What Lies Ahead For E-Commerce?
With its promise of comfort, convenience, and immediacy, online shopping has now become the preferred purchasing channel of the modern consumer. Today there are over 2 billion people who purchase goods and services in the digital space, bumping up global e-commerce sales to over $4 trillion.
As e-commerce continues to grow, various trends are emerging in the market, reshaping consumers’ spending habits as well as shopping expectations at warp speed. So what’s shaking up the digital space right now? Let’s find out!
A Growing Appetite for Mobile
Because of its convenience, ease of use, and enhanced security, more and more consumers are shifting to mobile for online transactions. In fact, mobile commerce is the main force behind the fast growth of e-commerce in recent years. More than a quarter of e-commerce sales comes from this channel. In 2020, sales from mobile commerce soared to $2.91 trillion and are expected to swell to $3.56 trillion this 2021.
According to experts, as consumers become increasingly reliant on their mobile devices, mobile commerce will likely dominate the world of retail within the next five years. And when it comes to preferred mobile channels, an interesting consumer shift is also underway.
The majority of today’s digital shoppers (85%) are now drawn to using mobile applications rather than mobile websites. This is because mobile applications offer more integrated payment processing and more optimized experiences compared to mobile websites or other shopping channels. As a result, the conversion rate is higher by 157% in mobile applications, making it the most suitable place for building digital storefronts.
Thus, many retail brands are now focused on optimizing their mobile performance (page speed, payment processing, etc.) and enhancing their mobile design to better cater to their customers’ changing needs.
A Switch to Digital Wallets
Mobile wallets are breaking into the mainstream and we’re all for it! Today’s consumers value flexibility and security, so it makes sense that mobile wallets are all the rage.
In fact, more than 75% of the American population prefer mobile wallets because they’re fast, safe, and reliable compared to credit cards and cash payments. Younger generations lead the pack of mobile wallet users with at least 63% of active customers coming from Gen Y and 38% from Gen X.
One of the reasons why digital buyers are drawn to mobile wallets is because of the wide selection of available payment options. There are over 20 cashless payment methods that customers can use when shopping online.
With over 440 million active users, Apple Pay is the top e-commerce payment provider in the United States, followed by PayPal, which boasts more than 300 million daily customers. Samsung Pay and Amazon Pay support over 50 million active daily users.
Certainly, integrating a variety of cashless payment methods can accelerate the online growth of e-commerce brands. And with an annual growth of 62%, it’s safe to say that mobile wallets are not only today’s latest fad but also the future of retail.
Voice Technology Invades The Market
Aside from the rise of mobile commerce, the emergence of voice-based solutions is also transforming the e-commerce landscape. Many consumers are using voice search technology to search for products on the internet. The appeal of voice search technology springs from its hands-free quality, which allows customers to run queries while performing other activities.
Beyond increasing productivity, consumers now use voice search technology to ensure their safety and protection. In fact, the demand for voice search technology has skyrocketed, particularly during the first quarter of the global health crisis. To reduce health risks and contain the spread of the virus, people were quick to transition to touchless technology. This drastically influenced consumers' lifestyle choices, not to mention their shopping habits.
Because of the growing demand for voice-based solutions, some e-commerce companies are even integrating voice technology into their online platforms. Voice biometrics is now being used as a verification tool in e-commerce to provide another layer of protection against cyberattacks. Since it helps automate processes, some companies are looking into voice technology to enhance the operational efficiencies of online businesses, particularly in the area of customer service.
E-Commerce Goes Social
Modern online shopping is not just limited to e-commerce platforms; it now extends to social media platforms as well.
With a market share of $89.4 billion, social commerce is now considered an indispensable component in the e-commerce landscape. By letting consumers make purchases within the social media realm, it’s deemed an effective tool in expanding the reach of e-commerce companies.
Reportedly, more than 43% of users rely on social media for discovering new products and services. That’s why many leading companies are integrating e-commerce features on social media, such as Facebook, Instagram, Pinterest, and Snapchat. It’s no surprise that big brands like Target, Kylie Cosmetics, and Patagonia are using social commerce tools in their digital operations.
Aside from expanding customer reach, using social commerce can help businesses greatly increase their conversion rates and revenue. Since social media can generate useful insights, e-commerce brands are able to create effective strategies to further boost conversions within the social media experience.
Ultimately, by adopting these newest market trends before others, businesses can gain an edge in this ultra-competitive industry.