WWW: What Why When

E-commerce is the new wave, slowly turning into a tsunami. The internet is such a powerful medium for transmitting information, that any other medium renders itself inefficient when compared to the worldwide web. Lets look at how and why e-commerce is being affected and what the future has in store.

In order to ascertain factors affecting e-commerce, one must take a look at the various trends that directly impact it. The first and most ubiquitous trend to look at is of course social media. According to a study conduced by Forbes earlier this year, 55% of people buy products after finding out about them on social media, Influencers on social media being used as a business channel have proven to be extremely profitable. Companies need to start investing more time and money into their specific social media branding approaches that represent them and their unique target audience.

Instead of just being one relay point out of many, social media selling has quickly and easily become one of the most important factors in a purchasing decision. With more and more people posting pictures and talking about their purchases, user-generated content is a big theme among brands due to the ability to help scale original content and drive greater engagement.

Also in the Forbes study we see that Facebook and Instagram lead the way with product discovery rates, coming in at 78% and 59% respectively with regards to number of users finding out about new products, with 11% of those people buying immediately and 44% buying it later, which are very impressive conversion rates.

What Why When

Another trend/factor e-commerce sites are dealing with is the crowded and cut throat advertisement market that drives costs up with respect to obtaining clicks. Over the past decade, digital marketers have become increasingly quantitative in their approach. The E-commerce brands with the most resources are becoming more and more precise, innovative , and creative with advertisement optimisation. Many brands are constantly testing different criteria of photo and video content, user generated content, and analyse ROI accordingly. To curb rising digital ad costs, some brands are opening storefronts and holding events as a branding opportunity, or emphasising experiences and community building, which they then also post on social media to double the engagement.

We have to also consider that the big e-commerce brands that rely on Direct-to-consumer engagement have become market leaders through social media and exponentially scaling word of mouth. There are now a staggering 19 companies with $100M+ in annual revenue built on a direct- to-consumer model. ( Study by Forbes 2018 ) These are the first companies of a new generation that started with online only sales and built huge communities of fans online, proving beyond doubt that E-commerce is undoubtedly the way forward. While direct to consumer brands have been a common theme in previous years, this year shows the scale and sheer success that some of these companies can achieve . This shows that social media doesn’t only work for e-commerce, it also works at scale.

One of the most important factors driving e-commerce engagement is definitely video and media content. It provides unique ways for consumers to discover new products and engage with brand advocates. With people spending copious amounts of time on Instagram/Facebook, the better your content is, the stronger following a brand can accumulate. Video content heavily influences online purchases, in most markets. The video market in the US is trending up as an innovative way for consumers to find about new products as well as engage with other user’s experiences. With social platforms like YouTube play a massive part, with a community engagement angle, brands will increasingly see users generate content on their own and thus providing the brand with free and thorough advertising.

With more and more people gaining access to internet connections in Tier-2, Tier-3 cities and beyond, the number of estimated internet and smartphone users in India is estimated to hit 460 million and 337 million users respectively by the end of this year, and the estimated growth rate at 15.6% annually is the highest in the world. Owing to that, E-commerce sales and mobile shopping app usage is starting to accelerate heavily. ( Statistics taken from www.financialexpress.com )

E-commerce sales have continued to rise seeing a 16% year-on-year growth, while actual brick and mortar retail has only seen a measly 3% year-on-year growth. Online shopping app sessions via mobile grew 54% annually ( 9 times the average growth rate of app categories in general ) which represented the fastest growing mobile app category overall, even leaving behind music, entertainment, and utility apps. This data highlights the sheer reach that mobile shopping has.

Another key factor that might get overlooked is a qualitative one instead of quantitative.

Trust is a key factor in business to consumer e-Commerce. It gives consumers faith to buy products from the site even if an e-trader is unknown. Furthermore It encourages more and more usage of e-Commerce technologies, also makes the e-transaction process easier, ( especially in India where people are vary of using credit / debit cards and lean heavily towards Cash-on- Delivery). This also increases the overall acceptance level and consistent adoption of e- Commerce, leads to ardent consumer commitment, boosts customer satisfaction, introduces the concept of loyalty and organic recommendations, sustains long-term relationships with customers and help them acquiring of a competitive benefit via loyalty programmes. Future purchases can be motivated and higher prices tolerated.

Similar to trust, server security is a crucial factor driving e-commerce. A lackadaisical approach in this sector might undo all other hard work. Speaking from a consumer point of view, issues of internet security are a big hinderance to the general growth of e-Commerce. The perceptions of risk regarding Internet security has been recognised as a problem for both experienced and inexperienced users since hackers are one step ahead of them. So the onus lies on the company to upgrade their software to ensure a smooth and safe experience.

These are some of the more prevalent factors influencing changes in the e-commerce industry, one which only seems like it can go forward with increasing advancements in technology.