We’ve come a long way since the first transaction took place over the internet in August 1994 (in case you’re wondering, the first item purchased was either a pizza from Pizza Hut or a copy of the Sting album “Ten Summoner’s Tales”).
In the 1990s, social media and smartphones didn’t exist. The majority of people in the developed world didn’t even have an internet connection until 2004.
Indeed, today’s ecommerce landscape would have been unimaginable a decade or two ago.
Trends That Reshaped the Ecommerce Industry in 2019
Even in the relatively short span of a single year, a lot can change in the ecommerce industry. These were the most significant trends last year.
1. Progressive Web Applications
The popularity of mobile devices has led to businesses making their sites responsive, which means they automatically adjust to the type of device that’s being used by the visitor. Many businesses launched their own native mobile apps as well, because at the time these could be made faster and more feature-rich than responsive websites.
The latest trend is a combination between responsive sites and native apps.
With recent advances in web coding languages, responsive sites can now be as fast as native apps and have native app-like features, such as push notifications, offline functionality and the ability to add a launch icon to the user’s home screen. These new and improved responsive websites are known as progressive web applications (PWAs).
One key advantage that PWAs hold over native apps is they don’t need to be downloaded from a distribution platform such as the Apple App Store or Google Play. They can be accessed by simply clicking a link or entering a URL into the address bar of a browser, just like any other website.
Put simply, PWAs offer better performance than a standard website and they’re more convenient than a native app; they’re the best of both worlds.
These benefits have led to Twitter, Starbucks and many other major companies launching their own PWAs. As for Shogun, we’ll be rolling out a new tool to help ecommerce brands build their own PWAs called Frontend in 2020.
2. Headless Commerce
The ecommerce industry gets more competitive with each passing year. There are currently over 5 million active ecommerce sites in the world, and that number is only growing.
You need high-quality, custom content to stand out from all the competition. But the ecommerce solution you use for backend functions, such as managing orders and shipments, might not give you many customization options for your content.
That’s where headless commerce comes in. This approach allows you to decouple your frontend (what the visitor interacts with when they go to your site) from your backend. You’ll have the flexibility to combine a powerful backend solution of your choice with a separate frontend solution that provides you with all the content management features you need.
Another advantage to headless commerce is you can make changes on the frontend without making reciprocal changes on the backend. Writers, graphic designers and frontend developers can work independently and quickly publish new content, while backend developers will have more time to focus on other tasks.
Writers and designers usually aren’t skilled developers, and developers usually aren’t skilled writers or designers. Headless commerce allows everyone to focus on what they do best.
Many of the top ecommerce platforms, such as BigCommerce and Magento, support a headless approach.
3. One-Page Checkout
It’s easy for people to get distracted on the internet. No matter what someone is doing online at any given time, they probably have a few other tabs open that are calling for their attention. And even if they’re able to ignore those, a push notification could pop up at any time and pull them away to something else.
This is why there should be as few steps as possible between adding an item to the cart and completing an order on your store. Otherwise, you risk would-be customers getting distracted and leaving your site before completing their purchase. This happens quite often — carts are abandoned before purchase nearly 70% of the time.
Many checkout processes force visitors to jump through hoops and enter their contact information on one page, their shipping information on another page, and then their billing information on yet another page. With a one-page checkout, visitors can go through all these steps without leaving the page. This may only save a small amount of time, but it can have a huge effect on your conversion rate.
One-page checkout is becoming very popular across the ecommerce industry. BigCommerce has gone as far as to make it the default setting for all stores created on its platform.
4. Ecommerce Brands Expanding Into Brick and Mortar
The benefits of ecommerce for both customers and businesses are obvious. Customers get to shop from the comfort of their own couch instead of being forced to drag themselves to a store, and businesses are able to make sales without the overhead of maintaining physical storefronts.
But it’s not all positives when it comes to ecommerce vs. brick and mortar. In physical stores, customers get to evaluate products in person before they buy them (which results in a higher conversion rate), and businesses are able to make a more personal connection with their customers. In fact, these advantages are so significant that many brands that were once ecommerce-only are now opening their own brick-and-mortar storefronts.
This phenomenon is known as “clicks to bricks.” None other than Amazon has participated in the trend with its Amazon Books and Amazon Go stores. It must be noted that the Amazon Books subsidiary is especially ironic, considering how Amazon started as an online bookstore that was so successful it drove many brick-and-mortar bookstores out of business.
Other notable clicks-to-bricks retailers include e.l.f. Cosmetics, Glossier, Duluth Trading Company, Chubbies and Goop.
5. Dynamic Pricing
The concept of dynamic pricing is nothing new. This practice can be as simple as raising and lowering prices according to changing supply and demand. Restaurants use dynamic pricing whenever they offer “happy hour” deals to attract customers during the usually slow times of the day. Also, airlines have been raising their prices during the holidays and lowering them during less busy travel seasons since they came into existence.
But fixed pricing is generally the norm in physical stores. Price tags and stickers need to be replaced manually, which makes the prospect of constantly changing prices simply impractical.
Conversely, online stores can use algorithms to adjust prices automatically according to customer behavior, industry trends and competitors’ prices. By optimizing your prices, you’ll be able to stay competitive while still turning a healthy profit per sale.
6. Voice Commerce
The easier it is to buy from your store, the more revenue you’ll generate.
This is what makes voice assistants, such as Alexa and Siri, and smart speakers, such as Amazon Echo and Google Nest, a boon to online stores. Customers can make a purchase without a single keystroke; they just need to say what they want out loud.
According to Advantage Solutions’ “Emerging Channels: Voice Commerce” report, 31 million people were forecasted to use a smart speaker for online shopping in 2019, up nearly 32% from 2018. By 2021, this figure is expected to reach 38 million.
The fashion industry is particularly sensitive to trends, with different styles quickly becoming popular and then falling out of favor just as quickly. This led to the rise of “fast-fashion” companies like H&M that design and produce inexpensive clothing as fast as possible in order to stay on top of the latest trends while maintaining a profit.
Ecommerce has been a natural fit for fast-fashion. By removing physical storefronts from the equation, fast-fashion stores are able to get a new product from design to production to in-stock even faster.
The online fashion industry is experiencing strong growth as a whole. In 2022, online sales are expected to make up 38% of total fashion sales — this is up from 27% in 2018 and 14% in 2014. Considering recent news that the top online fast-fashion stores are investing heavily in their distribution networks and marketing strategies, you can expect fast-fashion to be responsible for much of that growth.
8. Social Commerce
Advertising on social media has been around as long as social media. It’s how sites like Facebook make their money.
Social media platforms have huge audiences, and traditionally businesses have placed ads on them in order to attract traffic to their own site. From there, the business can educate the visitor about its products and hopefully make a sale.
Social commerce is disrupting this system. There are now new ad formats that allow customers to learn more about your products and even make a purchase without going to your site. Everything they need is within the ad itself.
Instagram has become one of the leaders of social commerce with its Shoppable Posts, which allow sellers to tag products featured in images. Then, users can click on the tags to learn more or buy the product.
Pinterest has a similar feature, the Buyable Pin, that allows users to make purchases directly through the platform. On Facebook, businesses can create entire “Shop Now” stores, where sellers can upload their products, sell directly from their page, manage orders and review sales analytics.
Overall, there was an estimated $22 billion in U.S. social commerce sales in 2019. By 2024, this figure is projected to hit $84.2 billion.
9. Real-Time Chatbots, Shopping Assistants
Customers want an immediate response whenever they have a question, but new and small stores often don’t have the budget to hire customer service staff.
Automated chatbots (also known as virtual shopping assistants) provide an easy solution for such companies. They offer a much more affordable way to provide 24/7 support, which leads to higher rates of customer satisfaction and additional sales. Even larger companies that can afford customer service staff have shown an interest in chatbots, as they allow them to free up resources for other areas of their business.
With these benefits, you can expect many stores to start using chatbots, as well as other AI tools, in the coming years. According to IBM, AI adoption is projected to reach 80% in the retail and consumer products industries by 2021.
10. Direct to Consumer
The direct-to-consumer (D2C) ecommerce model involves shipping your products directly to customers, eliminating the need for middlemen, such as distributors or retail stores, and allowing you to maximize your profit.
There are other benefits to the D2C model as well. By interacting directly with customers, you can collect information about your audience firsthand. This is useful for everything from product design to marketing strategy to employee training.
D2C also gives you more control. Third-party retailers have many products other than yours that they need to promote. Instead of relying on others, handling promotion yourself ensures your products get the spotlight treatment they deserve.
The D2C model is becoming quite popular among consumers. Forty percent of Americans believe 40% or more of their purchases in the next five years will be from D2C companies.
11. Online Grocery Shopping
As mentioned above, Amazon got its start as an online book store. Founder Jeff Bezos isn’t particularly passionate about books, but he chose that product to focus on because they’re relatively easy to store and ship.
Groceries, of course, are much more difficult to store and ship. Even some dry goods can spoil quickly, and constant refrigeration is needed for meat, dairy and many other food products.
Extremely efficient distribution networks are necessary for online grocery delivery to work. It took a while for ecommerce to advance to the point where grocery delivery was feasible in most areas, but it now appears that we’ve turned that corner.
The CoreSight US Online Grocery Survey 2019 found that 36.8% of U.S. consumers had purchased groceries online in the past year. This is up from the 23.1% that reported doing so in the 2018 version of the survey, which works out to nearly 35 million more Americans ordering groceries online from 2018 to 2019.
One reason online grocery delivery is more popular is that it’s become more available. For example, Walmart now offers in-store grocery pickup at more than 2,100 stores and grocery delivery from over 1,600 locations.
Affordability is another factor driving online grocery shopping’s popularity. Walmart launched a service in 2019 called Delivery Unlimited that offers unlimited free grocery delivery for an annual fee of $98.
Amazon, of course, entered the online grocery game with its acquisition of Whole Foods in 2017. That gave the company 500 retail stores to fulfill grocery orders with. Amazon Prime members are also offered free grocery delivery.
But both Walmart and Amazon are dwarfed by Instacart, which controls 59% of the grocery delivery market. This service works with over 300 grocery chains, and Instacart is available to 80% of U.S. households.
12. Automated Lockers
One of the key benefits of online shopping is that it saves you from the trouble of having to wander through shelves and find the items you want yourself. Of course, with online shopping you also need to wait for the items to be shipped to you, whereas if you went to the store you could pick them up immediately.
Automated lockers have emerged as a solution for both of these problems. All the items in your order are conveniently gathered in one place, and you can retrieve them without having to wait in line for a cashier to ring them up.
This technology provides businesses with the most efficient way to offer a buy online, pickup in store (BOPIS) option to their customers. According to one study, automated lockers can save five minutes per order — that may not sound like a lot, but it adds up to significant savings over time.
Automated lockers also allow you to attract more Gen Z shoppers to your store. This young generation is just starting to join the workforce and earn disposable income, and 58% of them reported using BOPIS on a weekly basis.
As with many other trends, Amazon is at the forefront of automated lockers. There are Amazon lockers in apartment buildings, public transportation stations, Whole Foods stores and other convenient locations in over 900 cities.
While Amazon is at the forefront, the ecommerce giant is certainly not alone. Nike, Macy’s, Walmart and Costco are just a few of the other brands that now have automated lockers at many of their locations.
13. DIY Store Design
It’s impossible to overstate the importance of web design in ecommerce.
If the visitor can’t find what they’re looking for quickly, they’ll likely back out and find another option. And if your site looks outdated or just downright unattractive, it gives the impression that your business is unprofessional as a whole. After all, if you couldn’t manage to do a good job with the design of your site, why should the visitor trust you to do a good job with shipping, returns, etc.?
But hiring a designer for your online store can be expensive. Thankfully, there are now online tools that you can use to design your store yourself. Drag-and-drop page builders allow you to create custom landing pages, product pages and blog posts that look like they were produced by a professional.