Are You Ready for the E-commerce Trends of 2024?
E-commerce continues to be a business driver, evolving and adapting to technological advancements and consumer behaviour shifts. As consumers adapt to changes in the digital marketplace, to maintain their competitiveness businesses must stay ahead.
The trends seen in the first quarter of 2024 persist and are gaining momentum. These trends are shaping e-commerce now and will in the future.
Here are key focal points for entrepreneurs:
1. Seamless omnichannel shopping experience
Cohesive brand experience is the name of the game. The post-Covid return to brick-and-mortar retail shopping has not slowed down e-commerce. Now consumers’ expectation is that they are able to research their product needs on social media, order the product online, and return it in person, all with amazing ease. Businesses must ensure their online presence is coherent and maintained across all channels and that purchase funnels are simple for customers to use.
2. Social media commerce
As Generation Z increasingly dominates the consumer market, they are driving a shift in how products are found and purchased. Shifts in search behaviour have been observed since 2022 and continue well into the present day as new generations of consumers use Google and other traditional search channels less, while platforms like TikTok, Instagram, and Youtube play a significant role in product discovery [R1] and purchase.
Businesses must prioritize a strong and easily accessible social media presence, with seamless omni-channels that allow customers a fully integrated experience. And consistent branding really counts!
3. Revolutionary AI
Whether you consider AI good or bad, it is here to stay. Not only did AI shape 2023 through the introduction of generative AI, but its capabilities are evolving in increasingly smaller and shorter time frames. Canadian companies are investing in AI at a rate of 37% while their global counterparts outpace them slightly at 42%.
With the boom in AI comes the inevitable hype. It’s important for brands not to get swept away in trying to keep up. The critical aspect of AI to understand is the capability and implication of machine learning; the brain of AI.
A good example of how the shopping experience will evolve with the advent of machine learning is in the use of recommendation engines. Recommendation engines allow retailers to better understand and analyse consumer behaviour, which in turn provides the retailer with the ability to suggest highly tailored product selections to customers. With each evolution of AI and as it becomes more sophisticated the possibilities continue to expand. Consumers will also become more sophisticated and will learn to love the machine!
As AI handles the technical transactions it opens up the opportunity for businesses to offer genuine customer experiences. For example, tailored product selections should feel friendly, and the customer who returns a product in person to your store is a huge opportunity to connect and provide superb service that the customer will appreciate and remember and recommend your business.
4. Inflation and online spending
Inflation was one of the hot topics of 2023 and the New Year hasn’t seen it fade into the backdrop yet. If anything consumers are still poised to curb impulse shopping online as their spending power continues to erode. This does not mean that consumers are not spending; they are still spending, but becoming more thoughtful about what holds value. Consumers’ definition of value is as diverse as the selection of goods available. Ultimately, promoting the balance between quality and cost is most likely to attract your customer’s attention.
So how can you ease the anxiety of shoppers and reinforce that your products have value or at least won’t hurt their budget? There are a number of avenues - starting with ensuring that your brand’s value is communicated clearly and upfront, offering budget-conscious options, and if it comes to it - ensuring returns are as easy as purchasing.
5. Buy Now Pay Later accelerates checkout
Now that we’re on the topic, how seamless is your checkout? If you find you’re losing sales at the final gate it may be time to consider Buy Now Pay Later, otherwise known as short-term financing. The adoption of short-term financing has become more widespread as frictionless transactions become the expectation, and it’s catching on with the younger generations whose market power is building. This year alone BNPL transactions are on track to grow by 14.9% in Canada[R2] , with a compound annual growth rate of 9.7% forecast over the next 5 years.
These short-term financing services are most often presented as an option at the payment stage of an online purchase. Selecting the service redirects the customer to the provider’s site to create an account and from there to choose the terms of their repayment plan to complete the purchase. Platforms including Affirm, Clearpay, Klarna, and Zip, all offer various repayment terms, geographical coverage, and credit limits, which must be considered when choosing a preferred partner. \
6. Second-hand marketplaces are on the rise
As the cost of living rises with inflation, buying new seems less and less attainable for price-conscious consumers and consumers conscious about sustainability. 2024 is poised to see an eruption in an already thriving industry. Consider eBay, Facebook Marketplace, Depop, Carrot, and ThredUp, platforms that have dominated the second-hand market, their success has set the backdrop for a new frontier in 2024, where we will see C2C compete against the likes of B2C and even B2B.
Some major retailers are capitalising on this trend, Walmart’s liquidation auctions on their consumer marketplace, or Lululemon’s “Like New” resale website. Smaller retailers will need to show the same flexibility, to experiment with price points that make sense, and new logistics and value chains to make their respective e-commerce platforms profitable and grow their customer experience.
Implement With Intention
Keeping abreast of the developments in the market won’t serve you if you are not ready and willing to implement. Implementation must be thoughtful, 2024 is also the era of being meticulous in building consumer trust, so keep this mind before you adopt an attitude of move fast and learn lessons later. It’s imperative to be well-informed, intentional, and effective - just like your consumers.
Before you jump in, consider which of these trends fit your brand, your industry, and your customers’ needs. Consider aspects such as the identity of your consumer base and what drives their loyalty, which new markets you’d like to expand into in the coming years, how your data is being collected, and what story the data is telling about your customers, and which of trends align with your vision and values.
Then ask yourself that one golden question, “What would my customer want?” to find your answers. The message at the heart of this year’s shifts is simple, it’s all about the consumer.
Put The Customer Experience First
The consumer experience is everything in 2024 and that will continue. Customer experience is the common denominator in these trends and customer experience will continue to change e-commerce. E-commerce is set to offer customers innovative, personalized, and increasingly seamless shopping experiences. By identifying which trends fit your brand and investing in technology to enable your adoption of these trends, your business can surf the e-commerce wave of 2024 and find success.
