What is Global E-Commerce?

Sometimes referred to as borderless business or cross border commerce among other things, global e-commerce is critically important for any business looking to expand in 2020 and beyond.

However, while it is important, navigating the nuances of cross border e-commerce can be complicated given that there are a lot of moving parts.

At its core, global commerce is the selling of services or products across international borders. This is usually a function of the business’s country of origin that is typically determined by the place of incorporation or its founding.

According to a Shopify study, global eCommerce sales are expected to hit $4.8 trillion by 2021 with shoppers buying up to $2.1 billion in goods and services in the period under study.

While these are huge and probably daunting numbers, they are invigorating given that they show the potential in global eCommerce for a company willing to take advantage of the opportunity.

Shippers in the US are already vying to get into a potential CBP “fast lane” where shippers, carriers and online marketplaces can provide advance shipment data to US Customs under a program called “Section 321 Data Pilot” and in return experience fewer inspections when their cargo arrives in the US.  Fewer inspections mean faster delivery times which is like gold to e-commerce sellers.

Moving forward, the following are some of the ways in which global eCommerce will be trending in 2020:

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Mobile E-Commerce and Devices will Become Even More Important

When it comes to global e-commerce, it is certain that the mobile handset will become even more important in the coming years.

While most businesses used are optimized for desktop, mobile search overtook desktop in 2016 and going forward, the trend towards mobile is going to accelerate even further.

While it may seem counter-intuitive to optimize for mobile, it makes a lot of sense particularly given the fact that emerging markets where eCommerce is growing exponentially are leading in the use of mobile over desktop.

In fact, a study by hosting facts showed that developing countries such as China have as many as 98% of their users accessing the web through mobile devices. The same goes for countries like India that are the new frontiers for global eCommerce.

With up to 45% of eCommerce decisions expected to be made on mobile by 2020, the switch to mobile makes a lot of sense for any business seeking to expand. It is even more interesting when you consider the fact that more than half of buyers use their mobile devices to research products before buying.

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Fully Personalized Shopping Experiences will be Standard

Personalization in eCommerce has become huge in the recent past and the trend looks like it will be accelerating even further in 2020 and beyond.

The trend is driven by customer’s expectation of personalized services which means that businesses have to make it standard if they are to take advantage of the trend before competitors catch on.

However, personalization has undergone an evolution over the past several years and simply acknowledging a customer by name as used to be the norm will no longer suffice. Customers now expect an individualized and, unique and dynamic shopping experience from every interaction with the business.

This requires an analysis of a range of data such as buying history, demography, browsing behaviour and other data needed to display or recommend products or services the client may need to make a proper buying decision.

The implementation of personalization strategies is as varied as there are businesses out there. For instance, a very effective tactic is to display relevant items as recommendations to the shopper depending on the items they already added to their cart.

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Merchants will be Getting Closer to Perfecting Omnichannel Marketing

The lines between traditional and modern digital analytics and measurement are becoming even more blurred.

Going forward, multiple channels such as tracking beacons, facial recognition, in-person data collection with a camera and Point-of-Sale data collection will become even more prevalent.

According to an HBR study, up to 73% of customers are now making use of multiple channels when shopping. This makes it critical for eCommerce businesses to understand the ways their customers buy, their motivations for purchase, and the channels they use the most and why.

There are a variety of ways to determine the working of multi-channel shopping. For instance, shoppers can research the product or service on their mobile device and then either buy online or in the store and then pick or have the product delivered.

Businesses can increase the average order value by using more channels. In fact, the same study showed that shoppers using 4 channels or more spent up to 9% more as compared to those that ordinarily shopped using just one channel.

It is thus critical to map every touchpoint as it will help to complete the puzzle and provide the data on the customer’s shopping journey. This will help to collect critical data that can then be used to allocate marketing budget or determine how to promote the product or service.

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Fully Personalized Online Shopping Experiences

According to a 2019 research commissioned by Sapio Research, personalization is one of the foremost considerations for B2B customers.

Ecommerce buyers are now looking for functionalities such as artificial intelligence, predictive ordering, and personalization in their buying decisions.

The research which polled 560 buyers showed that between 18 and 20 percent of buyers selected their manufacturer, distributor or wholesaler according to how much they provided a personalized shopping experience.

Going forward the demand for predictive analytics and personalization will continue to become even more intuitive. It will combine demographics, browsing behaviour and order history to provide the fully customized shopping experience customers want and need.

To provide added convenience and value the trend is to provide customized checkout processes, navigation experiences, personalized websites, and product catalogues tailored to meet each buyer’s needs.

Vendors such as Amazon and Walmart have been investing in ERP systems to collect more data. Such systems also allow businesses to connect to the online marketplaces thus optimizing average order values and conversions.

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Ecommerce Goes Global

The Asia Pacific region (APAC) is projected to have higher eCommerce sales than the rest of the world combined by 2023.

China and APAC, in general, are set to be the next growth horizon. The technological advancements, rapid urbanization, a host of private-led initiatives,  particularly in China means that up to 85% of the world’s new middle class now lives in APAC and China.

Moreover, China and APAC have undergone a renaissance that has driven a lot of growth in manufacturing and the export industry. This makes the region a critical component for all businesses intending to capture new markets despite the many challenges.

Some of the challenges that businesses have to deal with include:

  1. Cultural differences – The Chinese use eCommerce differently from Western consumers as they prefer social commerce, marketplace and mobile over single standing websites
  2. Blocking of Social Media in China – Google, Facebook, Youtube, and Instagram are unavailable in China and companies need to learn how to market using local social media such as WeChat, Youku and Weibo.
  3. China’s Firewall – Sites hosted on foreign servers tend to load very slowly and this negatively impacts search engine rankings and conversion rates.
  4. A requirement for the Chinese Internet Content Provider License – All domains operating in China need the ICP which is one of the most difficult to obtain in the region.
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More Consumers Will be using Social for Shopping

When social media first came onto the scene, it was all about making personal connections. However, now that social media operators have figured out how to sell using their platforms, they have are increasingly becoming more than just a place for connecting with friends and family.

The leaders in the space such as YouTube, Instagram, Facebook, Twitter, and Pinterest have made huge strides after adding social selling features such as the shoppable post and buy buttons.

With so many people spending a lot of time online on social media asking for recommendations and browsing products, a feature such as a buy button will boost sales.

This is especially true among millennials who find the products they need and feedback from their friends that may have already purchased or used the product or service.

Companies can also collect customer data and use it for better targeting and personalization of recommendations to shoppers that have a habit of searching for particular products.

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Voice Commerce is Becoming More Important

Voice browsing and voice commerce which refers to any purchases made using a voice device are trending upwards and will only continue to rise in 2020 and beyond.

Given the trend towards mobile search over desktop, voice searches are expected to hit 40 billion a year by 2022. This is a 20 fold increase as compared to 2019.

Another trend to watch out for in 2020 is the rise of voice technologies such as Google Home and Amazon Echo that have revolutionized the way people interact and shop online.

Given such trends and statistics, it is critical for eCommerce merchants to optimize for voice and mobile searches, which could result in significant growth in sales.

Merchants are taking advantage of mobile and voice search through techniques such as optimizing for mobile by making their websites mobile-friendly, structuring pages to have the most critical information front load, and simplifying checkout processes.

Websites can also be optimized for voice search through optimization for answers to common questions, switching to HTTPS, targeting keywords and using structured markup data.

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Customers will Demand More Payment Options

While American shoppers are reluctant to use mobile payments, the tech-savvy populations of countries such as China are adopting technologies such as Wechat Pay and Alipay. At 1.7 billion users, these two payment solutions alone have more than 10 times the user base of Apple Pay.

As such, in emerging markets such as China and other markets where these new payment technologies have spread, the number of payment options available to the shopper could significantly improve sales.

On the other hand, an eCommerce business stands to lose a lot of business if it does not support the preferred payment method of their customer.

As such, going into 2020 and beyond, digital wallets such as Samsung Pay, Google Pay, Apple Pay, Alipay, WeChat Pay, and Paypal will only become even more important for eCommerce businesses.

The fact that platforms such as WeChatPay have partnered with popular card providers such as JCB, Visa, Discover, MasterCard, and American Express means that eCommerce is moving towards the integration of more payment solutions.

Moreover, the adoption of more payment methods also allows for frictionless shopping experiences online which can result in more sales and businesses that embrace these technologies stand to gain a competitive advantage.

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Online Advertising Will Peak and Begin Changing

In 2018, marketers spent 273 billion in digital ads which comprised 39% of all advertising in the world. Moving forward, digital ads will hit 53.6% in 2020 and 60.5% of all advertising in 2023.

As it stands, Facebook and Google account for more than 61% of all advertising in the United States. Google is projected to increase its revenue from digital ads in 2019 by 22% as more advertising shifts online.

However, the exponential growth in online advertising is reaching its peak and with Americans having to see between 4000 and 10,000 ads every day, the interruption model may peak and start declining going forward.

With greater saturation, shoppers are going to become more expensive and harder to reach through conventional “interruption-based” pay per view and pay per click campaign.

In 2020, the popularity of embedded and native brand exposure which had been rising in the past few years is going to become increasingly popular and effective. More brands will be shifting away from the crowded space of Facebook and Google to advertise in more direct ways.

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Same-day Shipping and Same-day Delivery

Customer expectations are rapidly changing and eCommerce businesses have to change to stay in the game.

Same day delivery and same-day shipping have almost become the norm with as many as 80% of consumers at checkout preferring same-day delivery. This trend is likely to accelerate in 2020 and in years to come.

Given such trends, same-day shipping and expedited delivery are going to become an even more critical component of maintaining competitiveness and boosting customer satisfaction and the overall shopping experience.

This development means the optimization and auditing of supply chains, automation of fulfillment processes to reduce human error and slash delivery times is something that global eCommerce operators need to embrace.

Other measures that could be taken include hiring additional staff outsourcing to professionals such as UPS, FedEx or using digitally-focused distribution centers that have the muscle to deal with rapid fulfillment.

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Smart Warehouse Management Including Supply Chain and Inventory Management

Smart warehousing is the new frontier that is going to become more ingrained in 2020. Warehouses will increasingly be using IoT enabled smart devices to track operations in real-time.

IoT enabled devices will not only allow monitoring and tracking but will also reduce human error during handling and make automation easier.

In addition to tracking, eCommerce will be using warehouse management solutions such as GPS and RFID tags for accurate product management, decision making and instant monitoring.

These technologies also help in ensuring the integrity of goods in the warehouse or in the supply chain through features such as humidity sensors and temperature monitors.

Lastly, the trend is moving towards the outsourcing of warehousing options to third-party aggregators such as eBay, Walmart and Amazon that can provide more streamlined order fulfillment processes and deliver to most zip codes in the US and across the globe.

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In Closing

These trends are going to be significant going into 2020 and beyond. It is critical for e-commerce businesses operating on the global stage to understand how they affect their operations if they are to remain competitive.

While some of the trends may be outside the control of online merchants or seem complex for a small operator, having a good understanding of them and adopting strategies to incorporate or deal with the changing marketplace will be key for success in eCommerce in 2020.

Global eCommerce operators need to understand geopolitical factors such as licensing in China, expansion into international markets, same-day delivery and shipping, optimizing for mobile and voice search, personalization, Omnichannel marketing and other trends so that they can survive and thrive in the complex world of eCommerce.

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