E-commerce

What will shape the e-commerce industry in 2020?

By January 28, 2020September 3rd, 2020No Comments

2019 was in many ways a revolutionary year for e-commerce, where online sales kept rising. But what will shape the e-commerce industry in 2020? We have looked into the crystal ball and will give you our five upcoming trends.

#1 Personalization of experience and product

Compared to traditional retail in physical stores, online stores are lacking personal interaction with consumers. Web stores do not have a retailer who can recommend products based on your interests, taste, and preferences. To simulate this experience, e-commerce companies are leveraging personalization opportunities throughout the purchase journey. Using personal online data, such as search queries, page visits, and purchase history, omnichannel retailers get their online stores to meet customer needs and interests.

Studies are showing that 48% of consumers are willing to buy more if their experience is personalized. It also shows that 74% of online consumers get frustrated if the content they are introduced to on a web store is not relevant to them. Personalization reaches new heights with products that are completely customized to the individual. Many web stores benefit from interactive content – such as quizzes and surveys – to build fully customized products that meet the individual’s needs or preferences.

Gainful Health, an American company, produces protein powder and creates customized products based on the individual’s health needs and goals, which can be accessed through an online quiz the consumer is taking. Another example is Function of Beauty. The company produces hair products that the consumer is designing with the company by choosing their hair type, scalp, color and scents of the products.

#2 More focus on the environment and sustainability

These days, most consumers are far more aware of environmental impact, and they want to support companies that are doing their best to reduce carbon footprint. According to a 2017 survey by Cone Communications, 87% are more likely to buy a product from a brand that is interested in social or environmental issues and are willing to pay more for sustainable products.

Digital gift-wrapping

The possibility of getting day-to-day or same-day deliveries is about to become an expected service for online customers. This is challenging web stores on logistics and sustainability. The good news is, that there are inventive and scalable ways to address this problem. As the owner of a web store, you can offer digital gift-wrapping. The concept is particularly suitable for consumers who are ordering presents, and involves dividing delivery of the product into a digital experience and the physical delivery of the product itself.

The customer orders a product with digital gift-wrapping in the shape of an experience, that is immediately sent to the recipient, that unpacks it digitally. This enables the retailer to ship the physical product more sustainably, leading to less CO2 emissions and less waste, but in return takes a few days extra.

The opportunity to send and pack digital gifts right away can make the customer more willing to accept that the delivery of the physical item takes a little longer. At the same time, digital gift-wrapping can help reduce the need for expensive and environmentally harmful physical gift-wrapping.

#3 Shopping and comparing items through Google

Unless your brand is very well known, most of your customers would probably enter your web store via organic or paid searches for items your store is offering. So to get your products out to more customers, we recommend optimizing for Google Shopping. This is a very powerful sales channel – and can boost the SEO for your web store. Integrating your web store with Google Shopping will create a PLA (Product Listing Ad) that automatically gets to the top of the ‘Shopping’ tab when a customer searches for a product that matches your store. This can be especially interesting for web stores selling niche products.

#4 Social Commerce – shopping through social media

Social Commerce, a term for making purchases through social media platforms, has grown significantly in popularity over the past few years. 55% of online shoppers have purchased a product directly through an online advertisement on social media, with Instagram and Facebook being the most widely used platforms. Many social media platforms make it easy and accessible for e-commerce stores to sell directly through social media sites with built-in integrated links. Customers click on specific products in a post and are directed directly to a product page, making it easier to make impulse purchases through online advertising.

So if you are considering selling on social media, it is important to investigate:

  • Where your customers are most active
  • When they are most likely to make a purchase
  • How to use the platform’s features
  • Invest in tools and technology that will allow you to better interact with your audience on these platforms.

#5 Subscription-based services

A sure trend in 2020 is that demand for subscription-based services will increase, which is both making sense to the company and the consumer. Subscription-based services provide a regular delivery and an “always as expected” experience with the consumer. Depending on the service provided, the value to the customer comes in the form of personalization, comfort, and financial savings.

An example is Dollar Shave Club, a subscription-based company that sells men’s razors. The company personalizes their products by letting the consumer put together the total package they subscribe to, with the ability to continuously change and customize their subscription and products. Companies that can continuously deliver the same value to the consumer will, of course, reap enormous benefits. Operating a subscription-based service can save you time, money, and other resources in various ways:

  • More reliable forecasts that lead to better inventory management – which can be further optimized with Mixed Reality and RFID
  • Repeated and scheduled purchases allow for streamlined transactions
  • Focus on retaining high-value customers, rather than a lot of one-purchase customers
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