What’s trending in a new decade of eCommerce?

09-01-2020 CloudSuite
At the threshold of a new decade, it is worth remembering that B2C still only accounts for 14.1% of global retail sales, leaving plenty of room for growth. In B2B, the biggest potential growth market is Europe which punches far below its economic weight by accounting for a mere 3% of B2B eCommerce sales (compared with 30% for China and 10% for the US). 



The eCommerce businesses with staying power are those that best leverage new opportunities, and look over the horizon to see where those might lie. Below we highlight some of the developments that we see driving the market forward in 2020 and beyond.

D2C

The digitization of our lives is making the consumer yearn for authenticity. Direct-to-customer (D2C) responds to this need and enhances sustainability, another key theme for 2020. Commercially, D2C may seem a bit of a no-brainer to suppliers, yet there are formidable logistical and cultural challenges. Are the logistics in place to even take retail orders, let alone deliver them? How will you cope with returns and complaints? 

The cultural adjustment is the trickiest. Suppliers hoping to tap into the explosive demand for D2C need to think long and hard if they are ready to meet the unpredictable retail customer. 

Marketplaces

Niche players are finding ways to make the marketplace business model work for them. Two Dutch retailers who made the leap recently are Bax Music and kleertjes.com, an online children’s clothing retailer. 

What are they hoping to get out of this? A marketplace bolsters the preeminence of your brand and is an excellent springboard to international expansion. The “disadvantage” of selling rival products in your shop is really a piece of outmoded analog thinking. If someone is going to prefer a rival product to yours it is just as well to take 15% in commission, as kleertjes.com is doing on its marketplace.

Both the decision to launch and the decision not to launch a marketplace have implications. But every eCommerce business should go into the new decade with a clear strategy on where it stands in relation to this potent model.

Headless architecture and PWAs

Amazon, Walmart and Nike have “gone headless” and the excitement is trickling down to smaller eCommerce businesses. 

In headless, the front- and back-end of the eCommerce system are decoupled. This means that innovations can be rolled out to the customer without having to make changes to the back-end. Agility is crucial for omnichannel where visitors go on a single customer journey across all platforms and devices. 

An innovation related to headless is the progressive web app (PWA) ─ which we might loosely describe as a website disguised as an app. Again, agility is the big win. PWAs load instantly and greatly speed up the customer journey from browse to purchase. The modern consumer has a short attention span and does not want to be bothered with downloading native brand apps that take up precious real estate. 

The buzz around headless will grow deafening in 2020, with even much smaller eCommerce business opting to launch PWAs, or even adopting some for of headless architecture. 

Payment

The 2010s was the decade of fintech. Consumers became so used to paying rapidly and securely that anything that resembles a payment at all has become a barrier to purchase. This accounts for the success of eWallets and start-ups such as Klarna that allow you to bypass payment altogether – for a short time anyway. 

What is interesting is that even supposedly converged economies such as Germany, the Netherlands and Denmark have very varied payment cultures. Yes, customers want convenience – but what is convenient in one market may encounter friction in another. eCommerce businesses that can respond sensitively to these nuances will have much stronger access to international markets.

While the eWallet is expected to consolidate its position, the market is also pulling away from homogeneity and one-size-fits-all. A more fine-grained understanding of the payment cultures in the markets where you operate is also a key point of focus for 2020.

Ordering

Even consumers that dislike the idea of a smart speaker will get one sooner or later. Already, there are 119m of them in the US alone. Optimizing voice ordering on your eCommerce platform is going to be crucial. Perhaps as important as voice orders are voice searches, especially in B2B where catalogs run into hundreds of detailed product specifications. 

QR scanning is an implementation of the omnichannel shopping experience where customers in a physical shop can scan a product using their smartphone, and extend the shopping experience online by (re)setting their specs, or researching complementary products. 

Omnichannel is about capturing the customer at the right moment – and making sure that every moment is (potentially) the right moment. By integrating voice and QR scanning in the customer journey, you will carry more customers with you.

Subscriptions

In 2020, eCommerce will create increasingly innovative ways to extend the subscription business model which is already broadening from software licensing and media services to include regular every-day physical purchases such as shaving products, food, bin liners, and even t-shirts and underwear. B2B businesses reluctant to tie up capital are increasingly looking to subscribe to furniture, machinery, IT, catering and so on. However, it is expected that advances around the Internet of Things (IoT) will radically spur the B2B demand for subscription services.

For millennials, subscriptions are a natural model of purchase and consumption. The winners will be those eCommerce businesses that can bring smart subscriptions to the market quickly. 

AR/VR

Omnichannel is blurring the barriers between “real” and “online” shopping ─ and the new experiences offered by Augmented and Virtual Reality are part of that development. 

Until very recently AR/VR were not really experiences at all but gimmicks that were a distraction from the customer journey. Online isn’t everything: some 80% of global retail sales take place offline, and 1 in 3 shoppers believe that not being able to see and touch a product is a serious disadvantage of online ordering. Retailers are closing this gap with physical shops and with AR/VR functionalities that are now meaningful enough to take the customer to the next stage of his journey to purchase. 

B2B also wants more realism and engagement, but AR/VR will be particularly helpful in showing wholesale buyers how to configure or troubleshoot a product.
 
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