by Greg Chapman
We are currently in the midst of a major transformation in the world of ecommerce. The 2010’s brought with them improvements in technology that have revolutionized how the world thinks of ecommerce, improving the overall online shopping experience. The growth of ecommerce shows no signs of slowing as we make our way through the 2020’s, with ecommerce sales projected to reach $892 billion by 2022.
As ecommerce sellers work to stay competitive throughout the decade, it is inevitable that more changes will impact the way consumers make purchases and how businesses sell online. This is the year where businesses should take note of the trends that are poised to have a lasting effect on ecommerce as we inch closer to 2030.
Here are five trends that ecommerce retailers can expect to make an impact on their selling strategies over the next few years:
Ecommerce platforms need to work with marketplaces or continue to be forced out.
Over the past few years, we’ve seen consumers take a sharp turn toward a marketplace-first approach to online shopping. It is expected that this shift in consumer habits, coupled with increasing and changing online sales tax regulations, will continue to make marketplaces an ideal channel for merchants to avoid the added cost and management of tax compliance on online sales.
As a result, many traditional ecommerce providers are starting to offer more “Amazon-like” experiences, such as fulfillment services and expanded payment options, to stay relevant. Ecommerce providers that fail to align with the consumer expectations set by marketplaces will quickly face the risk of losing customers.
Marketplaces will continue to move from “Sell Through” to “Sell To.”
Another way marketplaces are poised to impact ecommerce this decade comes in the form of how marketplaces are operating. Historically, marketplaces have been a platform for third-party sellers to promote and sell their products to a broader audience. However, as marketplaces have increased in popularity and states have focused on treating marketplaces like a single retailer vs. a collection of sellers, marketplaces are being treated more like direct retailers.
It is likely that we will see marketplaces be forced to sell more products directly to customers as the merchant of record given the increased tax obligations being placed on them. For example, marketplace facilitator laws in the U.S. require the marketplace itself to collect and pay sales tax to the states on behalf of third-party sellers. Given the prevalence and popularity of marketplaces among consumers, ecommerce sellers should prepare for increased competition from marketplaces when it comes to commonly purchased products.
Omnichannel will become a requirement as ecommerce goes global.
With marketplaces serving as a perfect example, it is no secret that consumers have a world of options at their fingertips, which has made convenience a top priority for ecommerce shoppers. Whether a shopper is making a purchase from their smartphone or at their desk at work, from a store in their town, or from across the world, they expect a frictionless shopping experience from beginning to end.
According to an IDC report, cross-border ecommerce sales could account for more than 15 percent of the world’s online retail market by 2022, which means that ecommerce merchants are running out of time if they haven’t adapted their selling strategy to include more channels in more countries.
On a global scale, customers are flocking to new devices and channels for shopping, driving up the need for technology integrations that make it possible for retailers of any size to expand their reach and sell their products across multiple channels. Ready or not, businesses will be forced to adopt an omnichannel approach to provide more convenience while maintaining a seamless shopping experience from in-store to online to social media to mobile devices, and beyond.
Business systems will need to be interconnected.
While omnichannel is quickly becoming mandatory for retailers, to truly adopt an omnichannel approach, businesses will need to leverage technology that connects all payment touchpoints with customers. If a retailer sells in-store, through a website, and on a marketplace, there are potentially three disparate business systems that are collecting customer, product, and other transaction data. The ability to aggregate, share, and manage data across systems will be critical to providing a high-impact and seamless customer experience across channels.
Peer-to-peer selling will continue to grow.
Aside from changes to traditional ecommerce platforms, new ways of purchasing goods and services stand to shake up the way we shop digitally as we know it. The popularity and widespread adoption of the sharing economy model with popular services like car-sharing, home rentals, and more have rapidly increased over the past few years.
Under the sharing economy model, businesses and individuals have the ability to sell directly to and build relationships with customers. Due to the convenience and personal nature of this approach, we can expect more business verticals, especially automotive, fashion, and home goods, will move towards new, innovative selling models over the next several years to keep pace.
While the shopper today may differ from the shopper five years from now, it is likely that the trends we are seeing today will have a lasting effect on consumer habits and ecommerce strategy for the foreseeable future. For online sellers, adopting ecommerce technology that can easily integrate into their existing business systems should be a top priority to ensure that they have the infrastructure in place to quickly adapt to changes as they happen.
Greg Chapman is the SVP of Business Development at Avalara.