Ecommerce growth varies significantly by retail category and price point. For instance, soft goods such as apparel and electronics have grown more than other categories. However, health and beauty products and services have been slow to move online, partly because consumers still prefer to buy them in-store. Another important factor determining e-commerce growth is the price point, with off-price retailers and luxury brands proving less receptive to online growth. However, new technologies may change that, and we may see a more significant shift to online commerce for all categories.
Embracing newer types of commerce at more excellent rates
While most brands spent the first two years of the 21st century building out their eCommerce operations, they also started pushing the envelope by investing in emerging platforms and new types of commerce. The first two years of 2021 will be critical for brands looking to stay ahead of the competition and secure a stable position in the eCommerce market.
The eCommerce market is expected to grow much faster in emerging markets like South East Asia. The growth in this region will outpace that of other major markets, including China and India, which are expected to grow by only 10% and 5%, respectively. By 2021, 8 in 10 people in SEA will likely be digital consumers.
In the first quarter of 2021, third-party sellers will take advantage of the eCommerce market’s supply chain and inventory issues. As a result, brands risk losing the “buy box” if their items are out of stock. The proportion of third-party sellers has increased steadily in recent years. In 2021, third-party sellers at Walmart will account for 56% of worldwide unit sales. This is a significant increase, and Marketplace Pulse is tracking this growth.
The winning consumer goods companies will be active across many eCommerce channels. They will engage with consumers in the way they prefer. For example, two-thirds of these companies will sell on food-delivery platforms in the next 12 months. Twenty percent plan to sell on social media. Although these platforms are still in their infancy, they must be present where shoppers are. This means that players must adopt new platforms quickly.
Even if eCommerce accounts for only a fraction of global retail sales, it presents a massive growth opportunity. As the digital and physical environments merge, the lines between online and offline business will become blurred. More than 70% of consumers will use multiple channels during their shopping journey.
The emergence of voice technology has also led to new ways to interact with brands. For example, users can use voice-activated devices to browse the web or place orders. This new form of commerce is known as voice commerce.
Global eCommerce companies saw significant growth in 2020. Eighty percent of the companies in the study experienced double-digit growth in 2020. One example of this growth was Pinduoduo, which grew its online share of retail sales by 97.6%. Amazon, on the other hand, experienced a 37.6% increase in revenue.
Regulation imposed on functioning and advertising
By 2021, the United States will implement regulations governing the advertising and functioning of eCommerce businesses. Companies calculate the minimum required to avoid regulation while maintaining their dominant market share. However, with the advent of digital technologies, avoiding regulation becomes less feasible. The rules should target specific problems.
Increasing acceptance of technology
In North America, the eCommerce market’s growth is driven by the adoption of digital technologies. The region is home to many leading eCommerce platforms and has a higher adoption rate for digital technologies. It is also experiencing increased penetration of eCommerce and a thriving logistics infrastructure.
In terms of the overall growth of the eCommerce market, the key enablers are technological advancement, reducing the digital divide, and advancing global supply chains. Technological advancements enable SMEs to access international markets. They also facilitate vertical coordination processes in the food chain.
Retailers are catching up with technological advances and a growing eCommerce market. Many businesses are moving online, and Internet sales are predicted to exceed traditional retail sales by 2021. In addition, the global COVID-19 pandemic has accelerated the adoption of eCommerce. The U.S. retail industry is still in its early stages of digital disruption, representing just 13% of sales. Meanwhile, the eCommerce market accounts for 46% of retail sales in China.
As the eCommerce market grows, the importance of developing innovative strategies to stay ahead of the competition is increasing. SMEs can use eCommerce to enhance their communication with customers, increase sales, and increase productivity. They can also address customer demands through online services and applications.
With more people spending more time online, eCommerce is becoming increasingly prevalent. Businesses are investing in brand building to increase customer lifetime value, increase conversion rates, and attract out-of-market buyers. As an additional benefit, eCommerce growth has become easier and faster. In addition to a growing number of business models, eCommerce has enabled unprecedented technological advances. Artificial intelligence and machine learning, cloud computing, drone deliveries, and live streaming are just a few of the latest innovations in the eCommerce market.
Voice-enabled shopping is expected to reach $40 billion in the U.S. by 2021, according to OC&C Strategy Consultants, a leading business consulting firm. It is an essential avenue for marketing because it can reach millions of potential customers while tapping into automated commerce. Social media is also a growing sales channel for many businesses, as billions of people access it daily.
One of the most innovative trends in eCommerce is the buy now, pay later service (BNPL). This service allows consumers to pay in installments and avoid interest charges. This service was introduced to help consumers make the purchase they want while retaining flexibility. The trend is fueled by direct providers and facilitators who act as intermediaries and integrate BNPL services into their payment infrastructure. Some of the leading organizations that have adopted BNPL are Shopify and Mastercard.