E-commerce continues to evolve at pace, embracing and adopting the latest technologies to craft new experiences for customers who want innovation when they shop. In the post-pandemic era, the shift to digital retail has transformed the online space and how it interacts with the physical high street. It has created a multichannel sales funnel that every retail business must master.

UK E-commerce sales have remained robust, according to data from Signifyd. The current squeeze on consumers’ budgets is having an impact across the E-commerce landscape. For example, over a quarter (77%) of consumers intend to cut their Christmas spending.

Also, the requirement that customers use multi-factor authentication has dampened the development of customer experiences. However, retailers should still invest in new technologies, as brand differentiation is a significant component of successful E-commerce companies today.

Despite these potential barriers to growth, E-commerce is forecast to see massive growth. According to Juniper Research, the global number of unique E-commerce users will reach 4.4 billion by 2027, with the vast majority of these new shoppers from emerging regions, including the Asia Pacific, specifically identifying Bangladesh and Pakistan with over 600 million potential new E-commerce users.

Asia will see millions of new E-commerce customers over the next five years.

Speaking to Silicon UK, Nathan Lomax, co-founder and director of Quickfire Digital, commented: “In my experience, most businesses underestimate how much work there is in internationalisation – you’ve got to think about fulfilment and warehousing, and how that will affect shipping charges, payment options and gateways, SEO, social media and country-specific marketing habits, copy translation and much more. One of the major decisions early on is around your website structure – are you going multi-domain or multi-store? Are you going to create a website for each country, or are you going to use subfolders to display the relevant website? Both have their benefits and disadvantages, so it’s a big decision to make.”

How E-commerce sites are being built has also been changing at an increasing pace. Composable commerce is being embraced to deliver the flexibility digital retailers need to reach their audiences. Filip Bech-Larsen, CTO at Umbraco, comments” “We’re seeing a move towards composable commerce, which allows organisations to select the software components that meet their customers’ requirements now and in the future. Taking a composable approach to building the tech stack allows organisations to more quickly and economically incorporate fresh DXP elements such as automation, PIM, DAM, AI and personalisation software to put customer experience at the forefront.”

Filip Bech-Larsen, CTO at Umbraco

Bech-Larsen continued: “The way that customers interact and transact with brands has fundamentally changed. E-commerce is no longer limited to selling online. Customers might begin their buying journey on a website, do product research in a physical store, and complete their purchase on a smart speaker. This is also driving the adoption of headless technology, which decouples back-end databases from public interfaces and provides the flexibility to engage with customers on their preferred channel, or device, while providing consistent content and a seamless customer experience across all of those channels.”

More than a click or tap

Research from Google states that over a quarter (27%) of the global online population now uses voice search on their mobiles, with 74% searching in-store for product and pricing information. And 80% of shoppers want to complete their purchases as quickly as possible.

Clearly, connecting business systems continues to be an area of E-commerce where enterprises can innovate. How will the concept of “phygital” retail (blending physical and digital experiences) shape the future of e-commerce? “From a back-end perspective, Shopify is already doing this superbly through its point-of-sale (POS) integration directly with a business’ Shopify store. All physical store information is immediately available within the Shopify back-end, ensuring up-to-date inventory and accurate customer records and purchase histories,” explains Quickfire Digital’s Nathan Lomax.

Nathan Lomax, co-founder and director of Quickfire Digital

“Syncing platforms – particularly within customer service – is something I’d always recommend. Customers, rightly, get frustrated when they feel they’ve told a business more than once about an issue – to them, it doesn’t matter if they are going in-store, sending an email, or messaging on social media, and there are plenty of providers who can help with this.”

And no discussion of how E-commerce may develop is complete without at least touching on AI. Dominik Angerer, CEO and co-founder of leading enterprise tech Storyblok outlined his views to Silicon UK: “Generative AI has been one of the most exciting technological breakthroughs in recent years. The accessibility of applications like ChatGPT has captured the imagination of tech experts and laypeople alike. Such is the breadth of possible applications – for good and for bad – that it seems like generative AI is the only real game in town. While there’s no doubt that it’s going to play a massive role in the development of technology over the next few decades, such is the degree of hype that it is easy to find ourselves staring too far into the distance at the expense of seeing the opportunities that are here and now.

Angerer concluded: “Within the marketing industry there’s particular interest in generative AI because of its ability to automate so many routine tasks, create collateral and enhance personalised engagement with customers. The reality is that, save for a few use cases, generative AI is not quite game ready. Reliability and quality of outputs combined with a whole host of legal and ethical questions are likely to limit wide scale adoption in the short to medium term.”

New E-commerce spaces

How your business and the brands it creates interact with each customer must be integrated. The omnichannel is alive and well across digital commerce. However, this multichannel approach still requires personalisation and customisation to remain relevant to each customer. As Graham Burton, Chief Technology Officer of Planning-inc, explained: “Probably the most important trend is incorporating the ‘effortless’ component. Customers today want effortless experiences in exchange for their loyalty. Truth be told, they demand personalised omnichannel experiences to be always satisfied.

Graham Burton, Chief Technology Officer of Planning-inc

“The trend has driven some of the world’s most popular brands to make ‘effortless’ customer experiences their north star. For example, take consumer technology retailers. Some now have incorporated features that enable customers to make a purchase by simply double-clicking a button. Online flower delivery brands make it incredibly easy to order in just a couple of clicks, whilst intelligently suggesting relevant complimentary items such as chocolate or wine – helping encourage upsell opportunities. Large online retailers are leveraging their huge catalogues of products to continuously enhance their recommendation engines and make hyper-relevant product suggestions. Simply put, in today’s market, effortless experiences that are personalised to the customer reign supreme.”

Shopping in VR will mature as virtual spaces expand.

Social media as a platform for commerce has been developing, but Ken Platt, Director of eRetail and Marketplaces at Wunderman Thompson, thinks we are about to see something new across these channels: “Right now, 65% of consumers globally have already tried out social commerce, and this is before many platforms have even fully unlocked the potential of in-app purchases. We’re talking about a trend that is about to skyrocket, which isn’t surprising, seeing as 80% of shoppers crave a ‘compressed commerce’ experience that takes them from liking to buying in a flash.

“We’re entering a period where social media and E-Commerce will mesh so well they’ll be indistinguishable. This is simply Commerce 101 evolving — reducing the clicks between desire and acquisition, leveraging the powerful platforms where people are already engaged and conversational.”

Platt concluded: “We also expect to soon see native checkouts become integrated directly into the brands and retailer platforms, a promising goldmine for those who get there first. It’s an open field for innovation, promising a shopping journey as fast, easy, and enjoyable as browsing your go-to social media feed.”

Filip Bech-Larsen, CTO at Umbraco, comments, “Consumer behaviour drives technology development. The rapid advances in e-commerce over the past three years have only happened because more people were making online purchases. Data from the Retail Sales Index time series reveals that online sales can fluctuate in response to major, long-term events, such as the pandemic, or even temporary changes in the weather, such as the un-seasonally rainy July, which saw online sales increase to 27.4%, up from 26% in June. With more than a quarter of sales now taking place online, organisations must meet customers where they are, whether that’s online, in-store, on a headset, or on a smart speaker.  API-based integration, composable architectures and headless technologies provide organisations with the flexibility to respond to these rapid changes in consumer behaviour, so that customer needs are met and business opportunities are not lost.”

With Dominik Angerer, CEO and co-founder of leading enterprise tech Storyblok, pointing to the virtual retail spaces that are being built right now: “While media interest in Zuckerberg’s Metaverse vision dissipated relatively quickly, the fundamentals behind virtual and augmented reality experiences have not changed. Nearly every piece of research shows that consumers find AR and VR experiences more engaging than all other marketing formats. It’s also important to remember that VR and AR is not just confined to creating virtual sales experiences for consumers. It can also be used for a host of other marketing functions such as designing shop layouts, planning and selling space or sponsorship for events, and prototyping the look and feel of products. To service these use cases there’s a fast growing ecosystem of martech startups developing numerous exciting applications. Take a look at recent news from ShapesXR for some inspiration.”

Ultimately, the future of E-commerce will be driven by customer demand and expectation which, in turn, are influenced by the technologies they use. Multichannel retail experiences are maturing with immersive technologies developing fast. Logistics and back office are also changing as retail businesses look to innovate for an audience that expects change from the brands they covet.

Jamil Ahmed, Distinguished Engineer at Solace.

What emerging technologies do you see having the most significant impact on the future of e-commerce?

“There is a wide range of exciting technologies entering the e-commerce space. Examples include augmented reality to virtually ‘try on’ outfits and digital assistants that can converse more like humans. The issue businesses face is how to create a system where all these new technologies can function harmoniously together. This is because the technology powering these experiences is often layered on top of existing legacy technology and operational systems. The result is multiple sources of truth that are not always in sync with each other. Event-driven architecture, or EDA, bridges this gap, ensuring that all data flows in real-time, creating a consistent, always up-to-date system of record. This sets the right foundations for the emerging technology to build on.”

How will artificial intelligence and machine learning shape the customer experience in e-commerce?

“The instant gratification of buying in-store and taking a product home is now satisfied by the “buy now” button on a computer or phone. Retailers now worry about combating the feelings of buyer’s remorse and reducing product returns. Artificial Intelligence capabilities can help to better match products and offer to an individual – with their unique preferences and buying history – instead of broadly targeted campaigns that suffer from either low sales, or high return rates. When done effectively, this personalised bespoke shopping experience will be a win for both the customers and the retailer, offering marketplace differentiation and fostering customer loyalty.”

What are the critical trends in personalisation and customisation that e-commerce businesses should pay attention to?

“The seismic shifts in shopping and spending habits, paired with greater demands for a succinct retail omnichannel, have forced companies to invest in their digital systems to provide multiple and varied shopping experiences. One advancement which has majorly shaped the e-commerce experience is personalised recommendations and promotions by better leveraging the troves of data retailers often have access to. Data such as purchasing spikes from trending products, historical data on seasonal trends, and observed levels of product returns can all inform retailers to cope in the world of fast fashion, social media influencers and the newly cost- or eco-conscious shopper.

“To accomplish this, retailers must not only have access to this considerable customer data—but must also effectively manage it and be able to react to it in real time. When done well, this enables operational efficiencies, too, such as not selling a product that is actually out of stock. Implementing EDA helps to create this ‘joined-up’ IT that can impact multiple areas of the business.”

What are the significant challenges and opportunities for e-commerce businesses regarding data privacy and security?

“Due to the large amount of customer personal and financial data businesses hold, they are an attractive target for data breaches, as demonstrated with the Shein data breach a few years ago. Cybercriminals have begun using phishing emails to manipulate customers and employees into revealing sensitive information, which will require e-commerce businesses to educate their employees and create countermeasures such as email filtering systems.”

Can you discuss the potential impact of augmented reality (AR) and virtual reality (VR) on online shopping?

“AR and VR technologies, often integrated with AI, allow customers to visualise products in real-world environments before purchasing. We could see a future where you can go shopping with your friends without leaving your bed, chat, and make decisions together. With this in mind, the number of products returned should decrease as customers have a more accurate understanding of what they’re buying. There are potential gamification elements to both AR and VR experiences, which will increase the chances of repeat customers and a more enjoyable experience. Ultimately, e-commerce businesses which embrace this will have an advantage over their competitors as they will cater to modern shoppers.”

How might blockchain technology transform the supply chain and payment processes in e-commerce?

“Blockchain technology can transform the payment process in many ways, including enabling secure, peer-to-peer transactions without the need for intermediaries like banks or payment processors or its cryptographic security, making it resistant to tampering. Blockchain’s potential in e-commerce goes beyond financial transactions, as the supply chain can be improved by enhancing transparency and allowing stakeholders and customers to trace the entire journey and authenticity of products. It can also improve inventory management, reduce counterfeiting and enable real-time tracking and monitoring of products.

Despite its potential, Blockchain technology definitely has its challenges, such as scalability and regulatory compliance with existing systems. The key challenge is its potential to be incompatible with current systems, which requires event-driven architecture to be the backbone of a new system.”

What do you foresee as the future of mobile commerce (m-commerce) and its significance in the e-commerce industry?

“Mobile commerce has seen a boom because today, a mobile device best represents the place where phygital experiences exist. A mobile device very effectively and versatilely performs the multiple roles of providing a shop window, the ability to walk the product aisles, complete payments, be the identifying key to connect the digital user to the physical world, and then enhance and personalise that physical experience with digital elements such as augmented reality. The intrinsic location-aware nature of a mobile device will be fundamental to new capabilities such as location-based services and product offers. As phygital experiences develop, mobile devices and mobile commerce will play an outsized role.

What new payment methods and technologies are likely to gain traction in e-commerce?

“Newer banks embracing technology have an entirely different approach than incumbent banks because they started in an era where cloud computing was utterly standard. They also have the advantage of choosing where they want to operate within the spectrum of banking services. This allows them to focus on impactful areas whilst benefiting from having no technical debt, being naturally early adopters of new technology, and typically operating in cloud-friendly environments.

“The incumbent banks have the advantage of holding significant amounts of information, with the downside of technical debt tied to legacy systems largely because they cover so much of the market. It is often the case that when they decide to add new services, they stick it onto previous capabilities, increasing exponentially the amount of technical debt.

“Ultimately, user demands for convenience and simplicity will be the driving factor of how payment journeys change. We may be seeing the increasing adoption of payment methods such as QR code payments, integrated ‘buy now, pay later’ checkouts, and payments made through consumers using registered accounts not with banks but other e-commerce companies.”

How will the concept of “phygital” retail (blending physical and digital experiences) shape the future of e-commerce?

“Blending physical and digital experiences to create “phygital” experiences can only be successful if the dissonance or disconnect between the digital and physical worlds can be eliminated. An example would be order placement successfully completing in the digital experience, to later be met with product unavailability in the physical experience. Retailers need to work in advance to make sure real-time capabilities are prioritised; and wherever the various IT system’s located (in the cloud, in each store, etc.), they can communicate seamlessly and instantly to stay in lockstep. Essentially, for retailers to succeed there has to be real-time integration measures in place to ensure the experience works as smoothly as possible. Whether it’s inventory tracking across both online and offline channels, or customers starting their shopping journey online and continuing it in a physical store, the two have to be frictionless.”

What are the implications of changing consumer behaviour and expectations on the future of e-commerce?

“E-commerce will need to embrace what every customer of today values: convenience and simplicity. They need to do this by creating innovative ways to make the customer experience as easy as possible. As mentioned, emerging technologies such as virtual assistants and recommendation systems are great ways of doing this, requiring event-driven architecture to make sure all data flows in real-time, creating a trusted and actionable system of record. Additionally, there will be added pressure on retailers to compete over new technologies such as VR and AR whilst also protecting business and customer data from cybercriminals. With consumers getting increasingly guarded about the data they share, retailers will need to work even harder to foster trust for data sharing consent, and reward those that do so.”

David Howell

Dave Howell is a freelance journalist and writer. His work has appeared across the national press and in industry-leading magazines and websites. He specialises in technology and business. Read more about Dave on his website: Nexus Publishing. https://www.nexuspublishing.co.uk.

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