The e-commerce world has always been competitive, but the last year we can see it rapidly increasing with new e-commerce sites launching every day. In order to stay ahead of the competition, e-commerce trends need to be constantly monitored and addressed. By reacting to trends, you can drive your e-commerce brand forward, and stay one step ahead of your competitors.
Chapter 1: The e-commerce industry is growing
Chapter 2: Covid-19 continues to affect the e-commerce industry
Chapter 3: Future growth for e-commerce (2021-2025)
Chapter 4: AI and Personalization is the future
Chapter 5: Social commerce is growing
Chapter 6: Video marketing importance for e-commerce
Chapter 7: Mobile shopping is increasing
There has been a major change in the e-commerce industry in the last year, and more will come.
In this chapter, we’ll take a closer look at the current growth of the e-commerce industry.
Unfortunately, it’s not possible to talk about the growth of e-commerce without mentioning the corona pandemic. In many countries, e-commerce growth has been extremely rapid and developed at a pace we have never seen before.
In 2020, more than 2 billion people purchased services or goods online, and the e-commerce retail sales exceeded 4.2 trillion U.S. dollars, worldwide.
Social distancing and urges not to go shopping in physical stores have led to an increasing number of older generations starting to shop online.
The online sales in the age group 60-79 is the one that has increased the most during the year, primarily online pharmacy shopping. In December, 40,7% stated that they bought pharmacy products online, this is an increase of more than 15% compared to January.
If the elderly’s online shopping continues on this trend as during the pandemic, there is reason to believe that e-commerce and e-commerce merchandising will be a very important part of the pharmaceuticals industry growth in the future.
It may be the pandemic that has caused e-commerce to grow as much as it actually has done, but the fact is that e-commerce is here to stay. Even when the pandemic is over.
Consumers have been comfortable shopping online and everything that comes with it.
Penetration rates are expected to increase from 15% to 25% by 2025, this is a 67% increase in five years.
No previous occurrence has caused e-commerce growth as strongly as the Corona crisis.
Online shopping became the safer option for shopping, and in some cases, the only option.
According to a report on e-commerce in Europe by Postnord, 62% of consumers shop online more now than before the pandemic. The online shopping trend isn’t going away in the near future, on the contrary, it is here to stay.
Percentage of respondents who shopped online more often due to the Coronavirus pandemic:
Data from Google shows that, 81% of consumers in surveyed countries across the globe say they’ve discovered new brands online during COVID-19.
In the U.S. alone, Mastercard reports that more money was spent online during April and May 2020 than the last 12 Cyber Mondays combined.
An e-commerce market that has grown a lot and increased online sales during the years is food and beverage. Lockdowns and urging to stay indoors have more or less forced people to find new ways to perform their everyday chores.
The highest increase has been in the countries that have been hardest hit by the pandemic.
Percentage of shoppers who bought groceries online during the pandemic, who did not do so previously:
68% of the new online grocery shoppers say they will continue to shop groceries online in the future.
Before the pandemic, 7% of grocery shopping took place online. Today, just over a year later, that figure is up to 9%. This is one of the biggest growth ever that the online grocery sector experienced.
Mastercard predicts that this will continue to increase and that after the pandemic, 10% of consumers will choose online grocery shopping. They also expect that 70%-80% of the pandemics online grocery spike will be permanent.
As we mentioned before, online sales of groceries have increased. There are some different e-commerce categories that have grown a lot during the past year. People spend more time at home now, compared to before the pandemic. With that said, there are many who want to have it nice at home and that’s one reason why the sales of furniture, home decoration, and DIY have increased so much during the past year.
As a result of the pandemic, the growth of e-commerce is a fact. Many consumers have shifted to online shopping instead of shopping in physical stores. According to Forbes, this has resulted in over 15.500 stores being closed in the US, which is a huge increase compared to previous years. Which in turn has resulted in many stores trying to offset their losses by increasing their digital presence and e-commerce.
Online shopping is one of the most popular online activities worldwide.
A lot has happened in the e-commerce industry over the last five years, and it will definitely happen a lot in the next five years as well.
The future purchase power is in the hands of the Millennials (born 1980-1994) and Generation Z (born 1995-2012). The both generation has become a massive commerce opportunity thanks to its high buying power, spending power and brand loyalty.
Some interesting statistic about Generation Z and their online shopping habits:
That customers have moved from the physical stores to e-commerce is nothing new, this is something that has developed rapidly in recent years, not least in 2020. E-commerce reached an all-time high of 16.4% of total global retail sales.
Apparel and footwear is expected to drive the greatest absolute value growth over the 2020-2025 period, closely followed by food and drinks
As e-commerce grows, so do the expectations and demands. To be able to develop and have the growth needed to run an e-commerce, you need to offer your customers the best possible customer experience. Make sure that your site is ready for anything to come.
Offering the best possible customer experience will be crucial to whether you and your e-commerce will perform in the future.
It’s important to have an easy way to deliver/return packages. If it is not simple enough, it will probably not result in a purchase in the first place.
By using Q-Commerce, the next generation of e-commerce, you can offer delivery within an hour.
Good customer service is no longer an asset to your e-commerce business, it’s a requirement, even more, when your business is online.
Make sure your customer service can handle all the questions about your products or services that your customers may have. Be available by phone and email every day.
The more payment options you offer, the more likely you are to appeal to a wider audience. The easier you make it for people to pay you, the more likely it is that you will have more money coming in.
AI, Machine Learning, and behavioural-driven algorithms empower online retailers to detect and react to consumer trends in real-time.
90% of leading marketers say personalization significantly contributes to business profitability.
In this chapter, we’ll take a look at the exciting future of e-commerce personalization
A good AI solution will improve your customer experience, help you lift conversion, revenue and profit significantly.
By using AI for e-commerce sites, online retailers can automate the workload and remove much of the manual heavy lifting. AI reacts faster than any human and can catch both micro and macro trends.
AI learns from visitors’ behaviour in real-time, anticipating their intent, and adapts the results to rank the most relevant products higher, maximising your sales.
Personalized site search presents the most relevant products to online shoppers.
AI-driven site search is a powerful component for any e-commerce site and can contribute to increased revenue, conversion, and profits.
By using AI and machine learning for different aspects of the search functionality you can also greatly improve the shopping experience.
As the user starts typing in the search box, AI instantly suggests the fastest route to the intended product by making the most relevant suggestions of products, categories, and content.
Enable customers to easily find more content such as store locations, delivery information, care instructions, and brand information. It simply adds depth to the search result.
What ‘sandals’ means to one person means ‘flip-flops’ to another. Synonyms advise customers and ensure that future searches are more relevant.
Take advantage of your long-tail as relevant products will be displayed to users whilst typing, enabling them to instantly find matches. On the search results page, you can expose other query-relevant results using a plethora of different recommendation algorithms.
Site search optimised for e-commerce
Boost revenue, conversions and profit with Voyado.
Site navigation helps users to sort and narrow down the products to those that match their needs. It enables them to investigate several choices and return without affecting previously selected refinements.
Facets and facet values dynamically adapt their order as results are refined. When browsing further, they narrow down the product list to find more relevant matches. Facets can be any attribute, i.e., size, colour, category, brand, to name a few.
Categories help users get an overview of what your site is offering. To avoid overdoing it, categories should be mutually exclusive where possible. Categories can be ordered by name, the number of products in the category, or by relevance.
Breadcrumbs are secondary navigation that helps users keep track of where they are on the site. It is recommended to have breadcrumbs on both category pages as well as product detail pages.
Product recommendations make online shoppers more likely to complete their purchase and contribute to cross-sell and up-sell. Products are suggested based on the collective interest as well as the unique visitor’s history.
Utilizing machine learning and AI is great to ensure that relevant products are recommended, and increasing the average basket size, leading to higher conversion and increased sales.
These recommendations display real-time popular and trending products. They are suitable on the start page to welcome visitors, on category pages to show popular products for the specific category.
Recommendations based on the customer are site-wide personalized recommendations based on individual behaviour such as products the visitor has seen or bought. You can use them on the start page to make the visitor feel more “at home”.
There is a golden opportunity to recommend products based on the items in a visitor’s cart. These product recommendations are used for both cross-sell and up-sell and to push the order value above a certain limit by recommending products that will pass the threshold value.
These are customer-based recommendations of products from the customer’s abandoned cart. The system remembers the visitor’s previous intentions and gives these products a new chance.
Recently viewed products are another type of customer-based recommendation that works as a reminder of previously viewed items and allow the customer to return to products after viewing similar ones.
Inspiration from people with similar tastes is one of the main drivers for purchases. Recommendations based on those who also bought can be used on product detail pages.
A customer adding an item to their favourite list says a lot! Take advantage of this information and give your customers personalized product recommendations based on their favourites.
Make use of your customers’ behaviour on your site to send them more relevant email product recommendations that can lift your conversion rate, CTR, and revenue.
Spur further engagement by adding a block of attractive recommendations in your ‘order confirmation’ and ‘abandoned basket’ emails.
What are the benefits of using social media for business?
In this chapter, we dive into social media and how social commerce works.
Combining e-commerce with social media is very powerful. It enables consumers to explore and find products that they usually are not looking for on an e-commerce site. 60% of consumers use social media to research new products and services.
Currently, social apps that allow social commerce are, among others, Instagram, Facebook, Pinterest and TikTok.
They make it possible for customers to see a product on the app, hit the “buy now” button, and then complete the purchase right there, still in the app. Pinterest doesn’t work exactly the same way, where the customers are redirected to an e-commerce site, and can therefore not complete the purchase in the app.
Instagram:
Facebook:
Pinterest:
TikTok:
It’s a fact, consumer habits have shifted to social media. Generation Z (born 1995-2012) are more or less born with a phone in hand and have a completely different approach to social media and digitisation in general, compared to previous generations.
Social commerce is expected to account för 4.3% of all retail e-commerce sales in the US in 2021, according to Business Insider. Emarketer forecasts that social commerce will rise by $34.8% billion to $36.09 billion in 2021.
Today, the category that remains the largest for social commerce is fashion categories including apparel and accessories. Electronics and home decor are also key players for social commerce growth.
In other words, social commerce is here to stay, and it will be very powerful in the future.
See how other businesses have grown – Learn more about Voyado customers.
In the past few years, a lot has happened in content marketing, and video content is more important than ever.
A survey showed that 86% of businesses used video as a marketing tool in 2021.
In this chapter, we’ll take a look at current and future video trends in e-commerce.
Over 2 billion logged-in users visit YouTube each month, and every day people watch over a billion hours of video and generate billions of views.
Research by Wyzowl shows that 86% of businesses use video as a marketing tool. This was 85% in 2020, 87% in 2019, 81% in 2018, 63% in 2017 and 61% in 2016.
The research also shows that:
Product close-up videos zoom in on your product and display specific features viewers may not see in pictures, or demonstrate a function that has to be observed very closely, or simply show off your product from multiple angles.
This type of video gives the customer a more in-depth overview of the product.
The customer can learn more about the features and benefits of your product. Usually, this type of video features someone demonstrating the product and explaining why you should consider buying it.
Customer Testimonials videos feature past or current customers sharing their positive experiences with your brand, product, or service.
Testimonial Videos are powerful tools, especially when it comes to persuading prospects about the value of your brand. They can help you increase trust in your brand, humanize your business, and increase the likelihood of customers buying your product.
Unboxing videos show the unpacking of products, especially high tech consumer products, where the process is captured on video and uploaded to the Internet. The item is then also explained in detail and can sometimes be demonstrated as well.
The growth of e-commerce has been a major factor contributing to the rise of unboxing videos. Direct-to-consumer companies needed a way to better connect with their customers emotionally and create a positive buying experience.
This has led to many D2C companies investing in packaging design to serve as a marketing asset for their products.
The more engaging and cool the packaging is, the more likely consumers will record unboxing videos of their product and ultimately drive more buyers to the company.
A product tutorial or product demo showcases how to utilize your company’s assets. Video subjects can be services, digital solutions, etc.
Some of the benefits of using these types of videos are:
If you need to describe something complex about your product or service, an explainer video is a great choice.
By using them you can:
In these videos, a person explains your product or service. The person can appear in the video, as a narrator offscreen or a combination of both.
Animated videos are a popular choice for explainer videos. They are a great choice for companies that don’t offer physical products or services that could be featured in a non-animated video. They also allow for a bit more creativity and are easier to update and maintain than non-animated.
This type of video features a whiteboard with animated drawings explaining the product or service. They have become popular since they are quite easy to create and for their low cost.
As mentioned above there are several different types of videos that could be used in social media video marketing e.g:
Videos are great for social media since they create more engagement than text and photos.
Social media video showing the results for Voyado customer Dustin
According to Animoto, 93% of brands got a new customer because of a video on social media and 91% of marketers are satisfied with the ROI of video marketing on social media.
It’s predicted that, by the end of 2021, mobile devices will make up almost 73% of the total e-commerce sales globally.
So, one thing is for sure, your e-commerce site must be working for smartphones and have a mobile-friendly layout.
Over the past years, mobile apps have been increasing in popularity, and have given great results. Companies with a mobile app have a big advantage compared to companies that don’t have an app.
Mobile apps convert 157% more than a mobile web session. If you don’t have an app, it’s extremely important that your website is optimized for mobile devices alongside laptops.
Even mobile wallets like Apple Pay, Android Pay, or PayPal have increased. This is a safe way for consumers to checkout when shopping from a mobile retail app.
A mobile wallet is a type of virtual wallet that stores credit card numbers and debit card numbers. It’s accessible through an app installed on a mobile device. Mobile wallets allow users to make in-store payments without having to carry a physical wallet or to make online purchases safe, and simple.
Mobile is the most common platform to start searching on, this is also where the customer journey begins in many cases.
According to Simicart:
By 2020, Augmented Reality is expected to generate $120 billion in revenue.
27% of the global online population is using voice search on mobile.
Chatbots can reduce customer service costs by 30%.
In this chapter, we take a look at three technologies that are on the rise in e-commerce.
With the help of interactive visual design such as Virtual Reality (VR), Augmented Reality (AR), and 3D imagery, the customer can get a better sensory experience and a better understanding of what to expect with their product while shopping online.
According to marxent labs, By 2020, AR is expected to generate $120 billion in revenue.
They also report that:
Product types that U.S internet users want to shop using AR:
One area that benefits of using Augmented Reality in e-commerce are for items where aesthetics or other physical traits, such as size, are primary factors driving the purchase decision for the customer.
Several online retailers are using augmented reality to improve the shopping experience for their customers. Here are some examples:
Voice commerce or voice shopping is a type of commerce in which the customers interact with a brand and purchase products by using voice and speech recognition technology.
There is a difference between voice and speech recognition. Speech recognition recognizes only the words and focuses on the translation of verbal to text while voice recognition is used to recognize and to identify an individual user’s voice.
Voice search technology enables customers to search a website for content or products more quickly than usual since they don’t have to type their queries by hand.
According to a report from Microsoft 72% of survey respondents reported using a voice assistant.
This is how they used it:
Voice shopping is growing among Internet users. 13% of U.S. Smart Speaker owners say that they were making purchases by voice at the end of 2017. That number is predicted to grow to 55% by 2022. While voice shopping is still in its early stages, this statistic shows us that it will become increasingly popular in the coming years.
By 2020, Three-quarters of all US households are expected to own at least one smart speaker.
Emarketer estimates that 128.0 million people in the US will use a voice assistant at least monthly in 2020, up 11.1% from 115.2 million in 2019. This represents 44.2% of internet users and 38.5% of the total population.
According to a report by Narvar, this is how shoppers use their voice before, during and after they make a purchase.
Research from Google shows that this is what voice-activated speaker owners would like to receive from brands:
Chatbots are a useful service for online shoppers. They can for example help to inform customers when products are out of stock and suggest alternatives. They can also be used to inform customers about delivery, order status or even suggest products based on what the customer is looking for.
Another benefit of using chatbots in e-commerce is the functionality to remind customers about their abandoned shopping carts. Some customers don’t abandon their carts on purpose but if that happens, a chatbot is a good way to inform them of their shopping cart status and help them complete the purchase.
68% of respondents are more likely to buy from a business that offers convenient communications.
According to IBM, chatbots can reduce customer service costs by 30%.
Research from Juniper, found that the retail sector might benefit most from chatbot technology, estimating that by 2023 over 70% of chatbots accessed will be retail-based. Juniper cited benefits such as cost savings, up-selling, marketing and cart recovery as major retailer chatbot ‘push’ factors.
See how other businesses have grown – Learn more about Voyado customers.
Customers are more aware and interested in what they are buying, and there has never been as much talk about the environment and sustainability as there is right now.
There is a high demand for fashion and many fashion e-commerce stores are growing. Make it easy for your customers to find which products are sustainably produced, by using a sustainability tag on the product page.
A good way to meet customers’ demand is to offer a second-hand service where you sell second-hand clothes. Offer an easy way to send in items that were previously purchased at your online store, and sell the clothes again, for a better price. Good for both the environment and customers’ wallets.
Everyone needs to take responsibility for creating more sustainable development in e-commerce.
Take your responsibility and use the earth’s resources responsibly. Offer your customers a sustainable delivery option by having sustainable transports.
Production and delivery are more important for consumers from a sustainability perspective. Many customers want better insight into the production chain. Offer your customers full traceability in the supply chain. Customers can then see where everything is manufactured, produced and where it comes from. This is in order to meet consumers’ demands and ever-increasing expectations.
Food and beverages/groceries are the product category that is considered most important to shop sustainably. Closely followed by clothes & shoes and beauty & health.
Plastic packaging belongs to the past, today, it needs to be recycled, compostable or plant-based packaging.
As e-commerce grows, the issue of sustainable deliveries and packaging has come into increasing focus. To work with sustainability is now a rule, rather than an exception. Packaging the products in recyclable materials has increased by eight percentage points between 2019 and 2020.
Less air provides more sustainable e-commerce. Packages purchased in e-commerce contain an average of 30% air. By packaging in smaller boxes, the climate impact is reduced and it’s cheaper to ship.
Summary:
We love all things customer and product data, and would love to chat about your brand’s individual challenges, and how our solutions can help.
