Ecommerce has matured in the last few years a lot. With the exponential growth of Mobile penetration globally, the ease of online shopping has helped the growth. According to a report by GSMA , By the end of 2018, 5.1 billion people around the world subscribed to mobile services, accounting for 67% of the global population. A total of 1 billion new subscribers have been added in the four years since 2013 (representing an average annual growth rate of 5%), but the speed of growth is slowing. An average annual growth rate of 1.9% between 2018 and 2025 will bring the total number of mobile subscribers to 5.8 billion (71% of the population).
This growth has added a direct impact on ecommerce growth globally. We saw Alibaba making $38 Billion in sales in just 24 hours during the single-day sale in November 2019. In the US, Black Friday online sales beat all previous records, reaching $7.4bn, up from $6.2bn on Black Friday 2018.
Cyber Monday 2019 was an even bigger day for online shopping than Black Friday, with sales totaling $9.2bn, up 16.9% from $7.9bn in 2018. Online shoppers spent an estimated $11 million per minute between 11 pm (E.T.) and midnight. According to Adobe, Cyber Monday is expected to become the first day when consumers spend more than $3 billion on their smartphones.
Digital commerce applications support B2B, B2C, business to business to consumer (B2B2C), consumer to consumer (C2C), and other kinds of transactions over the internet. According to IDC, the worldwide digital commerce applications market is forecasted to reach $6.1bn in 2022 at a CAGR of 14.7%. In 2017, it constituted of 10.2% of the total retail global, in 2018 -11.9% and in 2019 – 13.7%. In 2020, e-commerce is expected to constitute of 15.5% of the total retail global sales. Global e-commerce sales is expected to reach $4.9 trillion by 2021. It has been noted that 73% of customers use multiple channels while shopping online. The average percentage of consumers who made an overseas purchase continent wise are 63.4% Europe, 57.9% Asia Pacific, 55.5% Africa, 54.6% Latin America, etc. It is estimated that voice commerce will generate a revenue of ~$40bn in the U.S by 2020 (Source: CrispIdea Research).
- By 2020, AR is expected to grow to $120bn in revenue. The AR will take on ecommerce industry with its ability to personalize and enhance user’s buying experience online. In a study, it was shown that 22% of the customers would avoid traditional stores if AR would be available in online stores.
- Ecommerce in India is expected to rank first in terms of B2C development with a CAGR of 19.9%. It is due to the availability of cheaper smartphones and internet subscription plans.
- China’s ecommerce market value was estimated to be around $672mn making it the largest e-commerce market in the world.
- In 2018, the US ecommerce market in the world. commerce market share was $517bn from a total retail sales of $3638bn. Consumers spent ~$517.2bn with U.S merchants which was increased by 15% as compared to 2017 where the ecommerce market size was ~$449.88bn.
- 2018 was a great year for the e-commerce industry. The worldwide revenue of ecommerce amounted to almost $2,290bn. It can further grow up to an annual rate of almost 19.11%. This would result in a market volume of $4,479bn by the end of the year 2021. These numbers speak for themselves about the growth of global e-commerce.
Based on these facts and numbers, here are some of the trends that will shape up the ecommerce industry in 2020.
Retailers that have implemented personalization strategies see sales gains of 6-10%, a rate two to three times faster than other retailers, according to a report by Boston Consulting Group (BCG). Personalization is going to go to the next level with products that are entirely customized for the individual. Many online stores are taking advantage of interactive content – like quizzes and surveys – to build entirely customized products that cater to each individual’s needs or preferences. The platform like Adobe Experience Cloud is leading this space currently and will be the pioneer for this trend. Brand relevance can only emerge from customer personalization.
Augmented Reality, Virtual Reality
AR and VR are helping to solve this problem by allowing customers to virtually try on products without physically touching them. Companies like Warby Parker have launched an app that uses AR so customers can try on different glasses before ordering.
A BRP report indicated that 48% of consumers said that they’d be more likely to buy from a retailer that provided AR experiences. Unfortunately, only 15% of retailers currently put AR to use. Only a further 32% of retailers stated they plan to deploy virtual or augmented reality applications over the next three years.
Experts predict the AR/VR industry to reach more than $25B by 2025—and the growth will continue steadily. That’s the bright future of augmented reality, and it will be defined by the investments from the following business domains and spheres, which find its practical potential pretty enticing.
According to the Retail Perceptions survey, 71% of respondents would prefer a store supporting augmented reality. The AR development will supposedly increase eCommerce profits up to $ 120 million by 2020.
Social commerce—that is, the process of making purchases directly on social media platforms—has been steadily gaining ground over the past few years. This trend will absolutely continue onwards as we move into 2020. 55% of online shoppers making a purchase through a social media channel, such as Facebook, Instagram or Pinterest in 2018. Leading the charge in the Western eCommerce world are platforms like Instagram Shopping, as well as the newly-released Checkout on Instagram. WeChat is already doing this in China.
Artificial Intelligence-based Prediction
These improvements touch both on automation and saving time as well as making more money faster thanks to better decisions and a clearer path to success.
Many of the companies that are successfully implementing AI are using it to enhance their ecommerce engine and capability to generate revenue through sales and marketing. Some of the benefits of having AI in ecommerce are “Better product Enhancement, Optimizing processes, Identifying new markets, Automating workflows”.
27% of the global online population is using voice search on mobile. According to Comscore study, by the beginning of 2020, voice search will take up to 50% of search queries. If the search inquiry is a voice request, the top search results will be those websites with a voice control function. In 2017, Walmart streamlined thousands of products for its voice search on Google Express and Google Home App for their home delivery. Other companies like Amazon and Domino’s Pizza, as well as many B2B platforms, followed the same example. Although just 17% of internet users currently own a voice-controlled smart assistant, there’s also 34% who say they are interested in purchasing one.
Retailers such as Best Buy and 1-800-Flowers.com have created their own Alexa skills that allow customers to make orders via their Alexa-enabled voice assistants. Children’s clothing store Carter’s uses its skill to enhance the customer experience by answering questions, offering support, promoting daily deals, and sharing product information. To further encourage developers and companies to create their own skills, Amazon.com even offers an Alexa Skills Kit, a guide to designing, building and launching your own Alexa skill. With Google Shopping Actions, retailers can make their products available for purchase on the 1 billion Google Assistant-enabled devices in the world.
According to ARK’s research, with regulatory approval in the US, an Amazon drone could deliver a package today profitably for $0.90 in less than a half hour, cutting the cost of domestic shipping by roughly 90%. Given frictionless and inexpensive delivery, consumers would likely buy many more goods online. ARK illustrates that parcel drone delivery could boost ecommerce’s share of retail sales from 13% today to 75% by 2030. Without drones, ecommerce could settle at just over 50% of retail, as shown below.
The drone delivery concept is gaining steam, with companies in the space approaching last-mile delivery in two distinctly different ways – bulk transport of large payloads versus on-demand small payload deliveries – with each conducive to working in tailored markets. The idea is to utilize the low payload drones in an urban setting where there are retail stores like Walmart, Costco or Target around town, ensuring that the drones do not need to fly long distances to get people their orders.
These are some of my analysis and predictions to look for in 2020. Apart from this, I recommend you to see this report. Since 2015, Absolunet’s 10 eCommerce Trends report has predicted the following year’s eCommerce Trends with an impressive 87.5% accuracy rate.
I look forward to your views on the blog and any other trend that you feel we will see dominate the ecommerce industry in 2020.