How Online Businesses Succeed Despite Coronavirus
In 1995, the first product was ordered through the Amazon website – a book. More than 20 years have passed since then and now the volume of online purchases is approximately $ 2 billion. According to forecasts, already in 2021 the figure would be over $ 4.5 billion. E-commerce is one of the fastest developing sectors of the economy, giving rise to various trends. Which help businesses to succeed. Which of these trends deserve attention – read in the PaySpace magazine archive.
Mobile Shopping: Shopping with Smartphone
Since 2016, sales using mobile devices have increased by 15%. According to Statista, by the end of 2021, 73% of sales in e-commerce will be on smartphones, particularly among millennials and Generation Z due to demand for this method of shopping.
Businesses need to optimize their website and online store for mobile devices to remain competitive.
At the end of 2017, 13% of smart speaker owners in the United States made purchases using voice commands. According to forecasts by OC & C Strategy Consultants, by 2022 the number of such buyers will increase to 55%. According to experts, this method of shopping has gradually evolved into a trend mainly due to the Smart Dynamics Echo, which was released in 2014 by Amazon.
However, due to the fact that voice purchasing is a non-visual experience, they are no longer used for search, but to make purchases based on an already adopted decision. Therefore, most buyers use voice commands to purchase low-priced products, such as food and cheap electronics. Nevertheless, the projected growth of voice commerce suggests that business should focus on this trend, especially when targeting the international market, which includes customers in the US and the UK.
Social Network’s Increasing Role as a Sales Channel
Social networks have affected not only our communication, but also our daily lives, the way we buy things. According to broadband search, on average, Internet users spend about two hours every day on social networks, so why are popular applications not used as channels for the sale of goods and services? With the increasing share of advertising on popular sites such as Facebook and Instagram, adding the buy button was a clear step.
The social network has also proved effective as a trading platform during the coronovirus epidemic. Therefore, CixaBank, one of the first Spain’s major retail banks, introduced a technology that allows retailers to sell goods through social networks and instant messengers. As small enterprises were forced to close their physical offices due to quarantine, many of them tried to start work online. To help the business with sales, CaixaBank has launched a social commerce service, which allows retailers to manage online purchases directly from their profiles on Facebook, Twitter, Instagram, WhatsApp, Telegram and other instant messengers .
Using social networks allows you to not only sell goods and services, but also promote your brand with various available tools (videos, text posts, photos, advertisements, collaborations with famous bloggers, etc.). In addition, during the period of coronacrosis, social networks help small enterprises with promotion. Therefore, a button on Facebook and Instagram was “Share a Business”, with which users can talk about their favorite manufacturers and stores.
In addition, Instagram launched a new function in Ukraine to order food online, and also allowed entrepreneurs to familiarize customers with their offers using special stickers in Stories.
pay attention. Deian’s video sharing service Tickcock and its Chinese version took the first place in April 2020 for in-app purchases. In just one month, sales in applications increased 10-fold, reaching $ 78 million, expanding services such as YouTube, Netflix and Tinder.
Modern consumers have become more aware of what effect their purchasing behavior has on the environment. In particular, in recent years, various services have been introduced to track the carbon footprint based on user purchases, environmentally friendly payment cards and analysis of terminals.
A business must keep this trend in mind, ensure that its activity meets accepted standards and does not harm the environment. Some marketplaces also add special filters that help users find products that are not harmful to the environment.
pay attention. A few years ago, environmental degradation in China accelerated the growth in online commerce.
Role of artificial intelligence
According to BusinessWire, by 2022, global retail spending on artificial intelligence (AI) had reached $ 7.3 billion per year (in 2018, spending was $ 2 billion). Companies use AI to improve customer service and personalization. This includes the use of automated marketing platforms that are equipped with tools to create timely offers, or chat bots that respond quickly to customer requests. Other areas where AI would be useful to retailers: optimizing pricing and discounts, as well as forecasting further demand.
Prnewswire predicts that by 2022, more than 120,000 stores will use augmented reality (AR) technology, providing the best shopping experience. Therefore, the use of AR will solve the problem with the visualization of items that customers cannot see with their eyes when ordering online. With AR, customers can better understand how the products presented on the site meet their needs. Thus, companies will provide an opportunity for customers to test and research products as they shop in ordinary stores.
Future is personalization
According to a study by Marketovis, more than 50% of online shoppers note the importance of personalization when shopping. According to Averages, 74% of marketers believe that personalization has a “strong” and “significant” impact on the development of business relationships with customers. Customers appreciate a personalized approach (this includes sending personalized newspapers and messages, providing essential information to an interested group of consumers, interacting with customers using video content or blogs, etc.) and generally poor customers Some shops may escape due to reviews.
One of the many difficulties in the work of an online store is selling products to consumers who have no chance of physical contact with the product. It is for this reason that businesses should resort to visual commerce (VC), which allows you to do marketing on a new level. Therefore, rather than using only photos, VC introduces other types of visual media: user-generated content (online platforms for posting blogs, podcasts, photos and videos, online reviews), interactive content, engaging videos, and Augmented reality, as noted above.
Visual commerce is slowly but surely becoming an integral part of e-commerce, as evidenced by the increasing use of deep learning techniques. This includes the area of image recognition, whose volume, according to MarketWatch’s forecast, increased 19.6% to $ 81.88 billion (it rose to $ 20.19 billion in 2018).
Coronavirus epidemic effect
Earlier, when talking to experts, the editors of PaySpace magazine asked who had the most impact on the trends – business, consumer or government, but now the emphasis has shifted to the coronovirus COVID-19 and most of the economy It has a harmful effect on areas.
Experts note that coronovirus was one of the most important, if not the most important, effects on e-commerce in 2020.
Due to the fact that governments around the world have closed stores and imposed quarantine restrictions, more and more people have started resorting to online shopping to buy goods. Therefore, in just two months of the coronavirus epidemic, Amazon founder and CEO Jeff bezos Earned $ 29.9 billion, bringing his income to $ 146.9 billion.
Experts predict that exposure to coronaviruses will be a long-term impetus for the development of e-commerce. New customers will continue to buy goods online, as it is convenient, fast and secure (due to cashless payment and guaranteed refund if the goods did not fit).
Analysts say the e-commerce industry will be the biggest beneficiary of the coronovirus epidemic. The penetration rate, which is currently 15%, is expected to increase to 25% by 2025 (according to Marketwatch). At the same time, due to the negative effects of the epidemic, 100,000 ordinary shops are estimated to be closed in the next five years.
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