The Future of Ecommerce
While it may be hard to believe, ecommerce as we know it has only been around for 25 years.
Its influence on today’s way of life — where you can buy almost anything online and have it shipped to your door in just a few days, or even hours — has transformed the retail business, and the current pandemic has pushed it to new heights. In fact, the latest Retail Ecommerce Trends Report published by the U.S. Department of Commerce showed that in Q3 2020, nearly $1 in every $5 spent came from orders placed online. Consumers are expected to spend $709.78 billion online in 2020, an 18 percent increase from last year.
Read on to learn about how ecommerce became what it is today, and how it will change in 2021 and beyond.
The Road to Ecommerce
We’d be remiss to talk about where ecommerce is headed without discussing where it all began.
The groundwork for electronic commerce was laid by the development of the Electronic Data Interchange (EDI) in the 1960s. This system allowed for the digital transfer of business data between two companies’ machines. It wasn’t until 1979, though, that online shopping was conceived. It was pioneered by a man in the U.K. named Michael Aldrich, who connected a TV to a computer via a telephone line after reportedly thinking of the idea on a regular trip to the grocery store with his wife, where he wished you could order what you needed through the TV.
A few years later came the World Wide Web, which was made available to the public in 1991, the same year that the National Science Foundation lifted its restrictions on commercial use of the internet, allowing online shopping to flourish.
Just four years after that, in 1995, Jeff Bezos founded Amazon, revolutionizing ecommerce. Started as an online bookstore, now the retail giant sells everything from furniture to food, raking in over $280 billion in 2019 alone. Key to Bezos’ success when he started were a few factors: One, Amazon didn’t have the same physical limitations as brick-and-mortar bookstores, allowing it to offer many more products for sale; two, the customer-oriented nature of the website, complete with user-generated reviews, was the first of its kind and fostered trust; and lastly, when Bezos launched, he had virtually no competition in the ecommerce space.
Another modern-day ecommerce giant, eBay, also launched in 1995. Created by Pierre Omidyar as AuctionWeb, the site — which was "dedicated to bringing together buyers and sellers in an honest and open marketplace” — allowed everyday people to sell items online. Today, the number of active buyers worldwide on eBay clocks in at 183 million, and as of Q3 2020, it saw $25 billion of gross merchandise volume.
Looking Ahead
Despite its relatively short history, ecommerce’s role in retail business today — led by Amazon and eBay — is major. And as its practices continue to evolve to cater to consumers, what can we expect for the future?
Here are a few predictions to consider:
- Buyer preferences have evolved, and ecommerce sellers need to adjust.
- Consumers are smarter — and more informed — than ever before, and the ecommerce experience you provide to them needs to reflect that. This means creating a mobile-first strategy, personalizing the shopping experience and developing relevant content marketing that focuses on video to win their business.
- Brand awareness is still important, but in a different way.
- In the past, brands were important from a familiarity standpoint. While that’s still important, consumers are now looking to brands that resonate with their own personal beliefs concerning factors like sustainability and diversity. And with the internet at their fingertips, they can do their research. This opens the door for an increase in private labeling, or white labeling, when one company produces the product but another company sells it under its own brand.
- New technology will better ecommerce customer service.
- Recently developed tools, including augmented reality (AR), artificial intelligence (AI) and chatbots, will continue to make the online shopping experience more multidimensional and effective. AR allows the company selling online to give the customer an experience that they may miss without being in a brick-and-mortar store, while AI and chatbots allow the company to function more efficiently and cater to the customer in an individualistic way.
- B2B ecommerce will continue to grow.
- Ecommerce gains are not relegated to just B2C transactions; a rising market for B2B business, led by SaaS companies, allows for the new technology mentioned above to automate tasks and make businesses more profitable. Amber Engine is one of those companies — learn more about our PIM here.
And What About Marketplaces?
With the growing popularity of online sellers like Amazon, what does the future of marketplaces look like? And where will people buy products in the future?
While there’s been plenty of discussion about whether physical retail stores will become obsolete in the ecommerce era, it’s clear that a hybrid version of shopping — with both a physical component as well as the ease of online transactions — may be the way of the future. Take Amazon, for instance, who is digital-first but has opened physical retail spaces, like bookstores and a grocery store; or traditional brick-and-mortar retailers like Target who are succeeding online in the Amazon era: A combination experience provides the consumer with the best of both worlds.
Leaning into current ecommerce best practices will help you succeed in today’s retail environment. Let us help you get there and schedule a demo today.
Alex Borzo
Writer at Amber Engine
A brand can only communicate with messaging behind it, and that's where Alex Borzo comes in. A digital content marketer with a decade of experience, Alex's expertise shines in the research and writing she does for dozens of clients. When she connected with Amber Engine, it was a natural fit—AE had ambitious plans to provide their audience with even more valuable content to win in ecommerce, and Alex's background working with SaaS innovators positioned her to jump right in. The result? Brands and distributors are now discovering AE and all the best tactics to get to Amazon and other online marketplaces in weeks instead of months.