Jun, 2021 - By CMI
It is impossible to overstate the importance of e-commerce in the modern world. This has only become clearer over the last year. Due to the COVID pandemic and the restrictions put in place to fight it, many have turned to the internet for all their shopping needs. But what comes next? What does the next stage of the e-commerce revolution look like, and what is shaping the future of this growing industry? Today, we look at some of the most significant factors impacting the development of e-commerce. Learning more about them can help us predict the direction in which the industry is going.
E-commerce has been a growing industry for years, and it shows no signs of stopping. But how it develops from here on out will depend on several factors, including:
Amazon is one of the most visited websites on the entire internet and easily the biggest name in the world of e-commerce today. And it has only grown more influential over the last year. Its very existence has a huge impact on day-to-day business, even offline. As Amazon starts to branch out, doing its deliveries and marketing, it is even threatening to overtake businesses in branches outside of e-commerce. Other e-commerce websites need to find creative ways to compete with a giant like that. Some companies are trying brand marketing, focusing on better customer relationships, or targeting particular demographics that Amazon may not cater to. It is still unclear which of these tactics works best, but whichever wins out will indeed have an impact on the future development of e-commerce.
E-commerce businesses respond to their customers behavior. As consumer behavior changes, so do the industry. Among the the most significant changes we're witnessing right now is a greater shift toward e-commerce (as opposed to retail) in multiple categories and a greater focus on price. Businesses will need to adapt to this, perhaps by providing more diverse products or offering better and more frequent discounts; either way, what people buy, how, and why will undoubtedly shape the future of e-commerce.
Every business relies on marketing, but like all other industries, marketing is going through changes too. More and more businesses (e-commerce and otherwise) are turning to digital marketing. In the long run, this focus could end up favoring certain types of products or a certain demographic of consumers, as well as changing the way relationships are built between businesses and consumers.
Many economists and other experts are predicting further economic instability in the future. Even if this doesn't come to pass, the very threat may change the behavior of consumers. People may feel like they need to save more and cut spendings, focusing less on luxury items and more on bare necessities. While some industries (such as real estate and banking) won't be affected by this, e-commerce businesses definitely will, as most deal in non-essential goods.
E-commerce doesn't exist in a vacuum; instead, it is closely tied to many other industries such as web development, logistics, and commercial production. Changes in these industries will, therefore, affect how e-commerce companies do business in the future. For example, if you have an online store in WordPress, you may switch to a different platform in the future because while WP is a good platform for beginners, new and arguably better options are being developed all the time. Furthermore, production automation and improvements in the supply chain management and new delivery methods will all have an impact on how, how well, and how fast e-commerce businesses operate.
A considerable a portion of e-commerce happens online. But once the order is placed, the product still needs to be delivered somehow. This part of the business is very much not in the digital sphere, but the logistics industry is also going through a revolution. Automation is on the rise, and there are many initiatives to improve the sustainability of supply chains. New modes of transportation such as drones are also being tested for e-commerce deliveries. Improvements in these branches of the industry could lead to improvements in e-commerce as well.
The coronavirus pandemic has taught us that businesses can operate in many different ways. The gig economy, which was popular even before this, is almost certainly here to stay; more and more people are working from home, many businesses are adapting to operating with skeleton crews only, and freelancing is becoming an increasingly popular mode of employment. If these trends continue, they could affect the day-to-day workings of e-commerce businesses too.
It is difficult to speculate what the future brings when the world seems to be going through a period of significant change. However, there is one thing we can be sure of: e-commerce has not yet reached its peak. The share of e-commerce businesses in retail is only growing, and we can expect this trend to continue. Some of the questions we still need to ask are:
Since it is impossible to say with certainty what the next stage of the e-commerce revolution looks like, the best thing you can do is stay informed. Invest in regular market research to learn more about what your customers are looking for and what your competition is doing. Try to stay on top of trends to not fall behind because catching up will be difficult. Finally, don't be afraid to take some risks. Shape your own future rather than just waiting for it to happen.