E-Commerce Trends (Part 1) – These Developments Shape Your E-Com Strategies
Every year, new trends emerge in e-commerce. Whether it concerns adjusting inventory management due to supply shortages, dealing with AI, or shifting from omnichannel to multichannel – the e-commerce landscape is shaped by numerous developments that influence online sellers and provide new impulses. With the upcoming year-end, it is time to take a look at the trends to come. What developments should online sellers keep an eye on? First, we will focus on the most important changes in fundamental e-commerce strategies.
E-Commerce: The Status Quo
The statistics clearly indicate the developments in e-commerce: Between 2013 and 2018, the German Retail Association reported a growth of around 66 percent in B2C e-commerce. And in 2021, online retail already surpassed the €100 billion mark in Germany, according to data from IFH KÖLN. By 2025, IFH KÖLN predicts that one in five euros in retail will be generated online, forecasting a revenue of €139 billion for Germany in 2025. The global forecasts for e-commerce are even more impressive: a survey by Statista estimates the potential revenue for 2025 at €2.9 trillion – an increase of around 80 percent compared to 2021.
However, revenue growth is only one facet of developments in e-commerce. The question of the most important platforms in online retail is also crucial for success. Here, the significance of Amazon becomes quickly apparent. In the ranking of the 100 largest online shops in Germany, Amazon ranks first among the most important shopping platforms, according to data from the EHI Retail Institute. As a generalist, Amazon.de generated a net revenue of €15.86 billion in 2021. Additionally, when looking at the most popular product categories in e-commerce, clear trends in shopping preferences emerge. The highest-grossing product categories are attributed to the clothing segment (€19.3 billion in revenue in 2021) as well as electronics and telecommunications (€16.44 billion in revenue in 2021). The clothing segment alone accounts for nearly a quarter of the total revenue in B2C e-commerce.
However, the status quo provides online sellers with only a partial view of developments. They should not only focus on revenue forecasts, key shopping platforms, and popular product categories. For successful businesses today, it is also important to provide an excellent customer experience for their customers.
E-Commerce Strategies – The Future Focuses on Customer Experience
We have compiled three e-commerce strategies for the upcoming year that contribute to enhancing the customer experience. For online sellers, omnichannel and D2C (direct-to-consumer) will play a significant role in the coming year. The right payment mix is increasingly becoming a key success factor, and last but not least, the future of e-commerce will be shaped by mobile devices.
1. The Shift to Multi- and Omnichannel is Increasing, D2C is Gaining Momentum
Customers today are rarely only browsing the online shop of a seller when searching for a product. Instead, they gather information about offers on various shopping platforms – primarily on online marketplaces like Amazon, but also on OTTO or Kaufland. Sellers can choose between two strategies for marketplaces: multichannel commerce or omnichannel commerce.
The difference between the two lies in the integration of the sales channels. In multichannel commerce, products are offered on different marketplaces and in the seller’s own online shop, but there is no integration between the various channels. In omnichannel commerce, it is different. Here, all channels interact with each other. Additionally, sellers often integrate brick-and-mortar retail alongside online commerce if they operate physical stores.
All of this is nothing new for many sellers. Nevertheless, the shift towards multichannel and even more towards omnichannel commerce is one of the most important e-commerce trends of recent years. Why? Because customer expectations are rising. They expect integrated sales channels and a variety of potential sales locations in both online and brick-and-mortar retail. Therefore, for the coming year, sellers should continue to expand their sales channels.
Additionally, the topic of D2C commerce is gaining momentum, as Timo Weltner, founder and CEO of NETFORMIC, emphasizes: “The elimination of the ‘traditional’ retailer is picking up speed. The topic of D2C, not in the sense of new brands, but in the sense that even established manufacturers are increasingly approaching customers directly, is becoming more significant. As a trading organization, I must increasingly question my own value creation. Essentially, the only options left are to turn to service providers, marketplaces, or private labels, or even a mixed model, but a classic trading model will no longer exist in a few years.” Instead of selling products to customers through intermediaries, the focus here is on direct contact between manufacturers and customers. This also presents new challenges for online presence.
“The elimination of the ‘traditional’ retailer is gaining new momentum. The topic of D2C, not in the sense of new brands, but in the sense that even established manufacturers are increasingly approaching customers directly, is becoming more significant. As a trading organization, I must increasingly question my own value creation. Essentially, the only options left are to turn to service providers, marketplaces, or private labels, or even a mixed model, but a classic trading model will no longer exist in a few years.”
Timo Weltner, Founder and CEO of NETFORMIC
2. Service through Flexible Payment
The way customers can pay in the online shop has a significant impact on the conversion rate. Various studies, such as the ECC Payment Study Vol. 25, have confirmed this multiple times. In the ECC Payment Study Vol. 25, about one-third of consumers stated that they would abandon their purchase in the online shop if the top three payment methods – invoice purchase, PayPal, and direct debit – were not offered.
It is important to note that preferred payment methods are highly dependent on the target audience. If sellers want to optimize the offerings for their online shop, they should integrate not only the general top methods but also the payment options popular among their target audience. This trend towards a wide range of payment options is not new, but it remains one of the most relevant.
3. Mobile First – Desktop Comes Second
The e-commerce trend towards mobile shopping is unbroken and will continue to gain importance. Already in 2021, 57 percent of online purchases were made via smartphone; an additional 29 percent were made via tablet. This share is likely to have increased further in 2022. The largest target group for mobile commerce is Generation Z. They have grown up with smartphones and prefer to make their purchases using them. In the age group between 16 and 29 years, which includes part of Generation Z, the smartphone usage for online shopping is at 80 percent. Additionally, Generation Y also represents an important target group in mobile commerce. Among those aged 30 to 49, which includes Generation Y, smartphone usage is similarly high at 77 percent.
What does this mean for sellers? Primarily, it means optimizing the online shop for mobile devices, if this has not already been done. The trend towards mobile commerce is increasing – and not just due to generational factors, but also in general. E-commerce companies that do not want to lose conversions due to a lack of user experience in mobile commerce should also evaluate new services and needs of their target audiences when it comes to mobile online shopping and continuously adapt their shop accordingly.
4. Social Commerce
Every year, the topic of social commerce gains importance. Especially TikTok and Instagram are popular platforms for online sellers to engage potential customers. The advantage is that a large budget is not necessarily required for reach on social media. In the past, it was a valid criticism that a good social media channel significantly improves brand image but does not generate direct sales, as social media seemed too untrustworthy for many people to actually share their bank details there.
Looking at today’s e-commerce trends, it is clear that this argument no longer holds. In fact, half of all social media users (47%) now make purchases on these platforms, and 42% are willing to share their credit card information there or at least use this information on these platforms.
5. Augmented Reality (AR)
Augmented Reality – the embedding of virtual products into the real world using a smartphone or PC camera – offers online sellers various opportunities to make their products more “tangible” for potential customers.
There are already several pioneers in this area who have successfully implemented the concept. A prominent example is IKEA, whose app has allowed customers to use AR for years to visualize, for instance, a new sofa in their own living room.
Another example is Watchbox. The watch retailer uses AR to give customers the opportunity to virtually try on different sizes of watches. This way, they can select the perfect watch and ensure that it looks good on their own wrist.
In the realm of online retail, AR is particularly popular in the fashion industry, as customers can virtually try on clothing and check the fit and appearance of an item before purchasing. Fashion retailer Asos, for example, uses simulated models on its website that users can dress with AR. This allows customers to see how garments look on different body types.
6. Videos
A closer look at the e-commerce trends of recent years reveals that the use of product videos by sellers has significantly increased. Whether on their own online shop, on platforms like Amazon, or as video ads on social media – presenting products in moving images has become a crucial sales factor. This is mainly because products are sold more often when customers have the opportunity to see them in action. Buyers gain a better understanding of how a product works and its benefits through these videos, which ultimately leads to increased willingness to purchase. In today’s digital landscape, integrating high-quality product videos has therefore become an indispensable strategy for sellers to stand out from the competition and enhance the customer experience.
Conclusion: E-Commerce Strategies Must Ensure Flexibility
When looking at current e-commerce trends in the area of strategies, flexibility will be more important than ever in the coming year. This applies both to sales channels and to payment options. Customers want the ability to choose the platform through which they shop, whether it be an online shop, an online marketplace, a company app, or, in the case of hybrid sellers, even the physical store.
Customers also expect a wide range of payment options that are continually adapted to current needs and technological capabilities. Last but not least, in e-commerce strategies and payment in online retail, the principle of mobile first applies. By considering these three aspects in their strategies, sellers are already positioning themselves well for the future.
Social commerce, augmented reality (AR), and the use of videos also play a crucial role. Social commerce is on the rise on platforms like TikTok and Instagram, as sellers can engage potential customers without needing to invest a large budget. In the past, social media was considered too untrustworthy for direct purchases, but today, many users are already shopping directly through these channels.
AR provides online sellers today with the opportunity to make their products experiential. It is particularly popular in the fashion industry, as customers can virtually try on clothing to check the fit and appearance.
Additionally, the importance of product videos has significantly increased. Sellers are increasingly relying on moving images to give customers the opportunity to see products in action. This enhances understanding of the goods and increases the willingness to purchase.
Overall, all of these e-commerce trends are essential for sellers to remain competitive and optimize the customer experience.
Image credit: © Dilok – stock.adobe.com
