With the help of the Internet, e-commerce has evolved from an emerging trend to a powerful force in today’s world. Now that it’s become easier to offer products online, businesses around the world can offer their products and services to customers, wherever they are. That also means there’s more competition than ever.
From AI-driven customer service to automated marketing campaigns, digital commerce is no longer just about selling products and services online. It’s about understanding consumer behavior in order to deliver an experience that customers expect and need.
This article will explore the rich history of digital commerce, its current state, and the emerging trends set to define its future. Plus, we’ll highlight some of the tools that can help you stay ahead of the competition when selling online.
- Digital commerce has grown exponentially since the 1990s due to increased internet access, secure online payments, and the rise of digital marketplaces. COVID-19 accelerated the adoption of digital commerce.
- Mobile commerce now accounts for 60% of digital commerce sales globally. Brands optimize sites for mobile and use apps to provide smooth user experiences.
- Personalization through AI and omnichannel retailing help replicate brick-and-mortar experiences in digital commerce. Chatbots and tailored recommendations increase engagement.
- Emerging trends like augmented reality, cryptocurrency payments, and voice-enabled shopping will redefine the future of digital commerce. Businesses should invest now in data-driven insights and infrastructure.
History and Evolution of Digital Commerce
The concept of commerce has been around for as long as modern civilization itself and is what some might argue a big reason why humans have come so far, so fast. Exchanging goods and services for money or other goods and services builds economies and keeps the wheels of progress turning.
Historically, commerce has occurred through face-to-face interactions in physical spaces like markets or stores. This is known as traditional commerce, and for many centuries it was how most people shopped for what they needed.
While traditional brick-and-mortar commerce remains prevalent, there has never been greater demand to sell and buy through digital channels.
Digital commerce occurs online and operates on websites or mobile applications that allow businesses to sell their goods and services to customers. It’s more convenient for customers since they can shop from anywhere, and it eliminates many operational costs associated with traditional commerce like rent and staffing costs.
Since its early dayse in the mid-1990s, e-commerce has grown exponentially in both popularity and scale. Companies like Amazon pioneered the space by establishing what would become the world’s first completely digital marketplaces and setting standards for others to follow through the coming decades. To date, success has been defined by a variety of factors such as convenience, selection, cost savings, and customer service.
Several trends have taken hold of e-commerce over the years, but one of the most dominant ones to remain is the emergence of digital marketplaces like Amazon, eBay, Etsy, Shopify, etc. These platforms allow businesses to list their products quickly and take advantage of the network effects of a large platform. They also offer convenience to customers, who can shop from multiple stores in one place and compare prices quickly.
Redundant efforts have been reduced, as well. For instance, businesses no longer need to maintain their own physical stores and staff. Instead, they can focus on optimizing digital storefronts for customers’ convenience while leveraging third-party services to manage shipping and warehousing.
A Look at the Current State of Digital Commerce
COVID-19 had a massive influence on the e-commerce space – one that many experts believe changed its trajectory for good. March 2020 saw the implementation of unprecedented public safety lockdowns that shuttered shopping malls and department stores for months. E-commerce was suddenly the only means people had of purchasing goods across the world, driving an explosion in online sales of $244.2 billion, or a 43% increase compared to the year prior.
Even as businesses have reopened, capacity limits, stocking woes, and fluid operating hours have led many to favor online over in-person shopping. Data from NielsenIQ shows that just over two-thirds (67%) of consumers now shop differently compared to the way they did before the pandemic.
It’s led to a growing interest in one-day shipping, free returns, and buy now pay later solutions – all of which companies like Amazon, SHEIN, and Walmart have leveraged in an effort to capitalize upon changing consumer habits. Today, the global e-commerce market sits at an estimated value of $6.3 trillion and accounts for roughly 21.2% of all retail sales.
COVID-19 is just one of many factors behind why e-commerce is where it is today. Online shopping was certainly popular before the pandemic – lockdowns simply forced people to adopt it faster. Apart from deadly viruses, emerging technology has played a pivotal role in driving the growth of e-commerce.
The internet has become more accessible, secure, and reliable over time – allowing for a smoother user experience when shopping online. The rise of social media platforms like Instagram has also made it easier to connect with customers, providing brands and retailers with more opportunities to drive sales.
Emerging Trends In Digital Commerce
With new technology comes changes in the ways people go about their daily lives. E-commerce was a big shift of the status quo in and of itself and now there are several emerging trends that are pushing the boundaries further.
Mobile commerce, sometimes referred to as m-commerce for short, is a subcategory of e-commerce. It too involves the sale of goods online – only specifically through devices like smartphones and tablets. This differentiation is important as mobile devices’ smaller screens and touch-based interfaces can influence individuals’ shopping experiences and purchase behaviors.
The popularity of m-commerce has grown in tandem with smartphone usage. According to a Statista report, mobile device-based purchases now make up 60 percent of all e-commerce sales around the globe. That’s up significantly from just a few years ago when they represented 56 percent of online transactions.
The rapid growth of m-commerce has made it increasingly important for businesses to have mobile-friendly websites that are optimized for the devices used by their customers. Many companies are now investing in mobile-centric strategies such as responsive web design, which enables a single website to adapt its layout and content based on the size of any device’s screen.
Mobile shopping apps are an even better strategy for brands looking to make m-commerce a breeze for their customers. Apps can be designed specifically with user experience in mind, providing a smooth and convenient way for people to find what they’re looking for and complete transactions from the palm of their hand.
Personalization and AI
With transactions having moved online, personalized customer experiences are more relevant than ever. People are very used to the level of one-on-one attention they typically get when shopping at a brick-and-mortar store. While e-commerce is intended to be a self-service, seamless solution, there will always be questions, concerns, and hesitations throughout the buyer’s journey. Moreover, it should go without saying that in-store sales strategies play a big role in driving businesses’ revenue – just think about how many times an employee has convinced you to walk out the door with something you don’t really need.
In the age of digital shopping, brands know they must find a way to replicate the personalized experiences customers typically get in-store to maintain the same level of business. Artificial Intelligence (AI) can be a big help with this. AI technology, such as chatbots and natural language processing (NLP), can provide an interactive tool to customers while they shop, helping them find what they need quickly and efficiently. Additionally, data collected from these customer interactions can inform marketing strategies and help brands better understand customer behavior.
AI can also be used to power automated marketing campaigns, allowing businesses to tailor messages and offers directly to the customer’s interests. For example, you’ve probably seen personalized coupons or recommendations based on your shopping history. This type of marketing has become more popular as it allows businesses to reach customers with the right message at the right time, increasing engagement and loyalty in ways that non-digital strategies struggle to match.
The popularization of ChatGPT made a big impact on how aware people are of the capabilities of AI. It’s now not only a helpful tool with the ability to assist with marketing endeavors, but a way for organizations to significantly overhaul customer experiences and streamline a wide range of processes.
Omnichannel retailing refers to a type of business strategy that’s focused on engaging customers through multiple means. It leverages the integrated use of both digital and real-world touchpoints to connect with potential buyers everywhere they are – whether that’s on social media, company websites, physical stores, or public events. The goal of omnichannel retailing is similar to that of traditional, single-channel marketing strategies, which is reaching customers with the right message at the right place and time in order to drive sales. It differs in that it takes a holistic view of the customer journey, from initial discovery to final purchase.
The benefits of an omnichannel approach are manifold. First and foremost, it helps companies create better customer experiences by providing a consistent level of service across different touchpoints. Not everyone spends the same amount of time in different channels, so having an integrated approach allows brands to cater to each customer’s preferences and needs.
Another benefit of omnichannel retailing is increased visibility. By leveraging multiple avenues for reaching customers – such as social media, email campaigns, and targeted ads – brands can expand their reach to potential customers beyond their usual channels. This helps them build relationships with a larger audience, as well as capture data about customer behavior that can be used for deeper insight into what resonates with shoppers.
Omnichannel Strategies Are Only Becoming More Popular
Omnichannel retail marketing is becoming less of an optional strategy and more of a fundamental practice for businesses as consumers’ focus spreads thinly different devices and means of engaging. Most prominent retailers have already adopted an omnichannel approach to their operations, with Apple being just one example. Its online presence, stores, commercials, and billboards all represent different angles of the same company.
Regardless of how much society evolves, humans are and will always be social creatures by nature. We’re easily influenced by one another’s thoughts and opinions on everything. Adding technology to the mix amplifies this phenomenon as it allows people to interact with others on a greater and more comprehensive scale.
It’s no wonder why social media is such a popular platform today. From Facebook to Instagram, virtually everyone is influenced by the content they see on their feeds. Taking this one step further, brands are now using the engaging nature of social apps to reach customers and market their goods or services.
This is known as social commerce – the process of using social media platforms to facilitate transactions. It’s an incredibly powerful tool that has allowed businesses to increase their sales and reach potential customers in a more effective way. For example, brands now have the ability to directly engage with their customer base by integrating messaging using features such as chatbots, live chat, and interactive quizzes.
Social commerce is also often seen in the form of sponsored posts, influencers, and ads that are strategically placed based on what users have shown interest in or are likely to be interested in. This allows companies to reach a highly targeted audience with tailored messaging and content, making it much more effective.
Social Commerce is Here to Stay
The popularity of social commerce is only growing, with more brands opting to use this method each day. It’s a great way for businesses to boost their sales and engage customers in an interactive manner, and new feature releases from Instagram, Facebook, and Pinterest have only made it easier for everyday people to feel confident about using these apps for purchases.
Future Predictions in Digital Commerce
While the trends in e-commerce that we’re seeing today are big, they only represent the tip of the iceberg in terms of where the space is projected to go in the coming years. As technology continues to develop, the way we do business and interact with brands will evolve – leading to more convenience for customers and larger profits for businesses.
Using Augmented Reality for An Enhanced Buyer Experience
Augmented Reality (AR) is just one of the many possibilities that e-commerce could explore in the future. AR-enabled websites provide customers with an immersive shopping experience that empowers them to virtually try on clothing items or explore product features without ever leaving their houses. This could be a boon for both retailers and shoppers, as it eliminates the hassle of returning items that don’t fit or weren’t what the customer had in mind. It could also help reduce total costs associated with returns and exchanges, allowing businesses to offer more competitive prices without sacrificing profits.
Introducing Cryptocurrency as a Method of Payment
Cryptocurrency is also expected to impact online shopping in a big way. It’s being considered as an alternative payment method to credit cards and debit cards for multiple reasons, prime among them being security and anonymity. The blockchain technology that powers cryptocurrencies is safe and secure, allowing buyers to remain anonymous when making online purchases, while also providing a layer of protection from fraud.
Expanding Voice-Enabled Shopping
Voice-enabled online shopping doesn’t require people to use a screen at all – instead, customers can use their voice to complete the entire purchase journey. It might start with “Hey Alexa, what t-shirts does Amazon have in stock?” and end with “Place my order”.
Voice-enabled online shopping is especially useful for customers who have limited screen time due to disabilities, health conditions, or mobility issues. It’s also great for those on the go who don’t have the opportunity to take out their laptop or mobile device.
Preparing for the Future of Digital Commerce
The features, capabilities, and experiences that come with the rapid evolution of digital commerce will be game-changing for consumers and businesses alike. Every day people will see their lives made easier in a variety of ways, while more traditional staples of retail shopping may become obsolete. Businesses have just as much to look forward to, however must be prepared to evolve with the changing landscape in order to survive.
To stay ahead of the competition, businesses must be proactive in their approach and implement strategies that will help them capitalize on the opportunities presented by digital commerce. This includes investing in technology and infrastructure, creating experiences that are optimized for mobile devices, and leveraging data to gain insights that can be used to inform decisions on an ongoing basis.
Proactivity will be a defining characteristic among those who emerge as leaders in the digital commerce space. It’s essential to begin building a foundation for success now, rather than waiting until it’s too late. Tangibly speaking, this could involve investing in areas such as AI-driven personalization, software that allows for the creation of custom experiences, and digital marketing campaigns that target customers both online and off.
It’s no longer a question of if, but when companies invest in the technology to enable more efficient personalization. As e-commerce continues to evolve, the most competitive organizations will be able to meet their customers with equally great service across every channel, and they’ll be able to make relevant, context-based recommendations to guide customers through the process. Above all, the most seamless experience is likely going to be the one to win, as customers’ need for speed and convenience accelerate.