In 2019, e-commerce generated EUR 69 billion in sales in Germany. A further increase over the previous year, which is not surprising, since e-commerce is on the rise, while stationary trade continues to stagnate. But which e-commerce trends will prevail in 2020? We have the answer!
1. Artificial intelligence for your online shop
What sounded like science fiction ten years ago is becoming more and more of a reality: namely the use of artificial intelligence in everyday work. The term AI is certainly a broad field. According to the Turing test, a program is considered to be AI if it is not possible to distinguish whether it is communicating with a robot or another human being. According to this definition, most chat and voice robots already count as latent AI. And it is precisely these that will be trendsetters in the e-commerce business in 2020. But why? There is more than just one representative answer to this question:
1.1 Chatbots as a direct marketing tool
Anyone with experience in marketing knows that a customer converts best when they are addressed directly as soon as any interest is shown in the product. In the case of stationary trade, direct marketing is simple: the customer enters the store and is intercepted by a trained retailer. In the case of an online shop, direct marketing is much more tricky. On the one hand, the frequency of visits to online shops is usually much higher, and on the other hand, an online shop is open 24 hours a day. The cost of employing staff to write to a user directly as soon as they open the online shop would be exorbitant. In contrast, the monthly flat rate for a sophisticated chatbot system is a bargain. Especially as the chatbot pays off in the long run and gets better with every new customer conversation. According to a study by the British market research institute Juniper Research, chatbot-based interactions will increase retail sales at least tenfold by 2023.
1.2 Chatbots as support for customer service
Although a chatbot enables direct marketing for online shops, it is unrealistic to expect that it will replace the trained salesperson in the near future. As no matter how adaptive the chatbot’s algorithm is, there will always be questions that fall outside the learned scheme. In such cases, customer service is needed to find a creative solution. But in all other cases the chatbot is a great support. It can relieve customer service of answering standard questions. This allows the company to either save on personnel or create free space so that personnel can concentrate on relevant tasks.
2. Augmented reality in e-commerce
If you don’t know what augmented reality is all about, then “Pokemon Go” might give you a clue. The game celebrated worldwide in the summer of 2017 displays Pokemons in the real environment on the mobile phone screen. In other words, the game augments reality by placing non-real characters in a real setting. All that is needed to perfect the form is a medium, such as a mobile phone camera, to fuse the actual reality with the virtual one. This new technology has also already established itself in the retail industry. A prime example is the online eyewear retailer Mr. Spex, whose entire business model is based on augmented reality. Thanks to augmented reality, customers can try on various models of glasses in the online shop. All they need is a chat cam, which is now standard in most screens. The glasses are projected onto the camera image as if the user had just put the glasses on. Sephora’s online shop uses the same principle to boost sales of its cosmetics products, or the IKEA Place app allows customers to try out their dream sofa in their own homes. Augmented reality is so promising because the customer can test the item they want before ordering. The chances that they will order the item and not return it are maximised. Besides, people are creatures of comfort. Anyone who works, would rather quickly try on a pair of glasses online instead of going to the nearest optician’s after work. Anyone opting for augmented reality in 2020 will therefore be vastly superior to the competition.
3. Mobile and voice commerce
The dogma “mobile first” has long applied to social networks. But more and more people are also accessing the shop site on their mobile device in online retail. According to a recent survey by the location marketing provider “Uberall”, 62 percent of all Germans already regularly use their smartphone for shopping. It’s hardly surprising that Amazon, ebay and similar have been investing in their own apps for years. Anyone who cannot afford their own app should at least make sure that their own online presence is optimised for mobile devices. Or in web designer jargon, “responsive”.
In addition to the mobile phone, the voice assistant is also becoming increasingly involved in online shopping. About two percent of German users ask their language assistants such as Alexa or Google Home to search for a specific product. Sure, two percent does not seem like a lot but the trend is rising. Especially since one in eight German adult citizens already owns a smart loudspeaker with speech assistant. According to a study by Bitkom and Deloitte from 2018. Of course, it will never become standard to handle the whole buying process via the language assistant. The customer lacks the visual incentive for this. But the language assistant is becoming more and more popular for the search process. Or for a quick follow-up order if they’re already convinced by the product. The smart speaker is also the best way for blind people to shop independently online. As with conventional search engine optimisation, structured data is the road to success for the language assistant. So try to clearly tag important keywords in your online shop in the code.
4. Social media commerce
Social media is already an integral part of their marketing strategy for most online retailers and therefore not a new but continuing trend in 2020. Nevertheless, the effectiveness of distribution via platforms such as Facebook, Instagram and Pinterest is underestimated. This is because most companies do not dare exploit the sophisticated advertising formats on social media platforms. Usually, they stick to simple picture or video adverts. Facebook has been offering the ‘Instant Experience’ advertising format for some time now. This can be used, for example, to set up a complete landing page on Facebook, which adapts its content to the respective user. An external online shop site can hardly get more performant and reactionary than this. The ‘Instagram Stories’ format also deserves more attention as an advertising medium. As a ‘Story Ad’ is the most effective method for active storytelling. Turning potential customers into convinced fans.
5. Personal content
The keyword for successful e-commerce is personalisation in 2020 too. You have to know your customers to be able to retain them in the long term. Anyone serving up the same old advertising over and over again instead is just perceived as annoying in the end. But how does good personalisation work? There are three important building blocks: clean tracking, sensible automation processes and a tidy customer relationship management system. Tracking identifies which products the customer is interested in, for example the new shoe collection. A process is then triggered where the customer automatically receives a 10 percent voucher by email. They then buy the shoes. It now has to be noted in the CRM that they should not receive any advertising for this product in the future. However, it is not just becoming increasingly important to present the customer with blog articles that are actually relevant to them for products but also in the area of content marketing. Ideally, they will receive a personalised newsletter every month to intensify customer loyalty. Company blogs that do not take this hint will gradually gather dust.
Anyone who wants to hold their own against the competition in 2020 must not shy away from digitisation. In contrast to stationary trade, developments in e-commerce are fast-moving and it is necessary to be increasingly technically savvy. Personnel with the appropriate expertise are the basis for implementing trends such as augmented reality or personal content successfully for your own business.
Author: Catharina Chlupaty