What will Shape the Future of E-Commerce?

The e-commerce industry is highly dynamic. The only constant variable so far has been its deep root in “convenience.” However, even that seems to be changing as well. As we enter a phase of touchless technology, things are becoming more about impact than convenience. The transformation in the outcome indicates that the industry has undergone a series of changes over the last 10 years. The fact of the statement lies within the number of small businesses getting online.

So much so for the present.

But, what would e-commerce look like in the future, say 10 years from now?

The Competition of the Future

If we hadn’t been caught off-guard by the pandemic, the industry might have developed slowly. Incidentally, the lockdown and stay-at-home contributed to the spike in the electronic trading.

Traditional marketplaces were shut down, so retailers switched to online trading and kept their customers engaged. Top players like Amazon and Walmart have created their place, forcing small-time businesses to catch up. Every online store reworked its delivery mechanisms, increased flexibility for payment, and tried to connect with its customers over mobile-friendly applications for a virtual trading experience. This brought in more than 1.3 million e-commerce companies in the US alone. This surge has paved the way to reshape the business model of the future. Businesses that never thought of going online have redrawn their operations to accommodate online as another channel.

According to Ecommercedb.com, B2C revenue in the US alone is set to grow by $8.65 trillion in the upcoming decade. Such increasing numbers of businesses and their benefits are sure to invite investors. Inevitably, angel investors and venture capitalists will fund a broader section of entrepreneurs and startups in return for good ROI. 

Since there are so many entrants in the market, competition is an obvious thing. As the number of providers is growing faster than buyers, the competition is intense already. Grand View Research suggests there will be exceptionally tremendous growth in B2B e-commerce market size by USD 7.72 trillion. Taking into account the future of B2B, the research shows an estimated growth rate of CAGR 18.7% by 2028, indicating increasing competition every day. 

Business is moving away from targeting a mass in general to focusing on a niche segment. In turn, this will influence manufacturing, distribution, and marketing. In the future, besides customized product designs for smaller-sized market segments, we may notice optimized marketing and distribution efforts, delivering an outstanding customer experience.

More online shops indicate fiercer competition. At times such competition resorts to taking up unethical measures. In such a scenario, monitoring fair play becomes highly critical. Hence, you can assume, the future will assign a set of responsibilities to the competition commission. In tandem, although the big ones like Amazon, Walmart, and eBay will dominate the market, they will still have to operate as per the regulations set by the commission. In brief, we are looking forward to a segment where the big and the small both are enforced to do fair business, with the only thing in mind, customer experience.

As simple as it can be, online stores are open to all. Besides the domestic market, it attracts individuals from international shores. In the upcoming years, we will see an increase in cross-border selling where e-tailers will ship their products internationally through their diversified supply chains. In addition, industry standards of delivery will improve based on the convenience of a consumer. Hence, the actions and mechanisms of the tradesman will play a vital role in defining the consumer of tomorrow.

The Wave of Technology

Technology is the reason why e-commerce exists. From clicking on the hyperlink to payment gateway checkout, purchasing, trading, and selling are made convenient and directional by advanced technology. It’s no wonder that the future of this industry depends on how smart the tech gets.

Interestingly the story has started to get woven today. As we walk towards the new decade, many sellers have started using basic AI like chatbots, voice assistance, and search. The future is looking forward to seeing more such developments. A significant portion of investments in e-commerce ventures will get directed towards information transfer, logistics, and AI-powered online networking. Hence, the upcoming decade will undoubtedly have a “smart” ecosystem resting on AI.

As the tech becomes “smarter,” the border between online and offline becomes blurrier with every passing day. With the best of both worlds, phygital-commerce brings e-commerce and the physical presence of a store together. It gives consumers an in-store experience without losing out on the digital interface. The shop owner can display in-store products onto their online shops enabling online ordering, only to be picked up from the store nearby. While you are reading about it, consumers are already making purchases from Amazon Go.

Up to now, phygital store owners have provided a complete 360-degree purchase experience. The presence of these stores has reportedly increased sales as it offers a personalized experience through seamless technology. Besides personalized experience, phygital commerce serves as a potent option to push suggestive purchases.

When we speak about e-commerce and its next-gen vision, advertising and digital media cannot be ignored. Nearly 85% of brands and retail stores will have their presence on social media as a medium for online merchandising.

Case in point, Instagram has recently launched its ‘shoppable post’ feature. This feature allows businesses and brands to enable product tags and promote them widely.

In parallel, efforts in the space of customized marketing are already making advanced progress. At present, the marketing gurus are questioning how to achieve Marketing 1? Armed with tools to craft communications, gather data points, and analyze information, the present-day marketers are busy defining plans for one-to-one marketing.

Getting into the exercise now justifies all the hustle, as it directly connects with customization of product designs and optimization of the distribution network we mentioned earlier.

Looking into the Future

E-tailers know the importance of providing quality service and generating profits. As a result, they remain motivated throughout the entire business cycle. With an eye on the niche market, services will be made more personalized by every brand. Rising competitors are a tough challenge as there are multiple suppliers ready to fulfill a single demand.

Possibly by 2030, scenarios will change, and so will our analysis. A few of what I mentioned may get totally replaced with new variables tuned to shape the future. Irrespective of what the changes happen, we are sure of one thing that will continue to underpin the growth and development of the industry – truly understanding what a customer needs.

I believe with all the tools and technologies, that is one human aspect we should never lose to maintaining our focus.