The millennials and Gen Xers are the most extensive online shoppers, spending 50% more time online than the older generations. They make up the most significant online shoppers, with 67% choosing online shopping over traditional retail. By 2022, this trend is expected to continue.
Personalized experiences increase the likelihood of repeat purchases and boost customer retention. Customized experiences are becoming a more critical metric as tech giants make it harder to target the right audiences. Achieving personalization can be started with small efforts, such as displaying personalized product recommendations. Eventually, more advanced personalization solutions will be needed to meet the demands of consumers.
According to McKinsey’s “Next in Personalization” report, US companies could generate $1 trillion in value by stepping up personalization efforts. In addition to personalization, brands are adopting hybrid experiences, which blend digital and physical experiences. For example, the car rental company Carvana recently opened physical locations to let consumers pick up their cars. Additionally, recommendation engines analyze user data and offer highly targeted recommendations. As of 2018, the recommendation engine market was worth $1 billion.
The next big eCommerce personalization trend is image recognition technology. This technology helps identify products in images and videos. This data can then be used to refine product recommendations and customize content. This can happen as a “shop the look” recommendation on a retailer’s website or a personalized email notifying a customer of items they’ll love. The idea is to personalize the shopping experience for every individual.
Personalized experiences can improve customer satisfaction and improve profits. It’s also vital to track consumer behavior. For example, customers may purchase an identical item twice to return it. This data can be used to improve customer satisfaction and drive more sales. If you can optimize the shopping experience for each customer, you will be able to increase your sales by as much as 73%.
Personalized experiences are expected to be the norm in the eCommerce market by 2022. Increasingly, brands are turning to first-party data to create personalized experiences. These data are collected directly from consumers with their consent. Using this information, 42% of brands plan to offer personalized product recommendations by 2022. This type of personalization can be delivered through custom mobile apps or quizzes. Further, 44% of brands are committed to being more transparent about their data usage.
As personalized experiences continue to rise in popularity, retailers should adopt these technologies and create an integrated customer experience. A company can know its customer better at every touchpoint by using connected systems across all channels, including in-store, social media, and distribution.
Growth of mobile commerce
The growth of mobile commerce is a significant trend, changing how brick-and-mortar businesses do business. However, many consumers are still wary about purchasing over their mobile devices. The security of online purchases through mobile wallets is not the same as when using a traditional credit card. There are numerous issues to consider when making purchases with a mobile wallet. This makes it essential to secure the transaction before submitting the information to the merchant.
The growth of mobile commerce has been accelerating over the last few years, and its future is bright. According to one recent report, mobile marketing will account for 55% of all eCommerce sales by 2021. The trend is expected to continue in the years to come as more shops are accepting mobile payments.
As smartphones become increasingly common, the number of mobile users continues to grow. It is estimated that mobile users will spend 234 minutes daily using their mobile devices. This is a substantial increase compared to consumers’ 188 minutes per day in 2016. 79% of smartphone users made purchases through their mobile devices in the last six months. That is a significant number, which indicates that this technology is here to stay.
The growth of mobile commerce has many implications for the eCommerce market. For one thing, mobile wallets will likely become consumers’ preferred payment method in the coming years. Furthermore, mobile payment options will be extended to wearable devices. In addition, merchants need to provide a seamless shopping experience on all devices.
Shortly, m-commerce sales will increase by nearly half a trillion dollars. By 2020, m-commerce will account for almost twenty percent of eCommerce sales. As such, the growth of mobile commerce will outpace the development of mobile websites.
In addition to the growth in mobile device users, eCommerce businesses should invest in mobile-optimized websites and dedicated mobile apps. Mobile devices are becoming the primary way consumers shop online, with the growth of smartphones expected to reach a total of 6.2 billion people worldwide.
Regional variations in eCommerce
The eCommerce market size in a region differs from the average for the area. In some parts, eCommerce’s adoption rate is slower than in others. These regional differences may be due to factors such as the mobility of consumers and the lack of digital maturity. For example, a low level of e-commerce usage in some regions is associated with a lower percentage of online sales in a given country. Other areas are more likely to experience growth in eCommerce due to a higher share of spending online.
North America, Europe, and Latin America expect steady growth in the coming years. Consumers in these regions are generally more willing to try out foreign brands and are aware of environmental and overconsumption. However, they are also more particular about the composition and price of the products they buy. In addition, the Middle East and Africa are expected to witness significant growth in the coming years due to their large young population and the rapidly changing online shopping landscape.
While a low percentage of consumers in China is still above the predicted share, it is not likely to reach that level until 2022. For example, eCommerce growth in the US is forecast to reach $875 billion in 2022. Meanwhile, the eCommerce market will account for 824.5 million digital consumers, or 38.5% of global eCommerce sales in China. The third-largest e-commerce market in the world is the United Kingdom, with a share of 4.8%.
In the Asia-Pacific region, eCommerce spending will exceed the combined growth of the rest of the world. With smartphone penetration and a rapidly developing middle class, the area is poised to experience growth in the eCommerce sector. The region is home to several large eCommerce sites, including Thailand, Indonesia, and Vietnam. The part is a critical market for small businesses.
Regional eCommerce initiatives have become increasingly important as more countries move towards digital commerce. Regional trade agreements are essential for defining and implementing digital commerce norms and policies. More than half of WTO members have incorporated digital commerce provisions in their RTAs. The Digital Economy Partnership Agreement (DEPA), signed by Chile, New Zealand, and Singapore, has a chapter on e-commerce and is expected to enter into force on 1 January 2022. The African Union has also recently voted to fast-track e-commerce negotiations under its AfCFTA.
Impact of social media on E-commerce
According to a new Accenture study, social commerce will grow three times faster than traditional eCommerce in the next decade. The market will grow from $492 billion in 2015 to over $1 trillion by 2025. A shift in consumer behavior will primarily drive this growth. Social media channels are becoming more than just channels for socializing; they also serve as discovery engines for brands. Users engage in various behaviors on social media, including searching for inspiration, contacting friends for recommendations, and making purchases.
Moreover, a survey found that 97% of Gen Z consumers get inspiration for fashion purchases from social media. Meanwhile, a recent study found that nearly 90% of Gen Alpha will behave and think like Gen Z consumers. This generation has grown up using digital technologies and sees them in the same light as tangible goods.
As a result, many leading brands understand the importance of working with influencers to increase brand awareness and build trust. These partnerships help brands increase their reach, promote affinities, and piggyback on their audiences’ trust. Moreover, eCommerce companies are increasingly collaborating with influencers to access consumers’ social circles.
Instagram, for example, is a fantastic platform for brand promotion. It allows users to engage with brands, actively increasing sales. Meanwhile, Facebook is ideal for small businesses because it will enable users to find and buy products based on their search history and preferences. While it has fewer users than Facebook, it is still an important channel.
Despite the popularity of social media platforms, the future of eCommerce depends on the ability to offer a seamless experience for consumers. In the end, consumers will expect brands to offer live chat features. Similarly, the growth of social commerce will be driven by the growing use of artificial intelligence (AI) and VR.