E-commerce has come a long way. From CompuServe in 1969, which introduced e-commerce through a dial-up connection, and later Michael Aldrich in 1979, who connected a transaction-processing computer with a modified TV through a telephone connection, to Black Friday and Cyber Monday later this month, where transactions in trillions of dollars -- expected to touch $4.5 trillion in 2021-- will be made over mobile phones, laptops, tablets, PCs.
The advent of mobile phones gave a major push to e-commerce. According to data from Statista, “By 2021 end, 73 percent of all e-commerce sales are expected to be conducted over mobile phones.” Widespread use of wi-fi and data getting cheap were factors that helped in the further spread of e-commerce. And finally, the Covid-19 pandemic which forced most of the people to stay indoors forced people to adopt e-commerce to buy almost everything online.
So, Where Does E-commerce Go From Here?
According to my opinion, e-commerce will witness a myriad of interesting changes, and innovations, going forward. Wider acceptance of subscription-based services, greater use of Augmented Reality (AR) and Virtual Reality (VR) to visualize products, greater and more focused use of big data analysis to target customers for more personalized selling, use of voice assistants, use of e-commerce delivery drones, to social media e-commerce, the list is getting longer by the day.
China and US, in that order, are the largest e-commerce markets, at an estimated $1,343 billion (globaldata.com) and $431.6 billion (Statista Digital Market Outlook), respectively. Now, China has the world’s largest elderly population. In May 2020, China had over 264 million people aged 60 or more, constituting 18.7 percent of the population. That’s a huge chunk of prospective e-commerce customers. Noticing this, Alibaba Group’s online marketplace Taobao rolled out a new version of the shopping app that’s more accessible for senior users. This ‘senior mode’ has larger text and icons, simplified navigation, and voice-assisted technology, which allows senior citizens to search for products using voice commands.
Taobao is also known for having rolled out the innovative ‘pre-order event’ or the ‘Double 11’ ahead of its annual Singles Day Shopping Festival, similar to the Black Friday in the US, and which raked in $56 billion worth of sales in November 2020. Taobao also integrated a video live streaming platform into its sales process, which helped customers interact on a real-time basis with the sellers. Going forward, e-commerce customers in India too can expect interesting features. One of these could be the ‘bargaining’ feature, where buyers would get the opportunity to quote their own prices for the products put on sale online.
Currently, customers have been using the services of virtual assistants such as Google Voice Search, Amazon Alexa, Cortana, Viv, Google Home, and Siri. Going forward, voice search will become a big driver of e-commerce. According to Google, more than 20 percent of mobile device queries are based on voice, and over 40 percent of millenarians do their searches via a voice assistant.
The Personal Touch
E-commerce, aka, online shopping obviates the need to travel to a market, jostle with the crowd, especially during these Covid times, and make the purchase. A few clicks on your favorite gadget and the product is delivered at your doorstep – hassle-free. Yet, this type of purchase has a major drawback – you don’t get the touch and feel of the product. AR and VR now come to the rescue – these technologies provide the customer with a 360-degree view of the product or service (such as a tourist destination), and the ability to see how the customer would look, wearing the product. Already there are apps that let the customer visualize wearing a dress, footwear, lipsticks, and the like, without having to touch the product. This trend of e-commerce transactions using AR and VR will gain wider acceptance, going forward.
Drones, Multi-Layer Distribution Channels and FDFC
Drones are finding use in an increasing number of industries. E-commerce will be one, going forward. According to some experts, drones will replace delivery persons by being able to deliver products faster than humans. That will be a win-win for both the customers and the company.
Going further in this direction, since customers like to receive their purchases as soon as possible, multi-layer distribution models, hyper-optimized supply chains, and software-led fulfilment centres will be more widely used by e-commerce players, going forward.
An extension of faster and more focused delivery of products to customers is the Forward Deploy Fulfilment Centre (FDFC). This small fulfillment center, which could consist of automated lockers stocked with certain regular and common purchases of the customer, would be intimated to the customer as soon as it reaches the locker.
Analytics and E-commerce
Analytics, an important element of e-commerce, is the process of gathering data from sources that impact the e-commerce store and analyzing it to understand the trends and shifts – both positive and negative - in consumer behavior. This helps the e-commerce player to make data-driven decisions aimed at giving a push to online sales. For instance, the French e-commerce website showroomprive.com used forward-looking analysis to manage the churn in customers. Analytics helps the company to craft precise marketing campaigns and keep customers from shifting loyalties. Going forward, this trend will gather pace, say, industry players.
Finally, in the future, personalization would move further ahead from a computer-generated voice saying ‘Hello’ followed by your name. The use of smart-website, machine learning, and online tracking technologies will help offer personalized services at a level not envisioned at this time. This could see the personalization of products at a mass scale. Now, that would bring the circle of e-commerce to a kind of completion – from cobblers making shoes to the personal specification of the customer to mass-produced personalized products being sold through e-commerce.