Top trends and predictions that will shape e-commerce in the next five years

By Kevan Bishonden, Co-Founder, Selazar

There is no doubt that e-commerce growth is going to continue on its upward trajectory across global markets – accelerated by the Covid pandemic. Overall, we've seen a spike in the acceleration of online shopping that would have previously occurred over five years, in a year. 

Grocery e-commerce alone has gone from 4% to 12% of sales. As our lives keep dipping in and out of ‘normality’, businesses in this space need to be ready to provide customers with new, flexible options that match their needs around volume, delivery, speed and packaging customisation.

The key challenge will be to ensure operational efficiency and growth, while building on consumer trust. Here’s four trends and predictions that will be key to success for e-commerce businesses in 2022, and beyond.

It’s all about the distinctive service proposition – not just technology

Although technology is the enabler of the online revolution, there are other factors that are increasingly playing an important role. One of those is service.

Going forward, having a distinctive service proposition will be just as important as the technology on which a business is built on. Retailers today need technology to solve a problem, address something that is an issue for them.

It is about making life easier, simpler, and more flexible when running an efficient operation that drives business growth and an improved customer experience.

Advances in e-commerce technology are facilitating enhanced service propositions. Retailers of all sizes are taking advantage of new, technology driven approaches to overhaul their approach to online retail. Fulfilment technology is a key part of this. 

3PL logistics and B2B partnerships have advanced the ability of 24-hour final mile delivery service, increasing rapid delivery, and allowing businesses to even sort order placement by relevance for repeated at-home customers – making what was once unfathomable, a reality. 

What will remain attractive to the market are platforms bringing together multiple different processes to solve headaches in an integrated and simple way, that presents the client and the end consumer with a distinctive service.

Customers’ wants, not needs, at the centre

In the near term, we will finally see e-commerce personalisation done right, driven by the brand proposition. If the retailer is clear on what their market stance is and what they're trying to achieve for the customer, building a logistics or fulfilment service to support that goal becomes crucial.

We will see businesses really educating themselves about the best options out there and making informed decisions that match expectations to tangible results.

When you don't know what you need, you can either overspend or exceed the payment limit of your customers, which is that fine line between either under delivery, or unnecessary loss of margin. 

It’s counter intuitive having a premium luxury brand with a cheap and cheerful delivery service. Advanced fulfilment services create new personalisation possibilities for retailers, that include mix and matching in terms of the mass customisation features.

There's a lot of added-value propositions to offer to a customer – going from three to five day service in unbranded packaging, to offering a really ‘white glove’ service where you choose the box parts, metallic boxes, what tissue papers use, and what delivery service to use, what's new etc. 

Ultimately, it’s about offering the best customer proposition in terms of their unboxing experience, their delivery needs, timings, and speeds.

This way, sellers can create something that is suited to the brand that is executable on a repeated, consistent basis - and the customer can then start to rely on a specific type of service that stands behind the product.

E-commerce will grow exponentially – and so will consumer trust

As e-commerce continues to grow, we will see higher penetration in more sectors – underpinned by the pandemic. Beauty is one of the fastest growing sectors online at the moment, highlighting a significant shift in consumer behaviour.

Customers wouldn't necessarily buy makeup online before, for the simple reason that they want to see the colour and the texture - maybe in the same way that buying white goods or furniture was done years ago. Now, buying such items online is considered a ‘normal’ part of the overall customer journey.

A lot of this has been made possible through growing confidence in returns. With a sales proposition that includes an easy and simple to use return process, for example, actually gives that confidence to be able to trade in a new way. 

Brands are now moving towards winning customers’ trust and confidence to buy something they have never ‘truly’ seen. We’ve seen a lot of local brands spending more time developing their online reputation, building customer trust online and improving the unboxing experience by investing in custom packaging.

This is a trend, which we will continue to see being automated, and extending to the high street. There will always be items that customers can purchase five minutes down the road.

However, because that confidence in online shopping is growing, and the service is getting better, people will move online for shopping they wouldn’t have previously considered.

Need for - even more – speed

The industry is gearing towards speed more than ever before. As a result of the growing trust in e-commerce, customer service and delivery expectations are very high.

However, many smaller e-commerce brands, without the operational bandwidth to offer the same service as big retailers may struggle to manage such a complex network of operations without the help of the right technology partner. 

The unexpected can occur at any time, resulting in delays, so everyone needs to be very aligned.  That’s why we’ll see more businesses investing in smart and scalable fulfillment services – focusing on speed, efficiency, and quality.

In some instances, speed isn’t all important, unless it’s accurate, precise speed -delivered at the right time. How many people who buy a TV online, actually need that product the following day? 

What we will see is the market moving towards delivering on what customers want, as opposed to what they need – which are two separate things. What retailers have done historically is fulfil the want, rather than the need –stretching themselves in the process.

What the need really starts to say is, ‘I want this delivered on a particular date, in a particular time’. It might not be the next day – 76% of customers do report that have experienced failed first attempt delivery in the UK.  So, there's an inherent cost of failure that's been built into the market and we need to get away from that. That, coupled with speed. 

In 2022, we’ll see a shift and a rebalancing, between speed and certainty. There are certain things that you need, and you need to pay a premium for those to be delivered quickly.

But providing customers with that certainty of a quick but specific to their needs delivery experience, is what will give smart e-commerce businesses a real edge.