In 2020 alone, 25% of the total global population access online retailers to make consumer purchases. With a further one billion people primed to come online in the next five years, we are witnessing a significant paradigm shift in the way people spend their discretionary funds and choose to access products and services. In the United States, eCommerce sales are projected to reach the figure of $740 billion as early as 2023. Global circumstances have combined with the increasing proliferation of technology to drive global eCommerce sales up to a figure of $4.2 trillion dollars, a sum that is only projected to increase.
Here are take a look at some of the major decisive trends and factors that are driving the eCommerce revolution, and at how businesses in the process of transitioning to a robust online consumer service can bring themselves up to speed.
The shift away from brick-and-mortar is in evidence across world markets. In the realm of finance, there has been significant uptake of new challenger Fintech organisations. These “app” banks offer innovative banking solutions such as integrated digital wallets, and are rapidly beginning to out compete traditional institutions. Banks like Starling and Monzo also offer commission free, instantaneous international transfers of funds. This suits modern professionals who often travel for work. The Fintech sector is also leading the charge in uptake of crypto currencies and the use of NFTs for their customers.
This trend is also evidenced in the global gaming sector, which is currently valued at $227 billion. This market is increasingly deriving a significant share of its profits from online gaming. Approximately 25% of its revenue are drawn from the digital marketplace, and this is projected to increase by over 11% year-on-year as the decade progresses.
Technologically savvy professionals and digital nomads increasingly favour the online medium as a way of accessing games and entertainment products. The on-demand nature of these services makes playing online casino titles like roulette far more appealing to this demographic. While traditional physical casinos are still able to offer up unique experiences, in a growing attention economy the emphasis is increasingly placed on bringing the product to the consumer, not the other way around.
Much of this shift in recent years is being driven by members of Generation Z, otherwise known as the “Internet generation”. Born after 1996, members of this cohort are the first generation to have grown up in the information age. Accordingly their baseline literacy for technology is significantly higher than their predecessors, including Millennials. In fact, a recent study found that a staggering 98% of Generation Z members own a smartphone. With 40% of the global workforce, as of 2020, made up of people from this generation, it becomes clear to see why aggressive investment in eCommerce will become increasingly significant as the decade progresses.
The future is social
Social networks have ushered in an unprecedented new era of connection between organisations and individuals. At their heart, the business model that drives the major social networks, as well as search giant Google, is one of targeted advertising. In exchange for access to their services, platforms such as Facebook actively collect detailed information on our likes, dislikes, opinions and preferences, in order to build a sophisticated marketing profile unique to each user.
This data is invaluable for eCommerce, where one of the greatest challenges is discoverability by users. By utilising the advertising tools available on social networks, brands can target specific consumer demographics with extremely high degrees of precision. Developing some literacy in the use of these tool kits is an essential component to successfully push your brand or products on the social web. With over 2.7 billion users on Facebook, there is no larger single prospective marketplace available to organisations today.
Alibaba, Jingdong and Amazon collectively account for over half trillion dollars spent each year online. Businesses transitioning to an online marketplace are advised to explore the prospect of having their products listed on these platforms. The unprecedented scale, automation and infrastructure of these organisations makes the prospect of competing with them on a level footing all but impossible. While certain brands can exploit niche interests, and may find themselves better suited to craft inspired platforms like Etsy, the vast majority of small companies stand a better chance of garnering sales through cooperation with the likes of Alibaba and Amazon.