LONDON--(BUSINESS WIRE)--Technavio’s latest report on the global e-commerce market provides an analysis on the most important trends expected to impact the market outlook from 2016-2020. Technavio defines an emerging trend as a factor that has the potential to significantly impact the market and contribute to its growth or decline.
Ujjwal Doshi, a lead analyst from Technavio, specializing in research on media and entertainment services sector, says, “The global e-commerce market is expected to exceed USD 3.6 trillion by 2020, growing at a CAGR of more than 19% during the forecast period. Shoppers were initially attracted to e-commerce sites due to the cost advantage however, over a period of time they have matured in their search for quality products and shopping experience. During the forecast period, the provision of effective customer service, authentic products, and enhanced shopping experiences will be the key to ensuring e-commerce consumer loyalty.”
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The top four emerging trends driving the global e-commerce market according to Technavio media and entertainment research analysts are:
- Vendors switching from website to mobile-only apps
- Increasing adoption of RTB
- Brick-and-mortar stores shifting to e-commerce
- Cross-device marketing
Vendors switching from website to mobile-only apps
Online shopping transactions are higher in mobile apps than websites due to the increasing number of smart device users, as a result of which vendors are trying to switch from websites to app-only services. However, switching to app-only services can turn into a failure for vendors as many developing countries like Africa, India, and South Korea still face problems with internet connectivity, which restricts the customers from making an online purchase.
However, Myntra, an Indian e-commerce site, which is a subsidiary of Flipkart switched to app-only services in September 2015. Although the company’s sales were affected for the first six months, sales started picking up subsequently. Thus, to switch to app-only services, e-commerce vendors need to come up with a lighter version of the app that works even with slow internet connectivity as is the case with the Google, Facebook, and LinkedIn apps.
Increasing adoption of RTB
Real-time bidding (RTB) is an online ad serving process. It involves an online bidding process that allows marketers, advertising agencies, and media buying agencies to trade display advertising inventory in real time. The vendors provide a suitable platform to carry out this auction process. When a visitor visits a publisher’s website, it sends out a request to the vendor. The vendor sets a floor price for that visitor, and various advertisers are allowed to check the visitor and the floor price and bid accordingly. Then the winning bid is selected by the vendor, and the ad of the winning bidder is displayed for the visitor.
E-commerce is one of the markets, which is expected to use RTB extensively to target customers during the forecast period. With an increasing number of vendors entering the market, the implementation of RTB could be a differentiating factor among the vendors.
Brick-and-mortar stores shifting to e-commerce
With the rapid decline of sales in brick-and-mortar retail stores, e-commerce is expected to be an alternative to survive in the market, especially in developed countries. The major factor for fewer sales in offline retail stores is the shopper’s increasing showrooming behavior, where the consumers visit the store to check the look and feel of the product, and buy it later online at a cheaper and discounted price.
Webrooming is just the opposite of showrooming and is a major trend in the e-commerce market where the customers read the reviews of the product and buy it in the store. “Retail vendors are also increasing their online presence mainly because consumers prefer not to make the purchase if the product has a minimal online presence,” says Ujjwal.
Cross-device platforms are considered to be the future of e-commerce sales as more customers are adopting smartphones and tablets to purchase online. In 2015, 18% of global sales made through multiple devices were cross-device sales, i.e., 18% of the customers have seen an ad on a device and made the purchase of the same product on a different device within 30 days of viewing the ad. As of 2015, vendors have realized the potential of cross-device marketing, and nearly 56% of vendors are implementing this marketing technique to attract more buyers.
The process of calculating the impact of the cross-device platform can be complex. However, the complexities are expected to decline during the forecast period, with the availability of precise exact-match methods, which will drive significant growth in sales for vendors.
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