches, lost productivity, theft of intellectual property and irreversible reputational harm are just some of the effects attacks can have. So if you’re not yet taking online security seriously then you should be—this an overriding priority for 2020 and beyond.”
Thanks for joining me in breaking down some of the key trends for 2020. Another year brings a whole new set of challenges and opportunities for merchants, and at Vaimo we’re looking forward to helping businesses navigate new technologies to grow their digital capabilities and online sales.
If you’d like to discuss your 2020 strategy and eCommerce requirements, then don’t hesitate to reach out to our team. Here’s to a great year ahead!
