08.09.2021

Trends in e-commerce

Trend update from Rainer Neuwirth, Head of the Master's program in E-Commerce at the FHWN Campus Wieselburg. Digitalization and the internet have radically changed our world. The way we obtain information today, how we communicate, but also consumption itself – that is, the purchase of goods and services – is no longer comparable to the conditions of the last few decades.

ecoplus Digital GmbH*

The world is spinning ever faster, new technologies are springing up everywhere, and today's business models must adapt to these new conditions. The retail sector, in particular, has undergone an incredible transformation due to the internet and the resulting e-commerce. Traditional retail structures are being shifted, disrupted, or disappearing from the market altogether. COVID-19 has dramatically accelerated this structural change, even by seven to eight years, according to a recent study by the Institute for Retail Research (IFH). As a result, companies must adapt even more quickly to changing customer needs. Below is a selection of five trends currently shaping the industry.

From Social Channel to Omni-Channel

First of all: Personal sales in physical stores are not going away. The majority of sales are still generated in brick-and-mortar stores. However, online sales are rapidly gaining ground. IFH Köln anticipates an online share of up to 22 percent in retail by 2030. Due to the pandemic, this will certainly happen sooner than expected. The associated decline in revenue for brick-and-mortar businesses that do not sell online will therefore continue to grow. Retailers must therefore become more digital and, above all, more service-oriented. Customers simply shop differently today, and if a company can't be found online, even the best offer is useless. But don't get overconfident. Not every retailer or manufacturer needs an online shop. It's much more important to make the brand and its offerings discoverable online. In other words: Communicate where your customers communicate – social media, website, digital advertising formats, review platforms, etc. On average, customers today need up to six touchpoints before making a purchase. This makes it all the more relevant to develop your business model towards omnichannel. Customers expect a seamless shopping experience across all channels, both online and offline. Turn your customer experience into a competitive advantage and leverage collaborations with established marketplaces and e-commerce service providers.

AR & VR

Augmented Reality brings digital content into the real world, while Virtual Reality places you in a digital space. Why not virtually place that new sofa in your living room, configure it to your liking, and have it delivered, instead of driving miles to the nearest furniture store? Especially for complex products, AR and VR significantly improve digital product evaluation. This is also why we're suddenly buying furniture or cars online. IKEA and Tesla are already leading the way. VR expands these possibilities even more radically. Virtually, there are no temporal or spatial limitations – the only real limitation is usually the developers' imagination. Work is already underway on purely virtual worlds with digital stores.

Social Shopping

Shopping directly via social media is becoming increasingly important. For many months now, Facebook and Instagram have offered the option to tag products directly from posts or even purchase them directly from the provider's website (as of Q1 2021 in Austria). Soon, it should be possible to shop directly from posts. And if Facebook does this, Google, as a search engine, could soon follow suit. After all, why not store your credit card information directly with Facebook or Google and buy directly from search results or Instagram Stories? Social shopping apps are also enjoying increasing popularity. They allow you to shop digitally and in real time, together with friends or like-minded individuals. Tip: Prepare your data accordingly and set up suitable interfaces.

Sustainability

Speaking of it as a trend would be the wrong approach – sustainability is a necessity! Examine how you can make your processes more sustainable. This starts with packaging and ends with delivery. How do you operate at your own site? What impact does your business have on the environment, people, and animals? Today's customers are demanding increasingly sustainable business practices and are paying closer attention to the values they support with their purchases. Products don't always have to be cheap – they can be greener!

Direct to Consumer

More and more manufacturers are starting to operate their own online shops, so-called DTC shops ("Direct to Consumer" shops). Independence from retailers, supposedly better margins, and direct contact with the end customer are tempting reasons to develop their own online shop. But beware – this strategy isn't right for everyone! Very often, manufacturers overextend themselves with the plan to operate their own online shop and consequently neglect their core business. Take advantage of the competitive edge: Focus on your core business, partner with online retailers, build your own online presence with an informative website, and digitize your offerings. Focus on high-quality content and promote your brand. Link from your website to products that online retailers already carry. This way, everyone does what they do best and helps each other instead of competing against each other.