Greater Emphasis on Al-Based Personalization
* Al and machine learning were very big buzzwords in 2019 and made some inroads in the ecommerce space primarily via chatbots and some personalization tools.
* This trend is going to increase substantially in 2020; the recommendation platforms that provide this capability will significantly increase, and, more importantly, they will be accessible to SMB (small and medium business) players in addition to the largest enterprises.
* In 2020 there will also be new areas within ecommerce that Al will become relevant for, primarily as it relates to shipping and pricing. From a shipping standpoint, Al will be used to provide more accurate delivery dates and times for customers based on their specific address while also assisting on the back end to help optimize shipping costs that ecommerce sites have to pay. From a pricing standpoint, Al-based dynamic pricing will start to become more prevalent and will take factors such as current demand, competitor pricing, and shopper preferences into account. This type of pricing within ecommerce will have parallels to how airlines typically charge for plane tickets online.
Consolidation and New Entrants
* The major players in the ecommerce world (Salesforce, SAR Adobe, etc.) will continue to get bigger through acquisitions in order to help them fill any gaps they have in their offerings.
* 2019 saw a number of major acquisitions take place (many related to personalization and Al), and this trend is going to be amplified in 2020.
* In addition to this, with the introduction of social commerce on Instagram, Pinterest, and Snapchat, we may start to see some large new players make a more active foray into the ecommerce arena.
Expansion of Headless Commerce
* This is in many ways contradictory to the consolidation trend; however, I see both consolidation and headless commerce trending in parallel in 2020. For customers who are not interested in implementing large, expensive platforms with one vendor, headless commerce offers more flexibility and the ability to choose best-of-breed solutions to power their ecommerce storefronts. Headless commerce is much further behind the major players from a market share standpoint, so it will likely not have as significant of an impact, but this is one approach to keep an eye on.
Digitally Native and Direct-to-Consumer (DTC)
Brands Continue Expanding Physical Locations
* Brands such as Warby Parker and Bonobos have been around for a while now and have an established physical presence. However, as some of the newer DTC brands start to mature and establish market share, they will take advantage of the retail vacancies to move into brick-and-mortar locations.
* The key difference will continue to be that the success of these brands and their physical locations will be more about customer experience than selling inventory. These stores will be used to increase brand awareness and provide an engaging shopping experience to their customers.
* The format these brands use for physical locations will continue to vary--pop-up retail, experiential retail, and product showrooms will continue to be used to help these brands connect with their customers.
Expansion of Marketplaces Within Ecommerce
* Sites such as Amazon, eBay, Alibaba, Walmart, and Etsy receive a considerable amount of web traffic and purchases on a daily basis.
* These sites are now the primary destinations when many consumers think about making a purchase or for searching for a product that meets their needs.
* While these will continue to dominate the market in 2020, we will also see more niche and boutique marketplaces start to pop up across a variety of sectors within ecommerce.
* Outside of venture capital funding in marketplaces, one of the other enablers that will spur growth in this area is the Shopify fulfillment network that was announced early in 2019. This will help decrease the barrier to entry and will help emerging brands compete from a logistics standpoint with the major players.
Social Commerce as a Significant Force
* Instagram, Pinterest, and Snapchat all launched shopping functionality in 2019. While these were in various forms of beta and early stages in 2019, they will have a much larger impact in 2020 when they are more widely available.
* Customers will be able to save their payment methods, shop brands they are already engaged with, and complete the transaction--all without leaving the app.
* This will effectively become another large channel that ecommerce retailers will need to consider when planning their marketing strategy.
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|Date:||Jan 1, 2020|
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