The Ways Technology is Changing eCommerce
The Ways Technology is Changing eCommerce
Before we get into technology
and trends, let’s take a moment to put the eCommerce industry into perspective.
In 2017, retail eCommerce
sales worldwide reached $2.304 trillion, with China leading the way,
pulling in almost $900 billion from eCommerce alone. Bringing that closer to
home, Australians currently spend nearly $2 billion per month on online
shopping, and that figure is tipped to rise dramatically by 2020. Aside from consumer
demand, technology is playing a pivotal role in reshaping the eCommerce
landscape. According to recent studies, in 2015, less than 10% of consumers
used a smartphone to make an online purchase. Fast forward to 2017, and one in
five are now using their smartphones.
There’s no doubt that shifting
consumer patterns are driving huge change in eCommerce, but it’s technology
that’s underpinning the foundation of modern online retail. Here are four ways
technology is shaking up eCommerce:
1.
Social Commerce
Social media and eCommerce have
always had a natural synergy. Take a look through your Facebook feed, and
you’ll notice friends asking for and sharing product and service
recommendations. While shoppers aren’t explicitly using social platforms to
buy, they do play a pivotal role in their path to purchase. As technology fuels
new iterations of social commerce, the impact it’s having on the industry is
profound.
Pinduoduo, the latest app from China, is
an excellent example of how technology is closing the gap between social and
shopping. This shop-with-friends app allows shoppers to share deals across
their social networks and form groups to take advantage of discounts.
Harnessing a group mentality, the lure of this app is more than the low prices
– it’s the social proofing of products. The proof is in the numbers – Pinduoduo
was recently valued at $1.5B and is set to IPO.
Social commerce is fast gaining
headway with eCommerce platforms like Shopify. Offering a way to sell items on
your company Facebook page and Instagram’s
shoppable posts allows customers to purchase items with a
single click, without having to leave the Instagram app.
2.
Artificial Intelligence
A recent study by Gartner
predicts that by 2020, 85% of customer interactions will be managed using
Artificial Intelligence (AI). It’s safe to say that the way we engage with
customers is changing and it’s technology that’s driving this shift. Outside of
using AI to stimulate conversations, machine learning can be used in eCommerce
to analyse and predict sales patterns. This is already playing out on Netflix
where the platform will predict what viewers want to see before they know
themselves. From a CMO’s perspective, using AI to wade through mountains of
data to predict patterns can be a serious weapon for gaining a competitive edge.
3.
Supply Chain Efficiency
Today’s consumers have a
buy-now mentality which extends to frictionless service and speedy shipping.
Because retailers like ASOS have set the bar with free returns and fast
delivery, online retailers of all shapes and sizes need to tighten their supply
chain to stay in the game. With eCommerce tech-stacks getting more complicated,
the key to managing supply chain efficiency is through technology and
integrations.
From a customer perspective –
transparency is king. When a customer places an order, they expect to be able
to track their order status in
real time, from on-screen to on doorstep. From a business
perspective, having the technology in place to manage multi-carrier,
multi-warehouse, multi-store, multi-location or multi-user supply chain systems
is no longer a nice to have, but a necessity.
Cloud-based technology is helping
e-retailers, reduce shipping costs, simplify their logistics, analyse their
spend and seamlessly manage returns for both the customer and retailer.
4.
Seamless Payment Processing
Customer experience has become
a huge driving force in eCommerce, and the push towards seamless transactions
affects payment processing. With payment issues up there as one of the leading
causes of cart abandonment, online retailers are turning to technology to find
faster, smarter payment methods.
The last few years have seen
monumental shifts away from traditional payment methods like credit cards.
Instead, there’s been a widespread rollout of alternative
payment methods like Buy Now, Pay Later platforms, digital
currencies like Bitcoin and other contactless technologies.
5.
From Buying to Selling
Traditionally, the focus for
eCommerce has been on buyers for the simple reason that they create more demand
than sellers. A recent study
in the INFORMS journal Marketing Science paints a different
picture, stating that sellers are in fact 3.5 times more impactful than buyers
in driving the growth of eCommerce platforms.
From an eCommerce perspective,
we’re starting to see a shift in the way technology is being used to the
advantage of the seller. Platforms like Shopify and BigCommerce are leveraging
technology to give sellers greater transparency over how they run their
operations, marketing and logistics. With
APIs and integrations giving online store owners access to a range of platforms
and services, eCommerce is no longer a micro-management game – it’s now more a
case of plug-n-play.
The
Wrap Up
Technology is changing the
eCommerce game for both buyers and sellers. Customers have frictionless new
ways to shop, pay and interact with online retailers and retailers are seeing
the upside of predictive marketing and personalisation. As technology continues
to evolve, it will open up opportunities for the business and consumer.
Definition of 'Ipo'
ReplyDeleteDefinition: Initial public offering is the process by which a private company can go public by sale of its stocks to general public. It could be a new, young company or an old company which decides to be listed on an exchange and hence goes public.
Companies can raise equity capital with the help of an IPO by issuing new shares to the public or the existing shareholders can sell their shares to the public without raising any fresh capital.