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According to a report by Forrester, online sales in the United States alone will be US $523 billion in 2020. The number of users browsing and making purchases online will grow to 270 million by 2020 according to the same report. Forrester believes that one of the key drivers for this growth will come through the growing use of mobile devices.
One of the most interesting aspects of the report centered around the predicted increase in the number of online shoppers by 2020. The estimated 270 million online shoppers by 2020 are based on the advances in technology to produce faster wireless connections and bigger and better mobile devices.
On a global scale, Statistica predicts that retail e-commerce across the world will reach US $4.13 trillion by 2020. What may surprise you is that on a global basis, desktop (or laptop) PC users place more e-commerce orders than mobile devices users do. However, Statistica believes that mobile devices are gaining ground.
So is the growth of mobile devices the only reason that online shopping will continue to grow in 2020? Not as far as we are concerned. We believe there are a number of other reasons why online shopping will continue to grow in 2020 and beyond. Here are a number of the most important influences:
- Social Sales
- Predictive Analytics
- Artificial Intelligence
- Subscription Models
- Mobile Transaction Payments
- Private Messaging
- Improved User Experience
Let’s take a look at each one of these influences in more detail:
Social media platforms have a big influence on online sales. The major players in social media have all developed either their own e-commerce platform or a form of integration for other e-commerce platforms. This should not be a surprise to anyone given the power of social media.
Social media users continue to grow and Statistica believe that by 2020 the number of users will reach almost 3 billion. So the big names are doing all that they can to help with online shopping. Here are some examples:
- Facebook now has a “buy button” that brands can use
- Instagram has a “shop now” button
- Snapchat is planning to develop an online shopping platform
- Twitter now has “product pages” for brands to use
These developments are good news for online shopping retailers and social platforms too. The social platforms are always looking for new ways to generate additional revenue and they are all competing with each other for online retailer ad dollars. Online retailers know that social platforms represent a large pool of potential clients.
The social media networks are working hard to offer online retailers even more options such as the ability to target specific users. It is easy for an online retailer to use Facebook, for example, to identify and target the right people for their offers. All the networks now offer comprehensive reporting for clearer decision making.
All online retailers should connect with the social media accounts that they have to increase their sales. Integration is very important because social media users do not want to leave the platform to purchase an item from an external site. If forced to do this then conversions will be lower.
One of the hottest trends in e-commerce is predictive analytics. It is a very exciting area for online retailers because it provides a range of statistical techniques for the analysis of existing and historical data. You then use predictive analytics to predict what will happen in the future.
You can use predictive analytics with Big Data. Over time successful online retailers build up very large data sets which can be difficult to analyze using traditional data analysis methods because of the complexity and size of the data.
One of the best ways that an online retailer can use predictive analysis is in automation based on the predictions of the actions that customer’s take. This has been going on for some time now and has helped many online retailers increase their sales. A lot of companies now offer predictive analytic tools that you can integrate with e-commerce stores.
There are a number of ways in which predictive analytics can assist online retailers. Email campaigns can be a lottery in terms of the best time to send messages, but predictive analytics can identify these times by crunching the relevant data such as open rates, engagement rates, and conversion rates.
The most successful e-commerce sites know what their customers want and when they want it. Predictive analytics makes this a lot easier for online retailers. It’s a great tool for proactively assessing what customers want and when and has had a major impact on the growth of online shopping over the last few years.
Video has had a significant impact on the growth of online shopping over the years and this will certainly continue. Potential buyers of products and services are turning to YouTube to find more information such as:
- Product reviews
- Product news
- Product hacks
- Instructions on how to use a product
- Tips on using products
- Product comparisons
More people are turning to YouTube for answers about products than using search engines. Online retailers know this and they create helpful videos on their products and services for both existing and potential customers.
It’s not all about YouTube either. Videos are immensely popular on social networks too. Facebook is king when it comes to video engagement with an impact that is 8.4 times higher than the other social networks.
Online shopping brands are now creating videos for both YouTube and Facebook to take advantage of higher engagement levels. The number of mobile users watching YouTube and Facebook videos continues to increase and they will watch brand product videos wherever they are.
Short-form video is the hottest trend because it delivers the best performance. Smart online shopping brands are now creating vertical videos so that viewing on a mobile device is a lot easier. The car manufacturer, Audi, reported an 80% higher completion rate with their vertical videos.
Another significant influence in the online shopping space is artificial intelligence (AI). Brands are now using artificial intelligence to create “dynamic personalization” which learns the online shopping habits of individuals as well as their demographics.
These days’ brands can send out personalized emails automatically using artificial intelligence. The associated AI system drives the different subject lines and content in the emails and this is producing good results.
A lot of major brands have adopted AI to increase their e-commerce sales. An online shopper that receives regular emails from these brands won’t know that around 50% of them have subject limes and content generated by an AI system.
It is impossible to tell the difference between an AI-generated email and one created by humans due to the technological advancements with AI. Online shopping brands are using the power of AI in conjunction with predictive analytics to provide the best possible customer experience.
Why are so many online retailers offering subscription models to customers these days? Because it works! Customers in their twenties are not as wealthy as they used to be despite having higher disposable incomes. This means that large one-off purchases are more of a challenge for this age group.
Subscription models will continue to grow and there will be more available in 2020. The use of subscription models in e-commerce has been around for a few years now and it is a steadily growing trend. It’s easy for a customer to set up a subscription payment and then have the excitement of receiving products each month or using a monthly service.
For examples of successful online shopping subscription models think IPSY for personalized makeup delivered monthly, the Dollar Shave Club for monthly deliveries of men’s shaving and grooming products and Blue Apron for cooking supplies and recipes.
These and other subscription-based online shopping sites make the experience fun for their customers. The thought of receiving a product subscription box is exciting for many and there is a real buzz created in anticipation of receiving this month’s box.
People have less time on their hands these days due to juggling careers and home lives so the subscription models appeal because of their convenience and simplicity. A lot of people would rather sign up to a subscription model and not have to waste their time at the weekends shopping. A lot of subscription models target saving people’s time.
Some of the most successful and well known online shopping subscription models are:
- Ipsy – monthly personalized makeup and beauty
- Dollar Shave Club – monthly shaving and grooming for men
- Blue Apron – cooking ingredients and recipes delivered each month
- Stitch Fix – monthly boxes of clothes for women, men, and children
- Home Chef – fresh ingredients for cooking at home delivered weekly
- Birchbox – another makeup and beauty products monthly subscription
There is no denying the growth of the subscription model in online shopping and a lot of brands that do not currently offer this are looking to do so. Recurring subscriptions are great for the bottom line and expect to see a lot more of them in the future.
Mobile Transaction Payments
With the growth of consumer confidence to make purchases online with their mobile phones and the advances in security it is no wonder that mobile transaction payments have been a growing trend for e-commerce. There will definitely be a continued increase in online purchases using mobile phones by 2020.
Making mobile transaction payments easier, and more and more online stores offering this functionality will drive online shopping sales. Many people like the idea of cashless payments and the wider this spreads on mobile phones and other devices such as wearable devices the more revenue online stores will generate.
Online shoppers already trust mobile transaction payments and they will become easier to perform in 2020 and beyond. The big social networks are taking notice and now they are developing integration with commonly used mobile payment processors such as PayPal and Apple Pay.
Mobile transaction payments have really taken off in some of the emerging markets. Asia, in particular, is experiencing significant increases in mobile payments, and the rest of the world will surely follow.
It seems that the whole world is using private messaging now and smart online shopping brands are taking advantage of this to leverage e-commerce sales. The brands use private messenger services for a variety reasons including:
- Making product offers
- Answering questions from existing and potential customers
- Providing discounts
- Resolving complaints
Online shopping brands are not hiring armies of people to work the messenger services. Instead, they use Chatbots based on artificial intelligence technology to initiate conversations and answer questions.
In recent years there has been major growth in the use of automated live chat. This has provided a competitive edge for a lot of e-commerce businesses and of course, it is very efficient. There will certainly be technological advances in this area by 2020 with machine learning replacing the need for real people to be involved.
A good example of an effective use of a Chatbot with private messaging is assisting potential customers with the offering of products to meet their needs. Bridging the gap between automation and personalization is what it is all about and this will get better and better in the future.
Improved User Experience
The most successful online shopping brands have improved the user experience over the last few years. Online shoppers all demand total user-friendliness when they are browsing or making purchases through online stores. Users expect to see a number of different things including:
- Personalized landing pages
- Useful product information
- Easy to use shopping carts
- Relevant links for more information and purchasing
These things have all steadily improved in recent years and have been a significant influence in the growth of online shopping. Online shopping brands are continuing to improve the user experience in order to delight their customers.
Expect to see major improvements in user experiences by 2020. It is highly likely that you will see less cluttered landing pages and significantly improved navigation. Online shoppers will have help available at every turn and have their questions answered immediately to reduce cart abandonment rates.
Technological advances have revolutionized the world of shopping in recent years. Traditional offline brands have now had to embrace e-commerce to survive and to remain profitable.
The most successful online shopping brands are those that work closely with technology companies for AI solutions and predictive analytics. They also integrate their social channels into their online shopping experience to provide customers with all conceivable options.
With the focus on improving the user experience, the future will remain bright for online shopping brands. Making transactions simpler and easier is what customers want. Online shopping is very popular because it is so convenient. People can just pick up their phones and order whatever they want, wherever they are.
By 2020 there will be more technological advancements in the fields of artificial intelligence and machine learning, predictive analytics and mobile transaction payments. Other advancements will emerge as well which all bodes well for continued growth in online shopping in 2020 and future years.