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The evolution of eCommerce is transpiring before our very eyes. Positioning ourselves to ride the wave is part of a successful plan.
During times of uncertainty, we make tough decisions based on scarcity. That’s why we need reliable information so that we can make sound choices. Clear information gives us a better idea of what we can accomplish and helps us nudge ourselves toward a commitment.
This article will observe the evolution of the eCommerce industry from the pandemic to the present day. We’ll also look at market projections for a glimpse at the future of eCommerce. Finally, we’ll discuss the most popular market trends which will allow us to take advantage of today’s best eCommerce strategies. After reading this article you should have a clear idea of how to succeed in a new eCommerce venture.
eCommerce Industry Statistics and Projections
Since we encountered the black swan event of 2019 the way we look at eCommerce has changed entirely. There was an explosion of online shoppers due to lockdown measures. This a trend that many thought spelled the future of global retail, with many predicting that more than 90% of all sales would be online eventually. The merits of eCommerce were made clear for both shoppers and merchants alike. One sought the convenience of online shopping while the other saw it as a hedge against risk.
Even before the pandemic came around, we noticed substantial growth in eCommerce The heaving, bulging consumption machine is relentlessly growing and evolving in sophistication. The merits were true even before the lockdown came about, but weren’t really brought into focus until that point.
Roughly 20% of global retail sales are generated through eCommerce
Total Global Retail Sales reached an astounding $27 Trillion in 2022, and of these global figures some 20% is estimated to be generated through eCommerce. It’s obvious that consumer demand is the driving force behind all change in our modern world. Consumers are growing more comfortable with eCommerce for its convenience and accessibility. Markets anticipate further growth to 24% of all retail sales being online by 2026. In the USA alone 16.4% of retail sales are expected to occur online.
There are estimated to be 12-24 million eCommerce stores globally
These figures may seem daunting, less than 1 million of these stores earn north of $1,000 a month. And while the figures also seem rather imprecise, there are clear indicators of growth in the industry. We notice a greater emphasis on “how” we market our business nowadays.
Global eCommerce sales are projected to reach $7.4 trillion by 2025
Current eCommerce sales are around $5.7 trillion and are expected to grow by some 50% over the course of the next few years. The consumer is the main driving force behind this growth. Some analysts boldly state that as high as 95% of all retail sales in 2040 will be generated through eCommerce. Imagine if all these deliveries were made by electric vehicles. These figures could be justified by either the overall growth of global retail or the proportion of those sales through eCommerce, regardless, this is a very telling figure. For many businesses eCommerce is the best and newest upgrade to their core business model.
The consumer base expanded to 2.14 billion people in 2021
It was expected that some 2.14 billion people would be shopping online in 2021. A figure that reaches as high as a quarter of the global population. The targetable customer base, suggests massive potential. Figures further suggest that the average shopper completes 19 transactions per year, and somewhere around 93.5% of all internet users have made a purchase online.
Pandemic and eCommerce
We have found that the effects of the pandemic have altered the way we look at the overall industry. What was once a luxury revealed three very important points:
- The merits of eCommerce improve the overall shopping experience.
- eCommerce is a hedge against uncertainty in markets, which keeps businesses afloat in times of low in-store activity. While also having the additive benefit of a boost to revenue.
- eCommerce has a global reach and is highly scalable thanks to serverless technology.
- At the beginning of the pandemic, 30% of footwear sales were online. Still, the shutdown of physical stores increased online sales to almost two-thirds of footwear sales generated online in April.
- Digital restaurant orders increased by 138% in May 2020 compared to the previous year.
- Over 90% of shoppers reported that their online shopping frequency increased due to the COVID-19 pandemic.
Shopify eCommerce Figures
Shopify is a well-recognized name in eCommerce, and for those unfamiliar, they are a complete eCommerce solution. They are effectively a platform that will build a complete online store for your business. Amongst the top competing e-commerce platforms and store builders, Shopify stands out as one of the most dynamic solutions. Their main proponents include the high degree of control over branding and personalization of your website. Since Shopify was one of the first complete e-commerce solutions in the world, they’re also the most advanced. Their abundant resources ensure that all merchants have limitless options, with thousands of apps and other features available. They take all the technical work out of the equation and make all the capital investment irrelevant.
While major companies list items on centralized sites like Amazon or Rakuten, Shopify differs by building a dedicated website to use at your discretion. There is no greater freedom than having your own controllable piece of real estate on the world wide web.
Here are some core stats on Shopify’s Global Presence:
- Shopify alone has contributed to $319 Billion in global economic activity
- Around 1.75 million stores trust Shopify for their services
- 457 million people bought from Shopify stores in 2020 alone
- 2.1 million people browse Shopify stores on a daily basis
Most important eCommerce Trends in 2023
While the prominence of eCommerce is growing and the industry is blooming with opportunities, there is no ignoring competition. We need to understand how to connect to our customers effectively as it becomes harder to compete. The best way to understand where and how we can do this is by observing modern trends.
1. Social Proof
In 2021 99% of shoppers read reviews before committing to a purchase. This clearly underlines the importance of independent reviews. Social proof is the reason why your customers read product reviews before making a purchase. It’s a universal behavior that stretches beyond even the internet, as much as 92% of 18-34 year-olds seek advice from acquaintances before making a purchase. For all merchants big and small, your first priority should be to establish trust and that’s exactly why Social Proof tops our trend list.
Opinions matter in 2023, so it makes sense that influencers would be a top priority for eCommerce businesses. Shoppers are actively looking for the most bang for their buck, and often experts and influencers are the ones they seek for advice. Having a trusted professional advocate for your product is the closest thing we can come to assurance. Not only will it give your business some authority, but it’s also a great tool for reaching out to new audiences. Most influencers have established viewer lists and a reputation that reflects positively on your business. SEO is another factor web factor that may be positively affected by Influencer promotion, which could be a sustainable long-term solution.
3. Mobile Optimization
Mobile phones have reached a level of sophistication that gives users an equivalent experience on the internet as any consumer computer. Smartphones are arguably the most abundant personal devices all over the world. Mobile traffic now accounts for 79% of traffic and 69% of orders on the internet, surpassing personal computers. These ”substantial” figures suggest we take affirmative action to support mobile shopping. So to make sure you don't fall behind, put in some time and effort to ensure that your store is mobile-friendly. If your resources permit it, mobile apps appear to be the preferred shopping method as a long-term option.
4. Generational Shoppers
The internet is an integral part of our world and our children are growing up around computers and smartphones. For younger generations, the internet is a source of limitless information and inspiration. It just so happens that Gen Z is maturing just around the time when eCommerce is undergoing a major transformation. As their wages and purchasing power increase, we will inevitably see markets draw their attention to the most active and influential user group. We are already seeing generational thinking transpire with as many as 40% of all consumers belonging to Gen Z.
5. Financing and Payment Options
If a customer has reached the payment section, we've successfully guided them to the finish line. The last thing we want is for them to backtrack just before completing the transaction. While it's evident what the most requested payment methods are, the situation can quickly become complex with numerous options. This extends beyond just the payment method, it includes the possibility of an instant financing option or a micro-installment loan. While these choices may not be universal, there's a strong preference for buy now pay later. Surveys indicate that 40% of people are more likely to make a purchase when offered such a financing option.
6. Social Causes and Green Products
Representation and social causes are more important than ever. Environmental sustainability is a perfect example of a social cause that’s becoming increasingly important to customers. Every year more and more people are prepared to pay extra money for products that are responsibly sourced. When asked, 87% of people replied that they would buy a product with a social and environmental benefit if given the opportunity and 92% will be more likely to trust a company that supports social or environmental issues. We all know a company or two that promotes these values and it just feels like a win-win.
7. Customer Retention Strategies
Our understanding of eCommerce has changed drastically over the course of the last decade. The whole industry has come to an agreement that ad spending and other paid marketing channels are expensive and often unsustainable solutions. The two most popular ad platforms; Facebook and Google are thought to be luxuries for many businesses. Decision makers are looking at long-term solutions as alternatives and the most direct solution is customer retention. By retention we mean, measures to capture customer credentials and communicate with them after our first encounter; attempting to cultivate a relationship. The figures below demonstrate a stark contrast between acquisition and retention.
- “Repeat customers generate 300% more revenue than first-time shoppers”
- “While repeat shoppers only make up 21% of most brands’ total customer base, they make up 44% of overall revenue.”
- “Top online stores lead in customer experience (CX) 80% of the time"
- “The cost of acquiring a customer is 60% higher than 5 years ago”
- “In the spring of 2022, the average Shopify customer’s revenue per shopper was $90”
8. Customer Service
In an effort to improve the customer experience, businesses are making a push for advanced customer service. It is believed that satisfaction, retention, and conversions are all linked to customer service. Customer service is a top trend this year because it is an opportunity to demonstrate your values, to impress customers and to assure them that they are making the right choice. Customer service is about value, while it isn't a direct conversion tool, it can pay dividends in the future. There is nothing more important to potential customers then a quick resolution to their questions.
9. Artificial Intelligence and Personalization
There is a lot of buzz around Artificial Intelligence nowadays, and it isn’t clear yet how to best utilize its yet. The most obvious use in eCommerce has to be Personalization, which will allow each customer to receive a personalized shopping experience with refined recommendations suited to their preferences. It is no longer possible to get by making just any random recommendation, or generalizing your marketing to an obscure demographic. We are now expected to appeal directly to customers with specific recommendations and intentional marketing. It’s all about communicating for conversion which is best done by personalizing the message. It was found that 9 out of 10 surveyed customers found personalized marketing more appealing, and 8 out of 10 of those people acknowledge that they would prefer to shop with a brand that offers a personalized experience. Artificial intelligence is the quickest and most effective way to build customer profiles for a truly dedicated shopping experience.
The old days of multi-channel marketing are over. We are now expected to have a multiple-integrated conversion method in place. Not only that, we need to build seamless connections between our businesses. The idea is to provide customers with several options to complete their purchases, providing what is widely considered the most advanced shopping experience. The golden standard is omnichannel. Customers will use your alternative channels to verify your businesses, and based on what they find make their choice. Not only does omnichannel bolster our reach, but it also assures the customer that your business is true to your claim.
It seems like eCommerce is unavoidable, and most people will agree that it’s an overall improvement in our shopping experience. With all the merits listed above, surely it’s worth the effort for businesses to take on the challenge. With so many amazing examples and a history of success, it’s curious how the world of eCommerce will unfold in the next few years.