Series: The A-Z of E-Commerce (Part 1)
E-commerce has revolutionized the way consumers shop. Over the past 20 years, the shopping experience has become increasingly digitized (BigCommerce), with Asian countries such as China displaying the diversification of e-commerce on a much more significant scale than their Western counterparts. Global crises have accelerated the evolution of commerce and made apparent its endless possibilities. The 2003 SARS epidemic in China was credited for prompting the massive growth in China’s e-commerce industry and propelling Alibaba to become the giant that it is today because of self-isolating citizens’ increased dependence on online platforms. Similarly, the COVID-19 pandemic has seen 77% of consumers change the way they shop, indicative of a shift toward online ordering and delivery (EY). Reminiscent of China, e-commerce is poised to grow globally with limitless opportunities following the COVID-19 pandemic.
A single umbrella term is no longer sufficient to encompass the extent to which e-commerce has expanded and will continue to expand. This five-part written series will explore the A-Zs of lucrative e-commerce opportunities.
Auto commerce, referring to the online buying and selling of vehicles, has recently moved toward focusing on digital customer experiences following changes in customer expectations and buying behavior. A survey found that 61% of respondents looking to purchase vehicles were open to buying online in 2020, representing a 32% increase since 2019 (IBM). Currently, auto commerce exists in the nascent form of vehicle reselling platforms such as Autotrader and Tesla’s direct-to-consumer sales model, where shoppers can purchase vehicles online. Tesla is currently the only car manufacturer that exclusively sells its vehicles online (CNBC). However, the future of auto commerce will also see brands increasingly shifting online. Brands will need to focus on integrating online and offline customer touchpoints and, following the lead of Chinese automobile companies, incorporating livestreaming to offer online shoppers a more interactive at-home experience (GMA). A second relevant a-commerce application is art commerce, which has seen a recent boom since introducing non-fungible tokens (NFTs). NFTs have brought about a new digital frontier for the art industry where purchases are conducted exclusively online, virtual galleries have become increasingly popular, and the roles of artists, collectors, and investors have shifted toward a digital format (Jing Culture & Commerce). This dramatic shift in art commerce has eliminated the need for art dealers as middlemen and made the industry more accessible for all consumers, who are now able to purchase NFTs on a desktop or mobile app using digital payment, participate in virtual auctions, and store the art in a digital wallet (Motley Fool). In the future, NFT galleries will pick up traction using artificial reality (AR) technology for display in an offline format.
Beverage commerce, referring to the online sale of alcoholic beverages, saw a significant rise in sales from $3 billion in 2019 to $5.6 billion in 2020 due to the COVID-19 pandemic. However, uptake of beverage e-commerce is still considered slow due to varying laws and regulations that have deterred companies such as Amazon from entering the industry (Crunchbase). The focus for beverage commerce players such as Vivino, DRINKS, and Drizly has been to improve consumers’ digital experiences and incorporate faster and better delivery logistics. However, the future of beverage commerce will go beyond simply offering a platform for online purchasing and will follow the lead of Spirits Network, a subscription-based, shoppable platform with a collection of programming, documentaries, tutorials, and livestream content to offer information and advice to shoppers and allow them to purchase alcoholic beverages from the platform for rapid delivery (Beverage Dynamics).
Clothing commerce is a deeply entrenched aspect of digital e-commerce and has seen substantial growth during the COVID-19 pandemic. The inability to shop in physical stores prompted a fashion industry makeover, where clothing brands needed to establish or strengthen digital channels for online purchasing. The future of clothing commerce will focus increasingly on a wide array of technological advancements to allow for contactless clothing commerce, such as machine learning, robotics, sensors, big data analytics, augmented reality, and computer-aided holography, and will feature a combined offline and online business model (HBR). Offline, physical stores will move toward a touchless experience. Fitting-room mirrors will display the selected clothing items digitally, and payment will be completed via mobile app more seamlessly using either radio-frequency-identification (RFID) tags, which allow for rapid scanning, or following the Amazon Go model with completely touchless shopping using automatic app payment (HBR). Online, the future of c-commerce will continue to try and capture the sensory experience of in-person shopping. This will primarily manifest through the use of AR technology, a feature which Gucci has already incorporated into its mobile app, where shoppers are able to virtually try on products such as shoes, cosmetics, sunglasses, and furnishings and are provided with 3D visualizations of how they will appear (Marketing Dive).
To continue exploring the A-Zs of e-commerce, refer to the subsequent part 2, part 3, part 4, and part 5 of this article series.