Spring has sprung, and Q2 has taken root. As March comes to a close, the e-commerce industry remains dedicated to continued progress in technology, sustainability, and competition. Brands must put their focus on innovative solutions to remain competitive, as US e-commerce sales are expected to hit $1 trillion this year. The type of goods and experiences consumers are willing to buy online has been impacted by the growth of the industry, especially through new technological mediums like the metaverse. The e-commerce industry as a whole is expanding inwardly and outwardly; the question now is, how will consumers respond to the progression of e-commerce in their lives?
Here are the key industry takeaways for the past month:
The Metaverse (and everything in it) has taken the world by storm by creating a whole new world, this time virtually. The metaverse is making moves to combine the physical and digital world of commerce. With e-commerce, convenience and access gain precedence over the physical experience. The metaverse is bringing technology into the material world. AR shopping and virtual try-ons are just the start of metaverse technology integrating with e-commerce. Re-conceptualizing e-commerce to become more experiential to include human connection is also turning into a huge priority. The e-commerce industry had to reestablish itself to focus on the consumer experience through virtual spaces. That’s why social media sites like Twitter are introducing social commerce options for businesses within the established site to target consumers. Utilizing social commerce gives consumers options without being pushy or overwhelming. Consumers are able to shop similarly to an online marketplace, but from the comfort of an app they already know and love. This means that customers are more likely to see relevant and exciting products to try. The metaverse also supports cryptocurrency as payment. E-commerce businesses have to decide if adding cryptocurrency is an alternative form of payment as more and more consumers begin to adopt the practice. Almost half of US consumers have invested in cryptocurrency during 2021. Non-fungible tokens (NFT) sales have also increased significantly, and NFT specific marketplaces are beginning to emerge online, making e-commerce bigger than ever. Are you venturing into the metaverse?
E-commerce Marketplaces Struggling for Power
Competition is heating up. Amazon and Shopify, the two biggest e-commerce platforms in the US, have been in a power struggle recently. For retailers, this is big. Amazon's focus is on the end customer rather than the merchant, sometimes working in direct competition to the products that merchants are selling by introducing similar products at a lower price. Shopify is gaining retailers who leave Amazon's competitive field as it focuses on merchants as customers. As this rivalry heats up, Amazon and Shopify could be making changes to their marketplaces to compete with one another on a more direct playing field. But one thing is for sure: DesktopShipper can manage any marketplace with our Shipping API!
Sustainability and Instant Gratification
Consumer behavior has changed rapidly with the changing circumstances of the world. At the same time, sustainability concerns have emerged at the forefront of consumers' and retailers’ minds. With the rise in e-commerce, increased shipping and carbon emissions are contributing to climate change. Our health and the health of our planet are affected by the instant gratification and consumerism that drive shoppers and retailers to avoid true efforts in promoting sustainability. Change must come from all levels: shippers, carriers, and shoppers. Shifting how we shop will help sustainability to flourish. Another way that sustainability can rise in e-commerce is in reverse logistics. According to the article by Helen Atkinson at Supply Chain Brain, 16.6% of total US retail sales are returned by customers. Implementing and reporting sustainable reverse logistics helps companies gain credibility with consumers. Technology that helps with visibility in the front and back end of the organization is a helpful first step. However, it is vital to have people who understand sustainable practices based on the data from that technology. Reducing waste in the supply chain comes from both people and technology. What sustainable practices are you working on?
Cross-border trade is an essential part of growing your business but it is also very complicated. VAT regulations and managing costs of goods are just a few things that impact e-commerce. With the pandemic, global supply chains have been disrupted and international e-commerce has become more difficult along with the added changes of Brexit and the EU. International selling for e-commerce allows businesses to enter a larger market and stay ahead of competitors, adapting to changes. Cross-border trade should be on your radar, but consider these problems: cost, VAT rules in the EU and Britain, and the learning curve surrounding tax law, language barriers, and unknown markets. Read the International Shipping Guide to master cross-border logistics now!
A report titled Digital Economy Index, published by Adobe has found that consumers have spent $138 billion online in the first two months of 2022. In part, these increased sales numbers can be attributed to the continuous inflation of the past 21 months. Over two years, $32 billion of growth in e-commerce sales has been the result of higher prices over more purchases. However, e-commerce demand remains robust. Because of this high demand, businesses need to make room. Using physical stores to help fulfill orders can benefit omnichannel demand. In the last two years, consumers have seen 60 billion out-of-stock messages, but also have seen growth within "curbside pickup" and "buy now, pay later" features.