The future of eCommerce looks bright. It is projected to reach 2.14 billion users by 2021. This industry will continue to grow and evolve with new technologies and digital buyers. As we approach 2020, many factors will be at play that will impact eCommerce. Let’s look at some of these factors.
Growth of eCommerce in 2020
Ecommerce has dramatically increased in recent years as more consumers move online to shop for their products. Many brick-and-mortar retailers, distributors, and B2B sellers have moved to the digital space, and the shift is only expected to increase. 57% of purchasing managers have allocated a large portion of their budgets to digital channels and direct-to-consumer marketing. In 2020, the number of online shoppers was expected to reach 2.1 billion, making eCommerce a growing industry. This trend also creates an even greater demand for online shopping, including in markets like groceries.
The global pandemic in 2020 triggered a spike in online sales, especially for food and beauty products. For some people, purchasing products online became essential; for others, it was a way to stay safe. A recent study from Digital Commerce 360 revealed that consumers would spend $861 billion on online shopping in 2020, up 44 percent from the previous year.
Increased investments in omnichannel fulfillment drive the growth of eCommerce. As a result, carriers and online merchants are doubling their workforces. In the United States, the number of jobs associated with eCommerce is expected to increase by 21% by 2021. Despite this growth, some companies have faced challenges.
The growth of eCommerce has increased cross-border sales. It has become increasingly attractive to consumers for the convenience of buying international products at competitive prices. This has created a growing e-commerce industry. Walmart and Amazon have partnered with several e-commerce companies. Other companies involved in re-commerce include Momox and musicMagpie.
Cross-border eCommerce is increasing, and this trend is only expected to continue. But retailers must do more than translate their websites to reach international audiences successfully. Localization involves adaptation to the specific market and currency. This may include making product versions available in the local language and changing units of measure.
Impact of the COVID-19 pandemic on eCommerce
COVID-19 has the potential to wreak havoc on the e-commerce sector, and the same is true for brick-and-mortar retailers. An Amazon survey of 200 000 third-party vendors found that 36% were inactive as of April 2020, a jump from 28% in February. This crisis is particularly hard on sellers with fewer than 1500 ASINs. It is possible that the problem has shifted demand to larger sellers and could also affect eCommerce sales.
Before the COVID-19 pandemic, online retail sales grew by 4.5 percent per year globally. However, consumers’ purchasing behavior began to shift due to the virus. They started to avoid crowds and indoor venues and turned to the internet more frequently for purchases. This went the way consumers shopped, and retailers operated, and many brands have already begun pivoting their business strategies in response to the epidemic.
Although the impact of COVID-19 on e-commerce is still not fully understood, some countries have attempted to promote this sector in the wake of the pandemic. However, many challenges faced by online businesses remained in place before the virus swept the world. Furthermore, regulations that aren’t designed for the online world can pose barriers to the growth of firms. This means governments must develop policies that promote a favorable e-commerce environment for businesses.
In addition to the increased availability of online sales, older consumers are increasingly engaged in online shopping. A 10 million credit card users survey shows that the proportion of online purchases is increasing, with the highest ratios of purchases made online by users aged 60 and older. In addition, the survey shows that consumers in these age groups are more likely to stick to new routines if they start to engage with e-commerce.
While the COVID-19 pandemic has heightened uncertainty and impacted the digital economy, it has stimulated its growth. Despite several restrictions on economic activity, the data indicate that most countries have experienced substantial increases in the digital space, and this growth is expected to continue.
Impact of digital payment methods on E-commerce
Digital payment methods are a crucial part of the e-commerce ecosystem. The rapid development of these payment methods has helped reduce transaction costs and time. It has also improved payment efficiency, promoting consumer demand and sustainable economic growth. The Digital Inclusive Finance Index of Peking University provides data on digital payment methods.
While the benefits of these payment methods are precise, merchants must still adjust their business processes to accommodate them. Some of these changes require a redesign of the payment process. Many larger retailers have already implemented digital payment methods, while smaller businesses must create new systems to accept them. In addition to making the payment process more efficient, small businesses need to consider customer preferences.
Increasing internet usage and the adoption of new payment methods have created a robust global payment market. According to the International Telecommunication Union, 4 billion people worldwide will use the internet in 2019. This represents over 50% of the total world population. This increased access to the internet has helped drive the growth of e-commerce and the demand for digital payment methods. New technologies, such as digital wallets, help merchants and customers make the payment process as convenient as possible.
The impacts of digital payment methods are more significant in urban than rural areas. The development stage of a region also affects the number of consumers receptive to the new payment methods. Higher-educated individuals are more likely to use digital payment methods. To determine the level of education of a region, higher education enrollment is measured in terms of the number of higher education students per 10,000 people.
Digital wallets allow consumers to store and transfer payment credentials securely. Digital wallets are increasingly being used to pay for goods and services online. In the Americas, digital wallets are projected to represent almost 25% of transactions in 2021, and this number is expected to increase to 36% by 2025.
Digital wallets are becoming the most popular e-commerce payment method. They are also becoming the dominant method of payment for online purchases. In the Asia Pacific Region, digital wallets will account for over 60% of eCommerce transactions by 2021. In Latin America, mobile wallets will make up nearly 20% of the market.
Future of eCommerce
Many new eCommerce trends are driving the growth of online stores. Increasing consumer expectations and rapidly evolving consumer behavior will change how brands market and sell products. Brands are looking to differentiate themselves from their competitors by offering new experiences and enhancing brand loyalty. With the growth of social media and omnichannel communication, brands can create more personalized and convenient shopping experiences for their customers.
One such development is automated shipping. This technology allows businesses to automate the process of aligning shipments and delivering orders to their customers, resulting in a faster delivery time. Automated shipping software is widely available and is now integrated with many eCommerce platforms. It is an increasingly important trend for brands wanting to scale faster and lower costs.
The growth of eCommerce is accelerating globally as markets outside the U.S. and other developed markets adopt online shopping. Moreover, the development of global eCommerce has continued to increase in recent years, and its share in retail sales is predicted to increase by 25 percent by 2020. It is the highest growth rate in the years between 2019 and 2024.
Consumers are increasingly demanding personalized shopping experiences. The future of eCommerce will have a strong focus on improving the experience of customers. This will take on many forms. For example, addressing a customer by name is a small but significant way to differentiate your brand. This trend can be implemented in various ways, including using a unified communication service.
Retailers are also moving towards more convenience and speed. Consumers will be more likely to buy more items with a faster delivery time, lowering company costs and increasing average order value. Further, brands are increasingly using inventory management systems to reduce the risk of stockouts. This helps them avoid wasting time and money relocating inventory from one location to another. Additionally, brands are offering more shipping options and displaying cutoff times.
Machine learning and artificial intelligence are also making an impact on eCommerce. Machine learning can analyze buying history and recommend products based on that information. In addition, data analysis can identify fraudulent orders.