Thanks to today’s technology, many consumers have begun to prefer shopping online to shopping in-person. In 2018, worldwide retail e-commerce sales reached $2.86 trillion, with Australians spending $21.3 billion in online shopping.
Aside from consumer demand, technology is playing a pivotal role in reshaping the e-commerce landscape. According to recent studies, in 2015, less than 10% of consumers used a smartphone to make an online purchase. Fast forward to the present, and one in five are now using their smartphones.
There’s no doubt that shifting consumer patterns are driving huge changes in e-commerce, but it’s today’s emerging technologies that are underpinning the foundation of modern online retail.
Here are four technologies impacting the state of e-commerce in 2020:
Artificial Intelligence and Machine Learning
Artificial intelligence (AI) and its subset, machine learning, have already been widely adopted in Silicon Valley and beyond, so it’s inevitable that it will soon find its way in many e-commerce businesses too.
One technological area of e-commerce that has already seen advances in both sophistication and adoption has been the rise of the customer service chatbot. We’ll likely see the continued development of these conversational agents as the year progresses. A recent Gartner study anticipates that by 2020, 85% of customer interactions will be managed by AI.
Chatbots can take on many of the customer service responsibilities of running an e-commerce website. When e-commerce representatives are unable to answer customer questions on behalf of the site, during nighttime hours, for example, chatbots can provide an instantaneous response that is often more timely, efficient, and accurate than the response of a human customer service representative. In addition, chatbots can provide product recommendations, tracking and shipping information, and can even be implemented on a social media page.
It’s easy to treat augmented reality (AR) as a novelty or a toy, but it can have a significantly positive impact on the e-commerce customer experience. AR was once a far-fetched concept, but it has since become a reality for many leading e-commerce brands. AR allows virtual and real worlds to harmoniously coexist, which for today’s consumers, offers a number of opportunities in pre-purchase product research.
AR can help shoppers easily envision an item they are considering buying, whether it be a couch for their living room or a new pair of sunglasses. For retailers, AR also translates to higher conversion rates and lower return rates.
Many furniture companies have embraced AR technologies to provide customers with a “try before you buy” experience. Home-focused retailers like Lowe’s, Anthropologie, Wayfair, and Pottery Barn have already applied AR functions to their digital strategy. They utilize their apps to lay merchandise over images of customers’ homes. According to Laura Alber, chief executive of Williams-Sonoma, AR is soon to be a “transformative tool in improving the customer experience because it’s going to be able to help people better visualize.”
It’s no secret that today’s consumers use their smartphones for pretty much everything. From social media platforms, to GPS services, and even streaming movies, mobile devices can help consumers with a number of daily tasks. The continued rise of mobile platforms has given way to mobile payment methods, which has been one of the most dramatic changes to the way people shop since the advent of e-commerce itself.
It’s projected that 90% of cell phone users will be participating in some kind of mobile payment activities by 2020, with many consumers using various technologies such as Apple Pay, Google Pay, and bank offerings from companies like Chase.
Not only have cybersecurity experts revealed that e-wallet options are much safer to use online than credit cards due to the fact that they use tokenization to effectively encrypt customer data, mobile payments also provide a superior customer experience for today’s mobile shoppers. Payment issues are one of the largest causes of cart abandonment; when customers struggle to enter their payment information at the end of the checkout phase, they often will abandon the transaction altogether. However, mobile payment options offer faster, smarter payment methods that make it simple for customers to complete their purchase.
Adoption of smart speaker technologies, such as the Amazon Echo and Google Home, has been a major driver of voice search, particularly in the e-commerce space. Odds are you already have one of these devices somewhere in your home, as the latest smart audio report from NPR and Edison Research estimates that over 53 million people own at least one smart speaker today.
Voice search establishes a completely new medium for e-commerce opportunities. Although few retailers have yet to incorporate voice-compatible shopping into their strategies, those that have, like 1-800-FLOWERS, Domino’s, and Amazon, already have noticed significant benefits.
According to data from research firm Consumer Research Intelligence Partners, consumers that use their Echo to make purchases are among Amazon’s most loyal customers, spending an average of $1,600 per year compared to the $1,300 per-year average of Prime customers, a figure 66% higher than the average Amazon customer spends in a year. Smart speakers offer an easy and seamless way for consumers to conduct their online shopping, so it’s no wonder why they’re estimated to become a major driver of e-commerce sales.
Emerging technologies, like those listed above, are changing the e-commerce game for both buyers and sellers. Today’s e-commerce sellers can use technology to optimize and expand upon their customer experiences, offering their customers a simpler, more meaningful, and more enjoyable online shopping opportunities.
If you’d like to discuss your eCommerce business and strategy for 2020, our team of 60+ strategists, UX designers, and developers are here to help.
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