by Don Lowe, CEO, and Co-Founder at Forbytes
When was the last time you bought something online? A few minutes or a few days ago? It probably wasn’t too long ago and perhaps you’re even doing it right now while reading this article. Nothing special, you are just one of the nearly two billion digital buyers from all over the globe, and this number keeps growing.
The digital economy is expanding and occupies many different aspects of our lives. What can be more convenient than the ability to buy and sell products and services using just a few clicks? Online sales are expected to reach up to $5 billion in the next two years, which is almost twice the amount we saw in 2018. This means that our engagement with the e-commerce world is just going to grow. As for smartphones, Forrester predicts sales of over $175 billion by 2022. Quite impressive, isn’t it?
The industry is growing, the industry is changing, and it is quite exciting to change with it. In my company, Forbytes, we track everything that is going on in the e-commerce arena and enjoy the creative process of implementing new ideas into our solutions. More companies are coming to us with a need for digital transformation, they are looking for advice and guidance on technical solutions to business challenges in the e-commerce area, and this is the point where we are ready and willing to help.
There are a lot of myths about the e-commerce industry, such as robots will do all our jobs in the near future and we will be able to make payments using the power of our minds. I want to talk about real trends and the most popular decisions currently being made in e-commerce. What is actually being built and used in existing markets and what we are using in our projects. It is quite possible that you will find these trends and practices being used on your favorite online shops or, as a developer, you will be working with them on your own projects.
No gains without multi-channel approaches
There are no more borders in e-commerce. If you want to succeed, it is not enough to find a client and invite them to come to your store: your store needs to go to your clients. More than ever before, e-commerce enterprises need more than just one channel to make their business successful online. The 2018 Omnichannel Buying Report showed interesting statistics: 45% of customers prefer to shop in branded stores online, 65% like brick-and-mortar stores. A huge part of the online buyer community prefers Amazon (78%), eBay (34%), and even Facebook (11%). The same report shows that customers spent 69% of their income online, which is good news for us and especially for e-commerce merchants.
To scale your business in this industry, your company needs to be available on as many channels as possible and cover as many sales markets as possible. According to our experience, a combination of at least two approaches gives good results. Let’s take Trademax as an example. Trademax is the biggest online retailer of furniture and interior design in Scandinavia. We have been working with them for almost seven years and helped them to grow via the use of a multi-channel approach. The result was (and still is) significant. From a small family company, it grew into a huge online retailer with a turnover of nearly 100 million US dollars and an annual growth of around 35%. We created a multichannel platform for them that is able to manage online stores in different countries: Sweden, Norway, Finland, and Denmark. Trademax also has offline shops in these countries which compliments the customer buying experience and helps to improve business results.
New e-commerce concepts to keep your eye on
Let’s have a look at the new approaches and concepts that are helping e-commerce businesses push the industry forward and making its players more creative. Our first example is drop shipping. Drop shipping is a fairly new and important component in making your business model more convenient for the customer. Its main purpose is in ensuring that the supply chain between production and the end customer is more direct. E-commerce businesses act as the bridge between supplier and buyer. Through your e-commerce platform, the customer buys from you, and the product is delivered directly from the supplier/producer. According to the 2018 State of the Merchant eCommerce Report, 16.4% of online shops are already using drop shipping. That helps them to expand revenue by 32.7% and increases the average conversion rate by 1.74%. This approach has a lot of advantages, not least in making sure businesses don’t spend money on storing inventory and reducing overhead costs.
Another example of an interesting e-commerce approach comes from our long-term client-partners Offerta. The Offerta service marketplace is both B2B and B2C and helps customers find reliable companies covering a wide range of services, from cleaning to renovating or building your house or office. They were the first company to use this concept in the Swedish market. With our focus on delivering business value through the use of technology, we have been able to contribute to Offerta’s continued growth and success. Today Offerta is Sweden’s largest marketplace for service providers. With their support, over 28 thousand service companies in 140 sectors are able to find their clients. So far, Offerta has provided more than 1,400,000 services from companies to clients, and even inspired competitors to create similar businesses.
Mobile adaptation in the spotlight
All digital commerce is currently moving towards mobile devices, more precisely – a mobile-first approach. Research shows the number of smartphone users keeps growing, and users spend on average over 5 hours on their mobile phones every day. Over half of online shops’ clients confirm they use a mobile device to look for new brands and products, and that is a large potential audience for any e-commerce business. Google research shows over 40% of online transactions are now done via smartphones, which means that mobile e-commerce applications are not just a passing trend but a real source for additional profit.
The mobile-first approach is a software development method where the solutions are built with mobile devices in mind and are the base for all further development. That means, designing your solution first to work for mobile devices, then to work for desktop devices. We always advise our e-commerce clients to take a mobile-first approach for developing e-commerce software solutions. For example, we carried out research for Offerta and found out that more than half of their B2B customers offer services via smartphones. Therefore, UI/UX expertise is critically important when developing for mobile devices. There is limited screen space available to display information about the product or service. Presenting information that results in exceptional conversion rates is both an art and a science.
Of course, there are the rock stars of exciting technologies amongst e-commerce trends that promise to change the industry dramatically. Most of these approaches are still in their early stages and should be considered carefully before implementing them into your businesses to ensure that they deliver value. For example, we are currently testing Voice Control for some of the functions on one of our client-partner’s website. Voice control may be a good opportunity for e-commerce business because of the buying trends being set by Alexa or Google Home devices. So far, over 20% of search requests are made via voice, and experts predict this to be at 50% by 2020. Voice control requires long-tail keywords since voice search requests are usually longer than typed searches. So, we need to find out how the technology will work for different types of businesses – in our case for Offerta.
Augmented Reality (AR) will keep growing. It can solve difficulties that e-commerce companies face more and more often. With AR, customers will be able to try on a product to see if it suits them, interact with products and make an informed choice. Supposing you need to buy a new sofa but not sure which one you want the most. You download the app from a retailer, choose different sofa alternatives, and via the app see how exactly will look in your apartment. This method is working already, and we are planning to use it for Trademax.
And the icing on the cake, Artificial Intelligence (AI). Using Artificial Intelligence can simplify work that involves analytics and big data in your business. Personalized user experience, chatbot conversations, sales analysis, and even reliable forecasts are all aspects of Artificial Intelligence that can be used in your business. It is a tool that should not be underestimated. In order to create a functional and robust AI tool, you need to have a good data base. A lack of relevant data will lead to incorrect conclusions and erroneous actions. We are using AI approaches to build more reliable analytical tools for user behavior that will help us to improve the sales process in the future. With the help of AI, we are able to help people create a more concrete and specific request for services. Thus giving them better experiences with our client-partners e-commerce services. We can even analyze the probability of whether the users will continue to use and work with the platform. With this in mind, it will not surprise me when e-commerce enterprises start employing AI specialists.