In recent years, the e-commerce market has been growing by half a trillion dollars annually. Quarantine-related restrictions that were introduced in 2020 accelerated that growth nearly two-fold. These factors served as an impetus to the global economy transitioning to a more technological path:
- when these restrictions were in place, people were forced to start purchasing goods and services online and have since grown accustomed to it;
- closed borders in 2020-2021 caused a boost of digital working tools;
- forced closure of offline outlets and the launch of online order-and-deliver services;
- many people starting to work remotely;
- online education playing a bigger role.
In 2021, the businesses that survived all the restrictions made the appropriate notes and accelerated their migration online. Many companies see this as just a new opportunity, since after a whole year buyers got used to the online format and have come to appreciate the advantages it brings them.
Let’s take a look at the basic statistics of online business and analyze them.
15.5% of retail sales happened online in 2020. It will be 95% in 2040
In addition to causing a wave of bankruptcies, the lockdown-related measures accelerated the introduction and adoption of new sales models. For example, in many countries, groceries delivery services with a minimum order amount started popping up.
Services that delivered food from restaurants or supermarkets are nothing new, but the pandemic forced people to stop going shopping in person, instead of only using these delivery services, even if all they needed was just 1-2 products. Judging by these examples, in the coming years online order-and-delivery services will emerge in areas where before it seemed either impossible or unnecessary.
According to statistics, customers are most reluctant to make expensive purchases of goods they’re used to actually seeing in real life. But the pandemic and ensuing restrictions forced some companies to tackle this issue as well. That’s how it became possible to purchase real estate and cars online.
Online viewings and fitting became possible thanks to 3D visualization technologies. The advent of VR technology also meant that making such purchases was now more comfortable, which is why the “by 2040 95% of all sales will be done online” prediction is more than possible.
73% of online sales will go mobile by the end of 2021
66% of people regularly access the Internet from their mobile devices. The spread of mobile Internet is linked to some countries lacking computers, the residents of these states not being computer-savvy, as well as the Internet speeds leaving much to be desired.
Nowadays, any company’s (and even more so — any online store’s) website must work properly on any device type. This is important not just because clients value it, but also since it helps with SEO. If the resource isn’t easy to use, if there’s no quick-order feature.
69.9% of visitors will leave the website even if they’ve already added the products they came here for to their carts. If additional actions, like creating a profile, are required, the online store stands to lose an additional 23% of clients. That’s why a fast-working website and a UX design is hardly a whim, but rather an absolute necessity for effective sales.
In January 2021, 53.6% of the total number of Internet users had social media accounts. When spending time on social media, people solve multiple problems at once: they receive news, chat with friends, entertain themselves and relax. The number of social media users is also so large because resources are adapted for all device types and don’t take a lot of traffic to load.
That’s why in some countries, shopping on social networks and even instant messengers has become a common activity. This suggests that social media will develop not only as ad tools but also as direct online sales platforms.
In some countries, Facebook, Instagram, Wechat have already introduced similar features. And recently Telegram has also added a way for users to use the messenger to host their online store This is yet another lowering of barriers between the seller and the buyer that will benefit small businesses with small online marketing budgets.
The main appeal of online shopping is the ability to choose a product and purchase it 24/7
17% of online shoppers will purchase a product as long as it can be delivered quickly, another 14% — if it’s just in stock. 45% of clients will refuse to buy a product if the delivery costs are too high or will be carried out at an inconvenient time.
Technology causes people to get used to comfort and in the near future, logistics will be forced to make a serious leap to keep up with the growing e-commerce turnover.
Fulfillment services, an increase in the area of warehouse logistics, smart distribution centers, autopiloted freight transport that won’t need rest breaks — these are the logistics trends that will dominate in the near future.
The second major issue, the solution of which is a bit behind schedule, are the massive volumes of returned products. In 2020, refunds amounted to $205 billion, and that number is expected to reach $348 billion by 2023.
Unlike retail and offline stores, the costs for returning are borne by the seller, meaning this problem must be solved with the help of more technologically advanced logistics. And big brands are already starting to switch to Direct-to-Consumer (D2C) models, for example, Nike is ditching official sales on eBay and Amazon in favor of developing their own platforms for interacting with customers.
Attracting a new client is 6 times as expensive as retaining an existing one
More personalized offers through targeting, native ads, bloggers and influencers are already becoming the main tools of online marketing. This trend will only become more relevant over time, the client is fed up with direct types of advertising and has less and less trust for it.
Ad offers must become even more personalized, despite iOS 14 letting users choose not be tracked and Google’s announcement about its decision to no longer collect data from Cookies. This looks like two monopolists introducing new data-gathering technologies because they don’t want to share their intel with the other market participants.
For example, Google plans to replace Cookies with FLoC data — Federated Learning of Cohorts — and use these mechanisms to increase conversions to 90 cents per ad dollar. Obviously, this will be possible with more accurate data and a more personalized approach to users. Marketers also claim that more personalized offers can help multiply ad conversion rates.
Online education market grew from 13.1% to 16.3% in 2020. Remote jobs increased by 30%
The rise in the number of remote jobs began even before the pandemic. The ensuing restrictions only accelerated the process. With more and more companies migrating online, the need for IT workers has also grown. Plus the planet’s population, in general, is growing as is the number of new students from third world countries hungry for knowledge. According to statistics, the world will need 1.5 million additional teachers in the next 10 years.
Only online education can provide such resources. In addition to being convenient and fast, this type of training has a number of other advantages:
- new technologies can be implemented when teaching any science or discipline
- continuous educational courses;
- creation of educational ecosystems in which a person can study in several areas while needing only Internet access;
- lower expenses compared to traditional educational establishments.
The transition to a new technological system implies not only economic growth and improved quality of life for the people, but also the ruin of more conservatives sectors of the economy and massive layouts.
Many occupations that can be entrusted to AIs (and subsequently automated) will disappear in the near future. At the same time, entirely new jobs will spring up and the needs of new sectors of the economy will increase.
Online education will have to solve the problem of not only making knowledge available that still exists in much of the third world but also preparing the population of developed countries. This is a huge challenge for society, because should it fail, the number of unemployed will skyrocket, adding to an already long list of global problems.
This article was written in partnership with Galaksion.