How ecommerce is continuing to disrupt the retail industry

In 2020, the total of global online sales was 16.4% of total retail sales, with ecommerce accounting for more than three-quarters of overall retail growth, and, today, 57% of global shoppers’ spend is online. Advancements in artificial intelligence and immersive technologies are fueling ecommerce growth and disrupting the retail industry, and these trends are proving that ecommerce is a force to be reckoned with. This wave of digitally-powered change will continue to drive the retail industry forward for years to come.

The democratization of ecommerce, led by platforms making advanced capabilities accessible to everyone, has been a game-changer because these competencies are no longer exclusive to retail giants. Anyone who wants to build a retail brand can leverage ecommerce platforms to create a professional-looking, branded online store, and harness the power of social networks to establish brand recognition and awareness. With the constant removal of barriers for newcomers, online creators, and micro-brands, the number of online merchants will continue to grow exponentially, along with competition and customer acquisition costs.

With that increased competition, customer retention and repeat rates have become more important than ever. Existing customers are 50% more likely to buy from a seller again, and spend on average 31% more than new customers. Additionally, it costs 6-7 times more to acquire a new customer than to retain an existing one. This cost gap between new customer acquisitions and returning buyers will grow as competition rises.

On a tactical level, what this competition is doing is driving a need for merchants to create seamless, superior personalized experiences to retain and attract customers. Advanced technologies including machine learning, augmented reality (AR) and superb logistics are essential for a zero-friction experience that minimizes steps between discovery and delivery. The rising need for sales conversions and buyer repeat rates, paired with improvements in AI and data processing technologies, will lead to hyper-personalized shopping experiences. Merchants will use datafication and machine learning to adapt their products and services in real-time to generate personalized shopping interfaces, catalogs, and even promotions for individual customers to increase the likelihood of a purchase. Utilizing cloud computing connectivity and advanced logistics, content publishers, ecommerce platforms, device manufacturers, retailers, and logistics companies will collaborate to shorten the time and reduce friction between customer intent and product delivery to a minimum.

Customer expectations for an instantaneous and seamless transaction process, powered by AI, AR, machine vision, and speech recognition, will continue to evolve the shopping experience. It won’t be long before everything – both on a screen and in the real world – is shoppable anytime, anywhere. Shoppable videos, visual search and voice assistants will make shopping even more seamless. Buyers will soon be able to see a character on TV or a person walking down the street, and, in real-time, they will be able to purchase that individual’s entire look, including clothes, shoes, accessories, and even makeup, on any of their connected screens or wearable devices. They will be able to ensure that it looks perfect on them with an AR fitting room, and receive the items within a couple of hours.

Even though online shopping surged throughout the pandemic, brick-and-mortar shopping isn’t going away, and, instead, hybrid shopping has evolved. One in four consumers choose hybrid shopping as their preferred method. People are hopping online and picking up in-store, or browsing in-store and completing the purchase online. These growing trends are here to stay. However, there will be more digitized and personalized in-store experiences. For example, buyers could use their AR glasses in-store as their virtual styling guide and shopping assistant, showing them the way to pants that match with the shirt they just picked and the aisle to go and try them on. The glasses could even offer them targeted promotions or virtually customize the product for them in real-time. With hybrid shopping, merchants will need to deliver complementary experiences for both online and in-store shopping, resulting in something greater than what could be achieved through each as a solitary strategy.

The overall shopping experience is becoming more immersive and instantaneous than ever. A seamless process of seeing a desired good, virtually trying it out, buying it, and receiving it in real-time is very close to coming to fruition. These ecommerce trends are driving the retail industry forward into new unforeseen spaces, and it’s safe to say that they will continue to shape the sector for years to come.

Oren Inditzky is the Vice President of Online Stores at Wix.