The Ever-Evolving Ecommerce Journey
By: Eric Christensen
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This post was originally published in TotalRetail.
From the way we consume media, music and more, it’s clear the world is a completely different place than it was 25 years ago. E-commerce is no exception. Whether it’s socks, stocks, software, etc., chances are we can get it online. In 2019, global e-commerce sales amounted to $3.53 trillion, and are projected to grow to $6.54 trillion in 2022, according to Statista. E-commerce, the 800-pound gorilla of the retail world, is here to stay, and brands that want to grow won’t rest on their receipts. Continued success in the e-commerce world depends on superior customer experience, meeting customers where they are, and going global for growth.
What many don’t know is e-commerce dates back more than half a century. It was introduced more than 50 years ago when the first major e-commerce company, CompuServe, was founded in 1969. The idea of buying things online was still somewhat of an anomaly until 1995, when a company called “eBay” burst onto the scene, and Jeff Bezos shipped Amazon.com’s first book order, unleashing a flood of online shopping.
Still, e-commerce remained fairly limited until the early 2000s. Customization and localization weren’t an option, and only mega brands had the resources to build an e-commerce presence. Fast-forward to 2020, and all that has changed. API-based microservices mean nearly any business can have an online presence with the types of customization that have become a standard of doing business in the digital world.
E-Commerce on a Global Scale
In the same way that e-commerce has changed the way consumers shop, it has also changed where they shop. E-commerce has virtually dissolved borders, enabling a consumer from one corner of the world to purchase goods and services from a seller thousands of miles away with just a few clicks on a screen or taps on a smartphone. Global selling is where brands are seeing huge gains in growth.
Digital commerce transactions will grow globally at more than 20 percent through 2022, according to the Global Unified Commerce Forecast. However, going global comes with risk. Successfully expanding into new countries involves more than simply taking what works at home and applying it to another market abroad. It requires navigating a complex ecosystem of vendor contracts, fulfillment, establishing local banking relationships, understanding preferred payment methods, compliance with local laws and regulations, taxes, fraud, and more. Getting it right can take years of work, and a huge investment without the right partners.
Brands need a good infrastructure so consumers will have a local experience regardless of where the seller is based. The key to that is establishing relationships with local banks to avoid cross-border transactions. Some businesses might look internally to build those relationships, but it’s a costly undertaking — both in time and money. There’s a greater likelihood of success partnering with a payment service provider that has the infrastructure and regional insight to manage payment processes properly in the countries in which merchants wish to do business.
The Future is Mobile
As e-commerce continues to evolve, two of the most important trends for online retailers are mobile commerce and personalization. Many consumers believe the experience a company provides is as important as its products and services. Consumers are feeling more empowered with seemingly endless options for online shopping, so creating an experience that prioritizes convenience, trust, familiarity and efficiency is key to building customer loyalty. What’s more, nearly three-quarters of internet users, equivalent to nearly 3.7 billion people, will access the web solely via their smartphones by 2025. Mobile commerce, or m-commerce, is expected to represent a vast majority of people who prefer experiencing the full spectrum of the buyer’s journey through smaller screens.
Implementing a customer-centric approach means being where customers are, and likely it’s on their mobile devices. The importance of maintaining a positive customer experience isn’t exactly a new idea, but it is something that will continue to push the limits of merchants everywhere.
It’s not easy to predict where e-commerce will go next. We do know that for brands, the innovation imperative boils down to two things: giving customers what they want, where they want. Successful brands will keep that in mind as they work to keep up with the rapid pace of changing consumer technology, using that technology to create new efficiencies in core business processes.
Eric Christensen is vice president of payments, fraud and financial services at Digital River, an API-based payments and risk, order management, and commerce services provider for leading enterprise brands.