5 hot e-commerce trends hitting your screens soon

5 hot e-commerce trends hitting your screens soon
Contributor
Contributor
External Guest Writer
October 29, 2020

E-commerce has never been more popular as lockdowns and brick-and-mortar retail closures due to Covid-19 drive consumers to shop online. E-marketer predicts that global e-commerce sales will hit US$3.9 trillion in 2020.

The popularity of e-commerce is also boosted by its effectiveness as a sales channel, with emerging hot trends like social commerce, consumer-to-manufacturer (C2M), live shopping, and augmented reality that will reshape the way we shop.

In this article, we’ll take a look at these buzz words, explain what they mean and examine how they benefit businesses and consumers.

SOCIAL COMMERCE

Social commerce is when businesses sell their products directly through social media networks. This is different from social media marketing, where you are redirecting users to an online store. With social commerce, users can buy products by checking out directly within the social media platform.

Examples of social commerce features include the “Buy” button on Facebook and Instagram Checkout.

With Facebook’s “Buy” button, users can click the “Buy” call-to-action button on ads and Page posts to purchase a product without leaving Facebook.

Likewise, Checkout on Instagram allows US businesses to sell their products directly on Instagram. People can buy products they discover on Instagram without having to go away from the app.

One major brand, the Marvel movie studio, saw great success in using social commerce to drive its ticket sales. Marvel created an automated checkout bot that allows the user to comment on the post with the hashtag mentioned in the update. The checkout bot then takes over their direct messengers to complete the ticket purchase.

Marvel’s social commerce strategy was a big hit as the campaign for Avengers: Infinity War saw an impressive 50% conversion rate from hashtag engagement to tickets purchased.

Experts are predicting that social commerce will be a hot e-commerce trend in the future. According US e-commerce agency Absolunet:

• 30% of consumers say they would make purchases directly through social media platforms;

• 87% of e-commerce shoppers believe social media helps them make a shopping decision;

• One in four business owners are selling through Facebook; and

• 40% of merchants use social media to generate sales.

CONSUMER-TO-MANUFACTURER (C2M)

The consumer-to-manufacturer (C2M) model is a hot trend that is revolutionizing how factories produce goods for consumers. In this model, the e-commerce platform can aggregate and analyze consumer behavior patterns, which is useful to manufacturers as it enables them to anticipate product demand and reduce inventory and supply chain risks.

An example of a company that has successfully adopted the C2M model is Jiaweishi, a Chinese manufacturer of brand-name consumer goods, including Philips and Whirlpool. They started their own brand of robot vacuum cleaners in 2018, and started selling these products online through Pinduoduo’s “New Brand Initiative” program, a C2M scheme that gave them direct access to an enormous market of buyers.

Jiaweishi used the C2M model to improve their product, using consumer feedback collected from Pinduoduo to change the robot vacuum’s randomized cleaning route to make it more orderly. It also redesigned the vacuum’s appearance to make it more appealing to buyers.

So far, over more than 1,500 companies have taken part in Pinduoduo’s C2M initiative to create more than 4,000 customized products, which generated more than 460 million orders. In 2019, there was over $420 million worth of C2M-related bookings and sales made in a single day during China’s Double Twelve shopping day.

LIVE SHOPPING

Live shopping, or livestreaming is like e-commerce’s version of TV shopping, think QVC for the internet age. Presenters such as social media influencers or key opinion leaders (KOL) hold livestreaming sessions, where they broadcast video content in real-time, and try to sell products by modeling them or giving product demonstrations. Viewers can then buy the featured products by clicking on the embedded online links. Livestreaming hosts sell a wide range of products, like clothes, cosmetics, electronics, and cars.

Live shopping provides entertainment and a real-life connection that’s usually missing during traditional online shopping. It helps customers learn more about the products, creates a relationship between the presenter and the viewer, which can build loyalty and boost sales for the brand.

According to Christine Mou, livestreamer for Shopshops: “When Chinese consumers watch a livestream on an e-commerce platform, they are simultaneously watching an influencer and peer whom they like and trust. They can become extremely loyal and receptive to specific livestreamers, especially those they have been following for some time and feel connected to.”

An example of a successful live shopping presenter is China’s Li Jiaqi, also as the “Lipstick Brother”. Li has attracted several million viewers for his live streams and sells hundreds of thousands of dollars of products via live shopping.

“We used to help others sell things offline: I would come up to you and spend an hour fixing up your make-up and then sell RMB 2,000 ($300) worth of products.  But after I became a livestreamer, I can sell up to RMB 2 million ($300,000) in an hour,” Li told 36Kr, a Chinese news website.

Corporate brands are jumping on the bandwagon for live shopping. For example, L’Oreal invited Chinese stars to livestream behind the scenes at the Cannes Film Festival, where they recommended L’Oreal’s products that they had successfully used during the festival. This helped L’Oreal sell out all the featured products after the livestream.

Live shopping is set to explode as a trend in the future, especially in China. China’s livestreaming e-commerce industry reached 433.8 billion yuan ($35 billion) in 2019 and is expected to double in 2020. Taobao Live – the livestreaming platform for Alibaba’s Taobao marketplace – raked in 2 billion yuan in just 90 minutes after the launch of its shopping festival in June 2020. Pinduoduo has also seen strong growth in its livestreaming sessions, with such sessions growing five times in volume in 2020 from 2019 levels.

AUGMENTED REALITY

Leon Laroue, an augmented reality manager at Epson, defines augmented reality, or AR, as ”superimposed digital information overlaid on a user’s view of a physical environment.”

When it comes to online shopping, augmented reality has various uses, including using the technology to give users a better understanding of the product so they would be more likely to buy it. Examples of augmented reality in the retail world include IKEA allowing their customers to preview how their IKEA furniture would look like in their home. By using their mobile to place different pieces of furniture from the IKEA catalogue into a picture of their home that they’ve scanned with the mobile app, users will get a 3D picture of how the furniture looks like in the given space.

“Most people postpone a purchase of a new sofa because they’re not comfortable making the decision if they aren’t sure the colour is going to match [the rest of the room] or it fits the style. Now, we can give them [those answers] in their hands, while letting them have fun with home furnishing for free and with no effort,” said Michael Valdsgaard, former head of digital digital transformation at IKEA.

Augmented reality is also helping retailers decrease the rate of returned merchandise since AR enables the customer to get to know the product better before making a purchase. With this improved knowledge of the product, they are less likely to return it after buying. The American department store Macy’s found that customers who tried their home furnishings products using AR before buying showed a threefold decrease in product returns.

Research by Invesp shows a strong preference for the use of augmented reality by consumers. According to Invesp,

• 61% of online shoppers prefer to make purchases on sites that offer augmented reality technology;

• 63% of customers say augmented reality would improve their shopping experience;

• 40% of customers consent to pay a higher price for any products they were allowed to preview by augmented reality; and

• 73% of mobile AR users reported either high or very high satisfaction with mobile AR experiences.

With Covid-19 accelerating changes in online consumer spending, businesses look set to invest big in these new technological trends in e-commerce to tap on the latest opportunities.