The Future of Ecommerce

The eCommerce industry has come a long way since its emergence. With the changing landscapes in commerce, technology has provided favorable conditions for an online business to flourish in the past 30 years. It is getting bigger and bigger with every passing year. The pandemic has also contributed much to the popularity of eCommerce and has strikingly changed the shopping habits of people.

The first eCommerce transaction was made back in 1994 by a boy named Phil Brandenberger using his Mastercard to buy Sting’s Ten Summoners’ Tales via the internet for $12.48 and gave the idea of a transaction using the internet. After that, the emergence of Alibaba and Amazon in the mid-1990s has brought a significant change into the retail industry by capitalizing on global internet penetration and digitalization of financial systems. A spike in eCommerce jobs also took place with the emergence of this new trend of shopping.

In 2021, the cutthroat competition in the eCommerce industry has forced many businesses to think out of the box and to cater to the evolving needs of the consumers. The ever-changing trends of businesses also influence customer behavior making it difficult for some businesses to even stay afloat let alone to compete. So before opening an online store which seems to be an attractive idea, businesses need to dive deep into this dynamic business sector and the future it holds.

What is eCommerce?

Ecommerce short for electronic commerce or internet commerce refers to the transaction of goods that happen using the internet. It usually involved the sale of physical goods in the past but these days it also encompasses other activities including online auctions, internet banking, payment gateways, and online ticketing.

There is a variety of eCommerce businesses based on the type of goods they sell, the model they are based on, and the platforms they use. Ecommerce businesses can be divided based on the types of goods they sell as follows:

  • Typical online retailers selling physical goods
  • Services-based retailers
  • Businesses selling digital products or e-goods

Then there are the types of eCommerce models based on the parties participating in the transaction which are:

  • Business to Consumer(B2C)
  • Business to Business(B2B)
  • Consumer to Consumer(C2C)
  • Consumer to Business(C2B)
  • Business to Government (B2G)
  • Government to Business (G2B)
  • Consumer to the government (C2G)

The most popular platforms which most businesses use are:

  • Magento
  • Shopify
  • Woocommerce
  • Salesforce
  • Oracle commerce
The Future of Ecommerce 1

The surge in global eCommerce market:

Over the last few years, e-commerce has become a crucial component of the global retail market. The third wave of eCommerce has gained a significant spike during the last decade. The main reason is the streamless internet access and advanced mobile technology increases the number of digital buyers every year. In 2010, eCommerce accounted for 7.2 per cent of the total retail sales in the U.S. By the end of 2018, it had nearly doubled to 14.3 per cent of total retail sales. The total eCommerce sales in the U.S. were $165.4 billion in 2010. As the retail market steadily grew—and eCommerce’s chunk of it grew at a far more significant pace—total eCommerce sales in the U.S. rose to $517.4 billion by the end of 2018. That’s 313 per cent growth in revenue over the course of the decade. In 2019, an estimated 1.92 billion people purchased goods or services online. During the same year, e-retail sales surpassed 3.5 trillion U.S. dollars worldwide, and according to the latest calculations, e-commerce growth will accelerate even further in the future.

The Future of Ecommerce 2

 

Retail e-commerce sales worldwide from 2014-2021

Retail websites generated almost 22 billion visits in June 2020, up from 16.07 billion global visits in January 2020. This is of course due to the global coronavirus pandemic which has forced millions of people to stay at home in order to stop the spread of the virus.

Is eCommerce in need of an innovation revolution?

From the statistics mentioned above, it can be anticipated that the eCommerce industry is unlikely to fail and is on its way up. People are getting used to this new normal and the uncertainty that the pandemic has created has forced more people to adopt the online mode of shopping.

Ecommerce companies are struggling hard to remain competitive and efficient. The traditional ways of eCommerce are not fulfilling the demands and expectations of the customers. Ecommerce sector needs to opt for an architecture that conforms to the emerging market trends of the new decade. The headless commerce is the only solution for modern-day eCommerce problems. It decouples the front-end presentation layer from back-end functionality allowing immense scalability and customization.

Let’s have a look at how Headless eCommerce holds the potential to revolutionize the eCommerce industry.

What is Headless eCommerce?

The Headless eCommerce architecture eliminates the front-end layer and stores, manages and delivers content directly through back-end. It is the perfect model designed for the IoT (internet of things) age. APIs are used by developers to deliver things like products, blog posts or customer reviews keeping the omnichannel strategy intact. The front-end developers are left with the task of presenting the content as per their desired framework.

The headless commerce provides more opportunities for brands specifically experience-focused brands like lifestyle products, direct to consumer (DTC) brands, and brands relying heavily on influencer and native advertising, a content-led or experience-led strategy. It makes it easy for brands to alter their strategy without any pain and stay up to date. Unlike the commerce-led model of eCommerce, the experience-led model is flexible allowing the brands to create a unique customer experience on the frontend.

How Headless eCommerce work?

In a headless commerce system, requests are being passed between presentation and functionality layers for which web services or application programming interface work as mediators generating calls for each action. For instance, voice browsing is on the horizon and people prefer voice browsing more these days. When any transaction is made through the voice browsing, the web front-end is simply ignored making it a headless transaction. Voice devices, like Amazon Echo and Google Home, send API calls to the back-end to process the order and in turn, the back-end sends an API call to show the customer the status of the order.

How is it revolutionizing eCommerce?

The headless architecture is free of design constraints as compared to traditional commerce and comes with the advantage of a unique experience for both users and admins. As the frond-end is not tightly coupled with the back-end, endless customization and changes can be made at the front-end. Here are a few emerging eCommerce trends of the decade that are only possible with this approach.

They are:
  • Omnichannel Shopping:

Multiple channels are becoming prevalent in the third wave of e-commerce where customers’ path to purchase is no more dependent on a single channel. It is estimated that around 75% of the customers use multiple channels during their shopping journey. It is a big challenge for eCommerce businesses to understand how their customers buy, which marketing channels do they engage with, and their motivations and main drivers to purchase.

The headless content management system help propel the content on every channel that has emerged or is likely to emerge. It helps integrate offline and online attributes into a single and coherent multi-channel shopping creating convenient touchpoints for customers. The in-synced online and offline data help make informed business decisions.

  • Ecommerce personalization:

The consistent customer experience should not be compromised with the changing customer needs and behaviors. Customers have become aware of the alternatives available in the market and are always in search of the best. Headless commerce helps tend to the needs of modern customers. The back-end takes care of the personalization in this regard as it knows what the customer has previously bought and uses this data to power the personalization engines on CMS, mobile apps and social channels.

  • Competitive advantage and seamless integration:

The API driven headless commerce systems make it easy to integrate with such as ERPs, marketing automation tools, CRMs, CMSs, and more. The API is driven integration transfer the data easily and quickly and doesn’t need to be updated thus fostering seamless connections and transfer of data enhancing the customer experience.

Omnichannel availability is the future of eCommerce. Investing in headless commerce helps eCommerce businesses to stay ahead of the curve and gives them a competitive edge.

Dropshipping shaping the future of eCommerce:

The modern eCommerce vendors are drifting towards this new model of business known as the drop-shipping model. This model comes with a slight variation in customer and business transaction as it doesn’t maintain the products in the inventory rather source it directly from the manufacturer and deliver it to the customer. The dropshipping plays the role of the mediator and makes a profit by delivering products from wholesalers to consumers.

How is it transforming eCommerce?

The dropshipping models cut the cost of maintaining inventory and warehouses encouraging entrepreneurs and startups. It doesn’t require any significant investment. The retailers just select the items to sell and upload them on their site.

The dropshipping model is gaining significant popularity in the market as it saves retailers a lot of time and effort helping streamline the business flows. With the rising demand for eCommerce, dropshipping companies are also spiking providing high-quality drop shopping software and services.

Dropshipping comes with the following advantages:

  • Feasible product sourcing
  • Economical storage
  • Hands-free order fulfillment
  • Scalability

Social shopping, Voice commerce, Mobile shopping revolution, Digital wallets, chatbots, and cross-border shopping are the revolutionary trends besides drop shipping and headless commerce that the third generation of eCommerce has seen. They have transformed the customer experience solving even the minor issues of the customers. One drawback that eCommerce has yet to overcome is the authenticity of the product that only a brick-and-mortar store can provide. Customers often are reluctant to go for eCommerce keeping this fact in mind. Visual commerce although uses augmented reality (AR) and 3D visuals embedded on website pages and mobile apps to give customers a graphical, interactive representation of products yet eCommerce businesses need to come with a strategy that satisfies all the reservations of the customers.