E-commerce, powered by increasing internet penetration and improved technology, has become a global phenomenon in a short time. In the middle of the 1990s, it was barely an industry with the first online stores coming up. As of 2024, according to estimates, there are more than 30.7 million online stores worldwide and this number is growing daily as more and more consumers are doing their shopping online. Not only Amazon, eBay, Alibaba, and Walmart, but many small stores are also reaching out to consumers in various segments.

E-Commerce has transformed buying and selling. Its popularity alters the nature of both B2B (business-to-business) and B2C (business-to-consumer) landscapes. It is changing consumer behavior, product availability, transportation, pricing strategies, and inventory management.

It is sure to keep changing in the future as well. New technologies like AI and augmented reality will impact how consumers will behave and how the online stores will interact with them. Customized offers based on individual preferences and buying habits and better user experiences will surely benefit both consumers and online stores.

Research Shows Growth of E-Commerce

E-Commerce was already on a high growth path when the Covid-19 pandemic hit the world. Its growth trajectory boomed as e-commerce showed the advantages of online shopping. According to a report published by Deloitte, 85% of all retail sales until 2019 were through brick-and-mortar stores. A year later, in March 2020, 42% of consumers in the US were making their grocery purchases online.

Online shopping has become even more important now, both for consumers and businesses. It is a convenient way to buy for consumers as they can shop from anywhere, anytime. Online purchases save time. Often, it also saves money. They don’t have to battle traffic and weather conditions to reach a brick-and-mortar store. Consumers can also research and compare prices to make better buying decisions. They can also choose from a wider variety of products.

It is also very good for businesses. There are numerous advantages –

1. Improved sales – Unlimited customer reach and 24/7 availability generate increased sales. An online store can use advanced technology to reach out to customers from around the world and improve consumer relationships.
2. Lower operational costs – E-commerce is a very cost-effective way of doing business. The initial investment is also low compared to opening several physical stores.
3. More customers – An online store can reach out to customers from around the world easily, which means a broader market. The business can be scaled globally at a minimal cost.
4. Simplified purchase process – Consumers can buy directly from the online shop. There is no need to interact with a salesperson. There is no need to leave home. Consumers are not limited to stores in their local area. Products can be shipped from anywhere.
5. Automation – E-commerce allows complete automation in inventory management, customer service, and shipping. This means everything can be managed easily. The business has more time to focus on the key areas and grow.
6. Low advertising cost – The traditional advertising channels like television and newspapers cost a lot of money. Online campaigns are cheaper by comparison. Also, word spreads fast on the internet, which means, you can reach many potential customers through social media and online reviews easily.

There are many reasons why e-commerce is so important in today’s business world, both for consumers and businesses. The following figures show its growing popularity –

• E-commerce in 2024 is worth $6 trillion globally.
• It is expected to cross $6.3 trillion by the end of 2024.

• 2.71 billion people from around the world buy online.

• 34% of online buyers shop once a week at least.

• As of 2024, 20.1% of retail shopping is done online and this will grow to 22.6% by 2027.

Source: https://www.sellerscommerce.com/blog/ecommerce-statistics/ 

Technologies and Trends That Improve User Experience

Over the years, we have seen many e-commerce trends and technologies come and go. However, some of them are so powerful that they have changed how business is carried out online. Here are a few major trends that will impact the market in the coming years.

Top 5 Trends in E-Commerce

Augmented Reality

With advanced technologies like Virtual Reality (VR), online businesses are improving user experiences vastly. They can provide an immersive and lifelike product preview to the customers. For example, in the real estate field, many businesses have experimented with technologies to allow people to remotely view properties.

With the AR mobile app of IKEA, customers can view furniture from their homes. If a customer can see how a new couch will look in the living room, then it would surely reduce the uncertainty and also post-sale product return. Also, many optical retailers are letting consumers try glasses digitally before buying. Sephora has an app to help customers buy makeup by rendering the image in real time.

Artificial Intelligence To Improve Service Quality

Artificial Intelligence (AI) and Machine Learning have become household names. AI in recent years has transformed e-commerce, allowing businesses to automate. Chatbots have streamlined customer service. Product recommendations can be personalized. The supply chain can be optimized to serve the customers better and improve business management. The potential of AI for e-commerce is virtually limitless.

Over the next few years, AI will surely improve individual shopping experiences further through better customer service and personalization. Generative AI will answer customer questions, help them find products, complete orders, and may also process refund requests. You can expect a service much like what customers get when they interact with a real-life salesperson in a brick-and-mortar store.

Search engines powered by AI use machine learning algorithms to understand user intent and improve the relevance of search. The most relevant products are displayed, which naturally improves conversions.

Personalization

Advanced technology can now analyze customer data, including demographic information, browsing history, and buying behavior. It can then make personalized product recommendations that enhance the shopping experience. All this can be delivered with smart Web and Mobile app development done efficiently by Overcode Company. Personalization, integrated into the website and app, will help businesses of all sizes.

Imagine a future where an online store displays products you buy or view the most on the Home page. You won’t have to navigate deep down into the website. Personalization will further simplify the buying process and also save time. It can also offer cross-selling opportunities by displaying related products on the checkout page.

Micro-Segmentation

Micro-segmentation refers to breaking down the customer base into small sub-groups based on specific criteria. Its purpose is to update marketing, communication, and improve customer experience. This is perfect because marketing always wants to create consumer groups and address them separately instead of addressing all the consumers as one.

Micro-segmentation lets the business anticipate the precise objectives and needs of the visitors and offer personalized products. This improves the conversion rate and also promotes repeat business. Micro-segmentation also allows the store to identify changes in consumer behavior. The business can then change the marketing plan accordingly.

Subscription

The subscription model lets a business earn recurring income and build customer loyalty. In this model, the subscriber pays a recurring fee, which can be annually or monthly, to get ongoing service or product access. A one-time purchase can be transformed into a recurring buy.

It gives the business a predictable income and opportunities to cross-sell and up-sell. Businesses can also personalize the offers as they have access to purchase history. According to an Accenture survey, 56% of all customers are more likely to buy from a known retailer.

A study carried out by The Harvard Business Review has found that it is more profitable for a business to retain a customer than to get a new one. The subscription model allows a business to retain customers and build a long-term relationship. Customer loyalty is always a huge asset. The model also reduces marketing and customer acquisition expenses. It cuts the order processing cost as well.

Markets Showing Growth

The world of e-commerce has seen spectacular growth since the pandemic. What’s most exciting is its rise in several emerging markets. These markets are from everywhere – Asia, Africa, the Middle East, and Latin America. This stellar growth is powered by a big online customer base, an expanding middle class, technological innovation, better internet penetration, and the demand for international products.

Here are the 5 biggest emerging e-commerce markets with their growth rates –

• Argentina – 29.9%
• Philippines – 24.1%
• India – 22.3%
• Indonesia – 20.0%
• Malaysia – 18.0%

Source: https://straitsresearch.com/statistic/fastest-growing-e-commerce-markets 

Most Popular Categories for Online Purchases in the U.S

Many nice markets are fueling the growth of e-commerce. They have fewer customers compared to Amazon and Walmart but their focused approach is making a big difference. Here are the top 5 categories –

Fashion – 8.94% growth every year by 2029

Inexpensive and trendy clothing and mobile commerce have been a big factor. Consumers are using their tablets and smartphones for online shopping. The fashion retailers are implementing innovations to attract them and keep them interested.

Electronics – 8.92% growth every year by 2029

Smartwatches, smartphones, and tablets are now essential gadgets as more and more consumers now favor a digital life. There is also increased demand for video and audio equipment because of smart home devices, such as Alexa, Siri, and Google Home.

DIY and Hardware – 7.87% growth every year by 2029

Investment in home renovation is fueling the growth. There is also more interest in functionality and home design.

Media – 7.78% growth every year by 2029

e-books, internet news subscriptions, and streaming services have led to an increased demand for online content. Spotify, Audible, and Netflix are the leaders.

Food – 6.58% growth every year by 2028

There is always a constant demand for food. Online grocery shopping is convenient. Customers can buy from the home, which is appealing in the modern-day fast-paced life.

E-commerce is evolving and growing rapidly as internet connectivity is improving all over the world. Even the traditional businesses now realize that they must have an online presence and are integrating the two. This is allowing them to expand their reach and remain competitive. In the future, more technologies and innovations are sure to boost the prospects of e-commerce and benefit both consumers and businesses.