The Future of Ecommerce: 5 Trends Sellers Need to Know
This year, the rules of e-commerce have effectively been rewritten. In an increasingly touchless society, our lives have become digitised, changing how we engage, interact, and view day-to-day life. Now, new online buying behaviours have emerged, and millions of consumers that previously relied on brick-and-mortar sales are shopping online to meet everyday needs.
But the rise of e-commerce hasn't been without shortcomings. At the height of the pandemic in May, sellers, welcoming millions of new consumers, were faced with supply chain disruption, shock shortages, and business loss. Many turned to international options to mitigate issues, and cross-border sales saw a staggering 21 per cent increase in year-on-year sales in June.
With uncertainty surrounding the new year, sellers will naturally be wondering if this growth is sustainable. It will be vital more than ever to plan for a post-pandemic environment.
To prepare, here are five key trends that will define success in 2021:
Growth of Cross-border, Global Marketplaces
In a year of uncertainty, the global marketplace has become one of the very few resilient, effective, and profitable platforms to weather the storm. Fuelled by the transformation of shopping, Alibaba, Amazon, Etsy, and Taobao all reported record figures this year as consumers turned to these new 'virtual shopping malls.'
By the end of 2020, an estimated will have made an online purchase, and the rise in users is beginning to signal a shift in online sales. As important as the U.S. market is to this growth through marketplaces such as Amazon, eBay, and Etsy – sellers can often forget that 85 per cent of the industry purchasing power lies abroad. In fact, in China, e-commerce sales have recently overtaken the U.S., and the country's 'Singles Day' shopping event eclipsed Black Friday in the U.S.
At the end of December, the global e-commerce market was expected to reach $1trn, and early forecasts anticipate the trend to continue. With new cross-border payment solutions that can manage overseas logistics, pay suppliers in a local currency, and make VAT payments in real-time, becoming an international seller is easier than ever before.
Diversifying Supply Chains
To say that lockdown restrictions affected supply chains in 2020 would be putting it lightly. At the peak of the crisis, disruption to factories highlighted the fragility of relying on one single source for inventory. With little to no option left for sellers, the shift to diversifying supply chains to mitigate financial repercussions has called for an industry-wide rethink.
However, disruption isn't new, and one of the biggest mistakes sellers often make is overlooking future risk planning and the prioritisation of corrective actions.
Instead of assuming there won't be interruptions to one supply chain, consider other sources. With an abundance of cross-border services such as parcel consolidation, global fulfilment, and payment providers, sellers can - and should - explore international markets.
Faster and Faster delivery
As the world changes, consumer preferences, schedules, and expectations are also rapidly affecting the speed and manner of how products are delivered. In an age of immediacy, the industry standard of the typical 7 to 10 delivery day window has become outdated. Almost are now willing to pay for same-day or faster delivery.
Thanks to online marketplaces such as Amazon Prime, Walmart, and Best Buy, the 'new normal' of instant delivery in as little as two hours has challenged sellers to rethink their customer service approach. Now, the speed, price, and the previously optional 'add ons' are differentiating sellers through competitive advantage in an e-commerce race that most cannot afford to lose.
The key in the new year is to be flexible. With diversified supply chains, robust inventories, and reliable fulfilment management, sellers can use their agility to deliver to the right customers at the right time.
The Rise of Social Commerce
The business advantages for retailers to sell directly through social media in a year that has seen e-commerce become a focal point of day-to-day continuity has drastically strengthened. The opportunities to buy, sell, or promote on one integrated platform through leveraging channels that millions of people are using now appears to be a no-brainer for most sellers.
Staggeringly, over believe social media helps them make a shopping decision, and yet, only 40 per cent of sellers are using it to generate sales. In 2021, experts project this number will rise significantly; we're arguably already seeing its value in China, which has hosted its biggest sales event - Singles Day - on record so far. Through live-streaming, two-thirds of Chinese consumers said they purchased products via the platform in the past 12 months, citing "instant information" as a significant deciding factor.
Live-streaming is bound to become part of the U.S. shopping experience, and with more features evolving and launching alongside industry growth and demand – sellers should keep up with new trends.
The Transformation of Retail Shopping Events
As online commerce continues to prevail, annual in-store holiday season doorbusters promising discount deals have begun to lose their relevance. During the 2020 holiday season, deals popped up early, 24-hour sales lasted a month, and by late November, most of the 'festive shopping' had been done online.
Retail shopping events have changed, accelerated, and turned in favour of digital commerce, with sales increasing 30 per cent year-on-year during the 2020 holiday season. More importance is being placed on the broader e-commerce market, and the increase in competition in an already saturated market will require sellers to work smarter.
Instead of waiting for domestic season events, think globally. By partnering with the right cross-border payment provider, sellers can enter new markets, effortlessly move money to all corners of the world, and grow a larger audience that will effectively move sales forward post-pandemic.
Pandora and IBM digitise jewellery supply chain
Pandora has overhauled its global supply chain in partnership with IBM amid an ecommerce sales boom for its hand-finished jewellery.
The company found international success offering customisable charm bracelets and other personalised jewellery though its chain of bricks and mortar retail destinations. But in 2020, as the COVID-19 outbreak forced physical stores to close, Pandora strengthened its omnichannel operations and doubled online sales.
A focus on customer experience included deploying IBM’s Sterling Order Management, increasing supply chain resiliency and safeguarding against disruption across the global value chain.
Pandora leverages IBM Sterling Order Management as the backbone it its omnichannel fulfilment, with Salesforce Commerce Cloud powering its ecommerce. Greater automation across its channels has boosted the jeweller’s sustainability credentials, IBM said, streamlining processes for more efficient delivery. It has also given in-store staff and virtual customer service representatives superior end-to-end visibility to better meet consumer needs.
Jim Cruickshank, VP of Digital Development & Retail Technology, Pandora, said the digital transformation journey has brought “digital and store technology closer together and closer to the customer”, highlighting how important the customer journey remains, even during unprecedented disruption.
"Our mission is about creating a personal experience and we've instituted massive platform changes with IBM Sterling and Salesforce to enable new digital-first capabilities that are much more individualised, localised and connected across channels and markets,” he added.
Pandora’s pivot to digital
The pandemic forced the doors closed at most of Pandora’s 2,700 retail locations. To remain competitive, it pivoted to online retail. Virtual queuing for stores and virtual product trials via augmented reality (AR) technology went someway to emulating the in-store experience and retail theatre that is the brand’s hallmark. Meanwhile digital investments in supply chain efficiency was central to delivering on consumer demand.
“Consumer behaviour has significantly shifted and will continue to evolve with businesses needing to quickly adapt to new preferences and needs,” said Kareem Yusuf, General Manager, AI Applications and Blockchain, IBM. “To address this shift, leading retailers like Pandora rely on innovation to increase their business agility by enabling and scaling sustainable supply chain operations using AI and cloud.”
Yusuf said Pandora’s success was indicative of how to remain competitive by “finding new ways to create differentiated customer experiences that protect their enterprises from disruptions to help mitigate risk and accelerate growth”.