The past two years have been a serious boost for e-commerce. Not only was there strong growth in the market, but an entire industry had to adjust to changing consumer behaviour as more and more people around the world were turning quickly to e-commerce and marketplaces. About 80% of them now see the world as ‘phygital’, where technology bridges the gap between the digital and physical worlds. E-commerce sales are expected to reach $6,388 billion by 2024. High time to catch up with our CEO, Mickael Froger, about the e-commerce of the future.
I’ll start by mentioning two aspects that well-advised insiders will already be familiar with and that are closely related to each other: Social Commerce and Live Commerce. Of course, these terms are not new; we have been hearing about them for several years now, but the actual breakthrough has not happened until now. The pandemic crystallises here as a game changer, as it has made these trends widely accepted. The real boom is yet to come – driven by Gen Z and Millennials. Statistics bear this out, with the number of social commerce buyers in the U.S. nearly doubling between 2018 (pre-Corona) and 2021 (during/post-Corona). Europe saw the biggest growth in livestream shoppers last year, with 86% of growth.
The trend is real and should be seriously considered by brands and retailers in 2022. A recent report states that shopping via social media platforms will be worth $1.2 trillion globally within the next three years. Those who don’t (yet) have a strategy for TikTok, Instagram and Facebook, and co. will be left behind. It’s no longer just about promoting your brand or pushing your products, but about creating an engaging and meaningful cross-channel shopping experience. More and more brands have therefore integrated social commerce as a core component of their omnichannel commerce strategies. Social commerce is an opportunity to place even more emphasis on direct relationships and personalised shopping experiences for their customers, which brings us to the topic of Direct to Consumer (D2C). Brands are increasing their direct online presence, gradually juggling marketplace presence, social media and their own e-commerce website to reclaim ownership of their brand image and how they engage and sell to their customers. All of which ultimately leads us to “Commerce Anywhere.”
You should be prepared: the new normal is “Commerce Anywhere”, brands want to be present in every possible shopping moment as optimally and efficiently as possible. To do this, they need expert know-how and a solid technical foundation for personalised omnichannel activities that meet customers where and when they want, on their terms and through their preferred channels. This leads to more complex commerce workflows, which need to be backed up by intelligent integrated marketing strategies. Consumers are sharper and more demanding than ever. Brands and retailers need to be sure to have the technical know-how and skills to succeed. That’s why I suggest finding the right partners before being lost and overwhelmed!
One thing I’d like to add: A concept like “Commerce Anywhere” is all well and good, but at the end of the day, we need to find the right balance between pushing for hyper consumerism (see also the new payment trends such as “Buy Now, Pay Later”) and the sustainability agenda. Without sustainable strategies, this won’t work. That’s why, for me, one of the most important trends in e-commerce is sustainability; without it, “Commerce Anywhere” is not future-proof. The industry should look at how processes can be changed and adapted to be sustainable and environmentally friendly – even more so than before. It’s all about materials used, environmentally friendly deliveries, optimised, bundled solutions, even circular e-commerce. Lengow, for example, can help to reduce return rates by collecting feedback data and using it to improve your product catalogue. Remember that 22% of buyers return a product because it doesn’t match the description, and 23% because the wrong item was shipped to them. Optimisation is key. This is how the future plays out.
Research shows that consumers crave a 3D e-commerce world and an immersive shopping experience. Shopify, for example, announced that products sold online that use 3D and AR technology have a 94% higher conversion rate than products that do not. There already exists a range of AR technologies from which some brands are benefiting, particularly in the luxury sector, where interesting examples include the use of Snapchat. But the metaverse is now (finally) bringing this longed-for 3D retail world in a big way: digital and shared worlds where interactions between virtual inhabitants are enabled, often with the help of avatars, will bring unimagined opportunities for commerce in the long run. Morgan Stanley has calculated that in 2021, the metaverse represents an addressable market of $8 trillion!
The fashion and sports industry (Gucci, Balenciaga, Ralph Lauren etc.) has already made its first attempts at metaverse commerce. For example, some brands offered digital collections for purchase, but for now mainly only in video games or online social platforms. Also consider the rumor that said H&M was to open a virtual 3D store in the metaverse (maybe that will come true soon after all, who knows). Anyway, this brings us to another point: metaverse means gamification. Not only the shoppertainment successes in China, but also the numerous 3D video game worlds and gamified social networks are forcing brands to turn to gamification. Also, metaverse creates an even higher demand for content, where strong strategies are needed. The way you present your products in these universes is crucial.
Since developing and implementing three-dimensional e-commerce experiences requires some expertise, it’s best to think about it sooner rather than later. It will probably be a while before the metaverse brings us next-gen e-commerce, but it is best to try now, because early indications show huge market potential!
I can’t stress it enough: think and act in a more data-driven way than ever before! Look for solutions to better aggregate your data. Be sure to always use actionable product data. The motto: get the most out of your data to stay ahead of the future. For example, we have developed the Insights tool for this purpose, which gives brands and retailers a significant advantage in sales analysis and what steps should be taken in the future to further increase sales. All data-based.
Another aspect, in my view, is replatforming to accelerate the automation of critical and agile retail operations. It comes down to the timely selection of the right technology to deliver the e-commerce features you need. Is the Commerce Management System I’m using future-proof? Is my feed manager sustainable? As I touched upon earlier, it comes down to always being flexible enough to embrace new sales platforms and channels.
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