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The one thing we’ve learned over the last few years is that change is inevitable, and eCommerce is no exception. While the hectic pace of change within the eCommerce world has begun to slow, this is not the time for online brands to rest on their laurels. Instead, now’s the time for them to reflect on past changes and develop strategies to remain viable this year and into the future.

Remaining competitive in the eCommerce world means staying ahead of the curve. To help online brands set themselves up for success, we examined the past and present to provide insights into the future of online shopping.

 Orla Power, Marketing Director at Luzern eCommerce
  1. Brands to prioritise growth of sales on multiple online marketplaces:

As brands look at ways to reach new audiences and increase sales, the use of online marketplaces will continue to grow and their popularity among consumers will see an uptick throughout the year. Adapting to this new competitive multi-channel landscape is the most pressing challenge facing eCommerce brands. Marketplaces bring buyers, brands, and third-party sellers together in one place. Getting it right requires agility, strong partnerships, and clear business goals in order to build the right marketplace strategy and turn opportunities into sustainable, profitable, long-term growth.

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2. Amazon will continue to dominate online sales:

As the world’s largest online retailer, Amazon will remain the platform that eCommerce brands will need to be on in order to survive.  Just prior to the pandemic, worldwide retail eCommerce sales stood at USD 3.35 billion. At the end of 2021, projected sales were estimated to reach nearly USD 5.0 billion with Amazon remaining the most popular retail website in terms of online traffic.

We predict that the ongoing shift in buyer behaviour and subsequent move to online shopping will be the driving forces for brands to continue and even accelerate the pace of their Amazon digital transformation sales strategies, as well as use this as an opportunity to improve their digital commerce operations.

3. Brands will embrace social commerce by using social to test and learn

There has been increasingly higher usage of social media platforms among consumers looking to make purchases. It’s no secret that consumers trust word of mouth – such as recommendations from friends and family, above all other forms of advertising. Gen Z, in particular, are pervasive users of social media, which has positioned social commerce as a breakout trend for eCommerce. The opportunity for social media as a sales channel cannot be underestimated nor should it be ignored. We predict that social commerce will be an important ‘test and learn’ selling channel for brands this year.  However, to catch the social wave, brands will need the ability to move swiftly in order to follow where their customers are with the right online offerings.

4. Headless commerce will provide brands with the freedom to create enhanced user experiences

Traditional eCommerce platforms constrain brands to just the front-end design, while keeping them locked into the rigid processes of monolithic solutions. Since headless commerce platforms (the back end of the platform is decoupled from the front-end) don’t control the front-end design, brands have more freedom to create the type of user experiences they desire to provide.

While not a new concept, it’s only been over the last few years that larger eCommerce ecosystems have embraced the headless model. With online shoppers having little to no tolerance for inconsistent or fragmented shopping journeys, brands will need to deliver on increasing expectations in order to remain relevant. The agility that headless commerce provides will enable brands to deliver the type of experiences online shoppers are increasingly demanding such as fast, easy, and frictionless shopping and checkout experiences – which will also help brands reduce shopping cart abandonment.

5. AI will become more ubiquitous and take on a strategic role in finding new customers

Artificial intelligence (AI) is already revolutionising the online shopping experience and the use of this technology will become even more ubiquitous this year. Early adopters of AI have been able to create and deliver personalised online experiences by helping shoppers visualise products and how the products can meet their needs. Similarly, AI-powered chatbots are becoming increasingly sophisticated in their ability to deliver exceptional customer service.

This year we can expect AI to take on a more strategic role by helping brands find new customers. This will be accomplished through algorithms that will analyse and compare shopping trends in conjunction with brand offerings, examine sales channels as they relate to shopping trends, and deliver the insights brands need to perfect their marketing, sales, and pricing strategies. We predict that brands will take this beyond dashboard analysis and partner with technology providers that can provide the capability for them to take immediate action based on data driven insights. This, however, will require automated functionality in order for brands to proactively manage sales margins, improve competitive standing, and drive online conversions – in real time.

6. Flawless delivery and fulfilment will eliminate the need to manage inventory

As the number of online shoppers continue to rise, ‘last mile’ delivery services will equally flourish. We’re already seeing drone and self-driving delivery vehicles becoming commonplace. However, this change will result in casualties for brands that are unprepared to make the transition.

We can expect to see brands convert to fulfilment hubs and distribution centres for ‘last mile’ delivery, providing both customers and the brand with more flexibility for deliveries, pick-ups, and returns. A clear trend is in the shift from traditional warehouse fulfilment models, as well as the re-modelling of supply chains to third-party logistics and the use of drop-shipping. By using drop-shipment, brands will simply sell the product and pass the sales order to a third-party for fulfilment and delivery – eliminating their need to manage inventory.

The online marketplace is now a shoppers powerhouse, where consumers can purchase virtually everything they need. While the trend towards online shopping has been increasing year-over-year, the pandemic quickened the pace of adoption, changing shopping habits forever. Remaining relevant and profitable today and into the future will require brands to be increasingly agile in order to meet rising consumer demands and adapt to the ongoing dynamics of the eCommerce landscape.

By Orla Power, Marketing Director at Luzern eCommerce

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