Divante’s Ecommerce Trends Report for 2021

If you have not seen it yet, Divante has published their “ecommerce trends report” for 2021, which I always find a good read. I am not going to go through the whole report here, but thought I would share my point of view on a few points that caught my eye.

The full report can be found here: https://divante.com/ecommerce-trends

Social Commerce and Marketplaces

An area of increasing importance is social commerce and marketplaces. I group them here as they are both sales channels.

Social commerce I believe will continue to evolve towards closing sales (today they are more used to advertise the existence of products). Expect to get greater expectations around social platform purchases with in-store returns (that is, accept a payment via one channel, with a return on another).

The importance of marketplaces is an interesting one. Marketplaces are definitely seeing boom times as smaller merchants are trying to get online for the first time. And it makes sense. I personally believe that growing merchants will evolve so they do not remain tied to a single marketplace. They will look to ecommerce solutions as a way to manage their business to go beyond a single marketplace. Yes, they will want their own storefront, but it will only be one aspect of their business.

AI and Big Data

Another trend is the increasing importance of AI and Big Data. The need to compete efficiently is only going to increase and the available technology is getting better. But how important is AI really for a typical merchant? 

I remember before doing an introductory course on AI how wonderful and mysterious AI (and machine learning in particular) seemed. After doing the introductory course, my feeling had changed to “is that all it is?” Sure, it can be effective, but it is not magic.

If you understand how machine learning works, you might laugh a little at my following example, but I do find it a useful way to think about machine learning. Imagine you have a physical store and you hire a new sales associate. Initially when a shopper comes in and asks for advice on products, your associate won’t know very much. They will guess which products customers might like – the suggestions might be somewhat random. Over time, the sales associate learns which products sell better. A good sales associate will go further, understanding which products different age groups prefer. Maybe they will look at the style of clothes the shopper is wearing and make other judgement calls on which products may interest them the most. The longer the sales associate works in the store, the longer they make suggestions and listen to how customers respond, the better they get.

Machine learning is actually quite similar. You have to give a machine learning algorithm enough sales to learn from or else the recommendations can be a bit random. This means if you have a small site with not much traffic, you may not get as much benefit as you don’t have as many previous sales to train your system on. Larger sites with more traffic are more likely to benefit from machine learning as there are more data points to learn from.

Security and Payments

Security and payments is also high on the list, and deserve to be there. Data privacy is important, it is important to treat data about your customers with sensitivity. Data breaches can be very public and very embarrassing.

Mobile payments is one of those areas that still has room to improve. It is too hard to create a quick little app that is secure and trustworthy. This is where platforms can help – they have the security staff to give security the attention it deserves. But I think easy payments is an important aspect of an agile business. Complexity comes in however when you have different purchase points (social platforms, your own sites, marketplaces, physical stores, …) and multiple return points.

VR and AR

In terms of less importance, VR was on the list. I find this one interesting, if only because I never thought it that important in the first place! I think the problem with VR is the friction to its usage. Getting out a headset is just too much of a pain for a shopping trip.

AR on the other hand I think will continue to grow in importance, more so as AR devices become mass market. Experiencing an AR experience via your phone is a useful stop-gap until then (e.g. viewing 3D product images, placing furniture virtually in your room to see how it looks, etc.), but if Apple AR glasses do hit the market with a reasonable price point, I expect AR to explode in importance.

Mobile Apps and PWA

One I found particularly interesting is the continued decline of mobile apps. This makes complete sense to me. Only the most popular apps tend to stay installed on a phone or used on a regular basis. Related is the rising importance of PWA, which I may explain as the ability to create app-quality experiences on the open web.

You may ask the importance of the web if the movement is towards social and marketplaces. My personal point of view is you still need your own online presence that you control, a useful place to send users to in order to transact. The web may become “less important”, but that does not mean “not important”. I think there will be more pressure for a range of experiences and touchpoints, which may reduce the available budget to spend on the web storefront.

Interactional Commerce

Interactional commerce (which includes voice commerce) I think is an interesting one for the “in” column. I am less convinced. I do not think it is mature enough yet to make a big impact in 2021. People want a voice experience to be as flexible as a conversation with a real sales associate. People can change context quite quickly in a real conversation – machines still struggle here. The current state of the art allows simple guided conversations, not full on conversations.

What is missing?

  • I think QR Codes are going to increase in importance, particularly in the US. With QR readers built into Android and iOS camera apps by default, leveraging QR codes to get from the physical world to the online world is going to be more important.
  • Super apps were effectively included in the discussion on social apps, but in some parts of the world I think super apps provide a rapid development platform that incorporate easy payments. There is a reason for the rapid growth in some parts of asia.
  • Video live streaming I think has the potential to increase in importance in the western world. It may never hit the heights of some parts of asia, but as people are used to shopping more online, the challenge of understanding products has not got simpler. Why not have a sales associate available to answer online questions and show products over a camera?
  • Web Stories could become a useful technology for more immersive product experiences, supporting more visually engaging experiences for browse experiences.

Conclusions

The report is definitely a worthwhile, thought-provoking read. There are a few points I have a different point of view on, but overall I think a good report that makes many good points.

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