The state of e-commerce might seem to be no different than it was before 2020, but there have been several developments in the pandemic that will affect the future of e-commerce in the United States and other parts of the world. These trends will impact how companies conduct business for the rest of 2022 and the coming years.
Many of these changes were largely due to the pressures that the pandemic put on many industries to explore other ways to deliver their products and services amid lockdowns and quarantines. Organizations had to quickly explore how digital technology could help them address their business needs. Now, e-commerce is one of the fastest growing industries, with an estimated growth of 19.5% in 2021, and a projected growth of 20.4% by the end of 2022.
The State of E-commerce 2022: Trends and Outlook
Economists and experts have outlined some fulfillment trends that will shape the future of the e-commerce industry. Companies should track these e-commerce trends and predictions and plan their strategy based on their analysis so they can manage customer loyalty, product or service demands, and brand improvements.
The Growth of Subscription Business Models
Early in 2020, subscription offerings increased in demand due to lockdowns and stay-at-home orders. There was a 90% growth in subscription sign-ups, and there was no sign of it losing steam: there is now an increase in demand for curated subscriptions, as more consumers prefer personalized e-commerce customer experiences.
Subscription business models require businesses to significantly change their fulfilment strategies. For one, subscription boxes demand packing and subassembly processes that require more time. Companies need to discuss these new strategies with warehouse associates and other team members if they plan to follow the subscription business model.
The demand for same-day deliveries has also increased, and many businesses intend to offer it within the next two years. Forty-nine percent of shoppers say that same-day delivery is one of the main reasons they prefer to shop online, and 61% are willing to pay more for the service. This is good news for many companies, and one of the reasons why 51% of retailers offer it.
Omni-channel e-commerce makes it easier for consumers to purchase and shop for products across different channels or mediums: from mobile devices, and laptops, to brick-and-mortar stores. Businesses that allow omni-channel selling and cross-channeling for purchases will likely influence more consumers to buy things online.
Ever-Increasing Returns Management
With the increase of e-commerce purchases, product returns have also increased. This has pushed companies to expand their returns management processes, as the collection, organization, and restocking of returned purchases has become a part of the process. Having a fulfillment management system that allows warehouse workers to handle both deliveries and returns would make the whole thing run faster.
Some companies have also started to offer product bundles, in which several products are sold together as part of a package and sold as one unit. This strategy is used to encourage consumers to buy more products, allowing companies to restock their warehouses.
Broadening of Supplier Base
Suppliers are no longer limited to local companies; instead, companies now have the option to explore overseas suppliers. Having more suppliers will also lessen the likelihood of delivery delays due to a shortage of drivers or products. Brands and companies that have several suppliers can meet their customers’ demands better, which leads to increased customer satisfaction.
The Gross Market of E-commerce
Globally, the e-commerce market is expected to reach $5 trillion in 2022, which means that the global e-commerce market will continue to grow and become a viable option for many businesses.
Furthermore, e-commerce is expected to take up more of the retail market shares and analysts are forecasting that it will take up 22.3% of total retail sales, which are expected to reach $6 trillion globally by 2023.
Retail and E-commerce Comparisons
As COVID-19 infection rates continue to go down, more people are trooping back to physical stores. And while shoppers are going back to shopping as they did in 2021, online shopping is not about to go down to pre-pandemic levels. Companies will continue to invest in digital technology, as blended shopping experiences will offer consumers options on the kind of customer journey they want to take.
Companies that want to expand their e-commerce would need to pay attention to customer pain points such as payment, shopping cart abandonment, and delivery issues. This is where customer management systems and digital warehouse platforms come in handy to improve how businesses handle these issues.
Different E-commerce Sales Channels
E-commerce sales channels also continue to grow, with various sites such as Amazon, Shopify, and eBay offering retailers the chance to sell their products directly to consumers. Although companies can develop their own shopping apps, these bigger sales channels provide access to a more diverse set of consumers who are more inclined to buy products online.
Augmented Reality and Virtual Reality in E-commerce
Augmented reality, or AR, uses computer-generated inputs to enhance a user’s buying experience. These inputs may include audio, video, and even GPS overlays to create digital content that responds to real-time changes. Virtual reality (VR), on the other hand, is a computer-generated environment where a user can immerse in.
The use of AR and VR in e-commerce improves customer experience because it allows customers to ‘experience’ products and services before they decide to purchase them. Using AR allows customers to preview products, reducing the chances of choosing the wrong product, size, or color. Ultimately, this reduces the instances of returns and exchanges.
What’s Next for E-commerce
The continuous growth of e-commerce will largely depend on product exploration and discovery. Brands that want to improve and expand their customer service need to provide clients and customers with more information and details on their product pages. Ideally, product pages should include either AR or VR to encourage interaction with the products, as well as detailed explanations regarding their ingredients and manufacturing process.
The competition for fulfilment management will also be one of the challenges in the next phase of e-commerce growth. Consumer demand for same-day deliveries, lower shipping fees, and more options such as pick-up and multi-channel sales will likely become the priority of many brands that want to expand their e-commerce.
Improving logistics and enabling multiple delivery modes could also improve customer service. Companies can explore this further by experimenting with customer options and trade-offs such as incentives, lower or free shipping costs, and various choices of fulfilment modes.
Brands should also take advantage of digital warehouse platforms such as Hopstack, a fulfillment operating system designed for the efficient management of orders, deliveries, and returns. Warehouse associates will not be burdened by long lists of deliveries and schedules; instead, the platform will enable the completion of deliveries and optimize the process end-to-end.
Fulfillment remains one of the challenges in e-commerce and retail, and brands must acknowledge that addressing delays and returns could improve customer experience and increase the likelihood of repeat customers and buyers. Transparency in communications regarding timelines will also help manage customer expectations, but it is best to find new methods and tools to resolve these situations.
The Future of E-commerce
One of the good things that came out of the pandemic was the quick shift to digital technology by retailers. E-commerce sites increased their sales, and this positive impact of COVID-19 on e-commerce cannot be denied: the pandemic forced consumers to explore digital alternatives to their shopping needs, and e-commerce was the answer. If companies want to be part of the future of e-commerce after COVID-19, they need to accept that they need to explore digital solutions for their customer service and fulfilment systems.