Development and Managed Hosting
ANEXIA
JUL
4
2018

E-commerce: a glimpse into the future

Written on July 4, 2018 by Patrick Kulterer

E-commerce-based trade is growing constantly. In 2016 some 2/3 of all Germans made purchases online. In the years to come, more and more people will place orders on the Internet, and this means that: there will be various changes in both supply and demand for us. Businesses will be required to focus more intensively on optimizing their online storefront in order to guarantee consumers a successful online shopping experience (customers do not want to be influenced by fake evaluations and will want to know in advance whether their item of clothing will fit them).

E-Commerce

As businesses, the following questions should be addressed: Will a brick-and-mortar business still be relevant in the coming years? How should I optimize my online storefront? Inspiration for answering these questions may perhaps be found in the five future scenarios for e-commerce described below.

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1. Artificial Intelligence in E-Commerce

Artificial intelligence is currently a buzzword that is prone to inflationary usage and is used all too often to mean simple algorithms. Real AI applications, such as those for adapting purchasing experiences to individual needs or for redefining back-end concepts, are found only occasionally in advanced e-commerce applications.
Another two or three years will pass before AI forms a part of the core functionality of online shopping applications. There are however pioneers, such as the German Shopware AG: Its back-end ‘learns’, responding to frequently-used tasks and sequences of actions and adapts the management interface accordingly to suit the particular user habits of the administrator.

 

For the front end as well, the theme of ‘individualization’ (i.e. linked data, adaptation of colors, interface design, product presentation, etc.) is in the foreground. The idea is for a shop front-end that looks different after every visit, based on my needs and generated from the data linkage of the total of my everyday decisions. Online storefronts of the future, thanks to the all-inclusive networking of daily life, will recognize what customers have used, purchased, said, or done, and why. After this, the data is collated and individual, personalized recommendations are given. The objective is an immensely high conversion rate, one that is still unimaginable for retailers today. The field of e-commerce will embrace the whole of our everyday lives, and in future it will no longer be necessary to actively visit a website or mobile app in order to make digital purchases.

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2. Social Media: Linking of Online and Offline Data

One of the things that will be important for Facebook in coming years will be the linking of online data with data from the ‘real world’. This can already be seen in China with providers such as Alibaba and Tencent in some specific shops. With WeChat, for example, Tencent has an app in its portfolio that is more than just a messenger app: it can be used for reading news, making purchases, providing identification, making payments, and much more.

Social media with two-dimensional platform images will develop further to become virtual-reality worlds, which will also be suitable for advertising. Virtual reality is currently establishing itself in isolated situations with ever more affordable hardware. This will, however, take a minimum of a decade to be realized.

The major challenges for social media include consolidation and the switch to social reality, as Second Life has already attempted and is still testing. This is also a reason why Facebook has embarked on its Oculus program, in order to retain its market share. There is much more behind this than merely bringing good, affordable virtual-reality glasses to the market. The future for VR in terms of e-commerce is strongly competitive and each of the major players has its advantages and disadvantages based on their historically determined core business areas.

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3. Brick-and-Mortar Shops: Augmented Reality

Offline trading will also develop into more of a ‘world of experience’ in the near future.  is set to grow rapidly, enabling users to walk into a shop in virtual reality without leaving home, for example, to try out items of clothing. While the sale itself takes place online, the relationship to the customer is built in an offline situation. An example:  an online wool seller operates a ‘knit cafe’. He sells his wool online, while he builds up his community in the cafe.

Since the orders are placed mainly online, there is no need for an instore checkout. Data that is generated online is matched to customers while they shop in the physical shop, for example, to display virtual combinations of clothes and accessories on screens or in holograms. The checkout takes place purely through leaving the shop and will in future be cashless.

dividing line_blockchain4. Blockchain

Although most people know blockchain primarily through cryptocurrencies, this is only an application model. Blockchain applications are based on decentralization, which prevents any single entity gaining too much control—at least, this is the general understanding. If one were to use blockchain in e-commerce with this idea, this would mean that the manufacturer and consumer could conduct their transactions directly, without any intermediary transactions. This would make products traceable back to their origin.

Alternatively, however, it is possible that if used with SmartContracts, the doors to an apartment would be automatically locked in the event of late payment of rent, or that cars no longer start because the leasing fee has not been paid. If used in this way, the decentralized approach and the idea behind blockchain could quickly gain a bad taste. Is this really the causal link that was intended? Corporations are developing individual blockchain applications for their own profit maximization and cost reduction. In principle, the concept of blockchain has immense potential and offers countless possible applications to make our daily life easier and simplify our consumer behavior—in addition to rescuing the world from platform concepts. Time will tell in which direction the trend will unfold.

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5. Online Storefront Optimized Primarily for Mobile

When speaking of shop optimizations, it is vital that the shop be not only accessible from mobile devices, but also that it is visually attractive and easy to use on those devices. The reason is clear:  most of our online time today is spent on mobile devices. When commissioning a mobile app, it is important to think ahead. A custom app is not advantageous for every shop; if it does not offer sufficient added value, that app will soon be a dead item on the mobile display. Often a webshop designed primarily for mobile, but that can adapt itself automatically and responsively to the device used (PC, smartphone etc.) is sufficient.

With reguards to payments, the trend is also increasingly toward digital payment methods. Irrespective of the form, however, there is constant development—with the smartwatch, the smartphone, and other NFC solutions. We are certain to be amazed about this in future, since one thing is clear:  the more uncomplicated the payment, the more ultimately satisfying the purchasing experience.


What are the shop optimizations that should not be missed in the coming years?

  1. It is important that the shop is designed for mobile first, but it should be noted that an app is not suitable for every business. Here again the trend is towards progressive web apps (PWA).
  2. The front-end of a web page should respond as individually as possible to the preferences of individual consumers (colors, range, etc.). It is also important to include programmatic advertising in the online marketing mix.
  3. Real ‘conversion killers’ are complicated checkout processes and payment methods that are poorly technically implemented or missing altogether. This should be avoided, as they result in the worst case in the purchase being aborted.

 

How the e-commerce field will change in the coming years and what the trends are that we can look forward to are difficult to estimate at present. Nevertheless, there is one thing we can be certain of:  the simpler and less complicated the changes are for users and shop owners, the more popular they will be and thus the faster they will be adopted.

 

Do you also wish to optimize your online shop for mobile? If you are interested in app development or an online storefront designed for mobile first, we will be happy to advise you on the best options for your business.