Electronic commerce or ecommerce is a business model that lets firms and individuals buy and sell things over the internet. It is buying and selling products or services, making money transfers, and transferring data over an electronic medium that allows people to do business without the constraint of distance and time.
Last year, as stay at home orders spread across the globe resulting from the COVID 19 pandemic, consumers worldwide were forced to adapt to shopping online, which fueled tremendous growth in the eCommerce sector.
According to statistics, eCommerce sales grew by over 30 percent in 2020, driven by unprecedented consumer demand during the global pandemic. Demand is continuing to shift, and by 2022, e-retail revenues will grow to $6.54 trillion, up from $3.53 trillion in 2019.
Each day, more SMEs in Africa make the transition to online selling, and older brands now urgently need to adapt if they want to survive and set themselves apart from the competition. From increased overall sales to new opportunities in niches previously untapped by African entrepreneurs, eCommerce in 2021 is set to continually move forward in ways that, pre-pandemic, would have seemed impossible.
Aside from general growth, here are ten eCommerce trends that are set to define the marketplace this year and beyond:
1. Reimagined shopping habits
This is an important eCommerce trend which doubles over as a direct consequence of the global lockdown to curb the spread of the COVID virus. The biggest catalyst for eCommerce growth has always been the industry’s ability to break the general consumer’s time-worn habit of physically visiting stores.
There is no doubt that online retail emerged as the clear winner in 2020 as consumers looked for easier and safer ways to shop. The percentage of shopping that happened online grew to over a third at the height of lockdown and introduced new customers to online shopping who had perhaps never shopped online before.
Older demographics, who may have been wary of online shopping previously, are going to enjoy the newfound convenience and continue to be eCommerce consumers even once brick-and-mortar locations reopen at full capacity. However, despite the huge growth in online retail, younger customers will likely want to get back to visit physical stores, as “lockdown fatigue” kicks in.
As soon as the pandemic ends, this year will offer us all a fresh appreciation of shopping and mortar retail, bringing with it an opportunity for our shopping habits to evolve while offering a new meaning to the overall shopping experience.
2. AI and AR Customer Sourcing
Artificial intelligence is already used in eCommerce to make intelligent product recommendations, help customers visualise products better and assist you with customer queries. Artificial intelligence (AI) acts as your online in-store associate by offering personalised guidance and recommendations to your customers while also using their past purchase history or browsing behaviour to show them products they are more likely to purchase.
Unlike in physical stores, online shoppers can’t try on or physically inspect the product that they intend to buy. Augmented reality (AR) helps eliminate this hurdle by letting customers see how a certain product would look on them even before they buy the product.
Therefore, AI and AR sourcing are vital eCommerce trends to look out for this year because they are set to enhance the customer experience greatly. To provide you with more context here, online sellers are estimated to spend about $7.3 billion on AI by 2022. It has also been predicted that more than 120,000 stores will be using AR technologies to offer customers a rich buying experience by 2022.
In 2021, AI is going to help find your customer for you too. Intelligent algorithms will analyse current trends alongside your products, sales channels, customers and buyer behaviour to identify the best channels, time and price to list your products. This will save hours of number crunching, graph creating and report writing, and help brands accelerate sales and immediately boost profits. This year, SMEs in Africa that implements AI and AR in their eCommerce stores will likely see increased conversions and a decrease in the return rate.
3. Increase In Digital Advertising Competition
While the market for eCommerce has been expanded due to the pandemic, so too has the competition. Companies and marketers that are able to lead innovation for advertising content will reap higher and higher rewards.
In addition, digital content has become increasingly important, and companies have been making larger investments in this category. This was true before the pandemic, but the coronavirus really accelerated this investment as with so many other things.
Large retailers that didn’t adapt their business model to make the most out of online advertising before the pandemic either went out of business or learned a very tough lesson. In 2021, eCommerce will become a higher priority on every company’s agenda, which will increase the race for digital content.
4. P2P and Rentals
It’s no secret that the eCommerce industry is grappling with a significant returns problem. Online purchases are nearly three times as likely to be returned than store-bought goods, and clothing continues to be particularly problematic, as shoppers struggle to find the right size, fit, and colour. What’s more, consumers often shop with the intent to return a purchase.
Following the significant growth in P2P (peer-to-peer) platforms, many retailers are looking to expand into rental eCommerce this new year, which is a fast-rising trend. A peer-to-peer (P2P) service is a decentralised platform whereby two individuals interact directly, without intermediation by a third party. Instead, the buyer and the seller transact directly with each other via the P2P service.
Peer-to-peer services and rental platforms bring together people looking to sell products with people willing to buy them as well as investors with prospective borrowers seeking loans. By offering consumers the opportunity to rent clothing, furniture or electronics, you can increase audience reach while reducing returns.
5. More Payment Options Will Emerge
Payment options are one of the main reasons why customers choose a specific brand. As of now, most eCommerce businesses accept digital wallets (like Google Pay, Samsung or Apple Pay, and PayPal) apart from debit and credit cards. Cryptocurrencies, especially Bitcoin, have many benefits for online shop owners, such as low transaction fees and no reverse transactions. For example, Overstock partnered with Coinbase, a Bitcoin platform, to allow customers to use Bitcoin as a payment method.
This year, we are bound to see more eCommerce businesses will start accepting cryptocurrencies and other improved payment options for online transactions. SMEs in Africa desirous of making it big in eCommerce this year should ensure that their sites are equipped to handle any payment such as PayPal, Amazon Pay, Apple Pay, Shopify Pay, etc.
Offering payment options removes friction from your store experience, and as an entrepreneur, this is something you should always be striving to do.
6. Increased demand within home-related niches
While social distancing may be called off in the near future, the pandemic’s psychological impact on consumers around the world will last much longer than you or I can predict. Now, this might be a sad state of affairs, but it also presents a lot of new opportunities for innovative entrepreneurs across the globe this year.
Ecommerce niches that historically had low traction have currently become lucrative playing fields. There is an astonishing increase in demand within home-related niches such as entertainment and sanitation. This is not just because of the global lockdown but also because in the aftermath of the pandemic, consumers will have to think about sanitation in a completely different way, likely fueling the demand for products focused on keeping individuals safe from future outbreaks.
7. Mobile Commerce Will Dominate Ecommerce
As consumers’ trust in online shopping increases, they feel more comfortable making purchases using their mobile devices. More transactions are being done on a mobile device, and the importance of having a mobile-friendly business has truly increased.
By the end of 2021, mobile devices are expected to make almost 73% of total eCommerce sales. Besides, 30% of online shoppers are likely to abandon their carts in the middle of shopping if they find out that your website is not mobile-friendly. This year, as an SME in Africa, you should focus on improving the customer experience for mobile users because the best time to get into mobile eCommerce is now.
8. Self-service platforms will continue to rise in popularity
Getting started online was once a long and painstaking process. But, 2020 has shown us how quickly small businesses and solopreneurs can digitally pivot their businesses. Having a Self-service platform allows you to provide online support to your customers without requiring any interaction with a representative from your company.
To take advantage of this rising eCommerce trend this year, rather than going the expensive route the first time around with your eCommerce store, search for platforms that can help you get up to speed quickly.
If your brand is already established, consider creating templated content that can help your audience get up to speed quickly with using your products or solving a common problem within your industry.
9. Social Commerce
As far as eCommerce trends go, this one is one of the fastest-growing trends to watch out for this year. The reason for this is simple; everyone (including you and I) is glued to their phones these days, swiping, liking, commenting, browsing and buying.
But the true trend lies in innovations like Instagram Checkout, which are making it easier than ever before for customers to make social purchases while remaining on their social applications of choice, rather than being carted off to the site in question, for the entire buying experience.
According to ResearchAndMarkets.com, amid the COVID-19 crisis, the global market for social commerce, estimated at $89.4B in 2020, is projected to balloon to $604.5B by 2027. Now 2027 might feel like a long way off, but every year between now and then is slated to see huge growth. You’d be wise to start exploring omnichannel eCommerce and pumping out those shoppable posts.
10. The Rise Of Voice Commerce
Voice commerce is a thing now, and in 2021, it figures to be a big thing. Voice commerce is a technology that helps reduce the end-users’ dependence on hardware and allows them to use voice commands to search and purchase products online.
As smart speakers become more and more ubiquitous, and the general population’s comfort (and dependency) on them grows, voice commerce is positioned as the next major retail disruptor. Seventy-two percent of consumers use voice search through personal digital assistants, and 25% of consumers have made a purchase using a digital assistant.
Global strategy consultants OC&C found that voice commerce, in the States alone will account for $40B worth of retail sales by 2022, up from just $2B in 2017. Isn’t that an increase of 1900% over five years?
Conclusion
Trends come and go because life challenges us all the time. This is true for eCommerce trends too, but the ten above trends are worth committing your business to as far as this new year is concerned. This year, irrespective of whatever new challenges the pandemic brings, SMEs in Africa will be presented with both obstacles and opportunities. The proactive players will seize the day, while businesses that remain complacent will be left behind.
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