E-commerce has been evolving at such a rapid pace, it may be challenging to know what’s next. How will consumers’ preferences change one year from now, or even five years from now? The ability to predict the future of e-commerce becomes even more difficult for cross-border merchants. It’s hard enough to prepare for the future in one market that brands are already familiar with – what about multiple countries where each consumer market has varying needs and expectations?
Based on Flow’s research and interaction with cross border merchants and consumers, here are three trends we’re following closely.
1. E-commerce categories will become even more specialized.
We’re seeing a rise in Digitally Native Vertical Brands (DNVBs). These brands are showing a strong performance in niche markets within categories like ready-to-wear, athleisure, performance wear, and others. One example is the increasingly popular sustainable clothing market. DNVBs are already proving to be popular among Millennials, and we expect this trend to continue with Generation Z as they become old enough to make more buying decisions.
2. Social commerce will increase globally.
Emerging e-commerce powerhouses such as Latin America are being fueled by two key trends: a large population of young consumers and the rise of social media in these markets. We’re seeing a “perfect storm” of celebrity influencers combined with the reach of social media driving demand for instant and fast fashion. Product reviews via social media are driving a more efficient market and international consumers are becoming savvier, demanding higher quality products and value. To compete, e-commerce merchants entering new global markets will need a social selling strategy that takes into consideration each market’s local preferences.
3. Cross border e-commerce platforms will create more global competitors.
As more direct-to-consumer e-commerce retailers reach their domestic market potential, the need to expand into global markets will become even more vital to their continued growth. E-commerce platforms are transforming the way domestic brands reach new global markets. These platforms allow international consumers to purchase products easily and cheaply, as if they are shopping from an in-country online store. Today’s cross border e-commerce platforms provide the turn-key solution needed to manage all aspects of the international customer experience, such as local currency pricing, order fulfillment and shipping, international payment options, well-defined taxes and duties, catalog targeting by market, localized checkout, and simple returns.
Regardless of what the next version of e-commerce retail looks like, brands and retailers must continue to focus on creating memorable, authentic customer experiences. Building strong relationships with customers, no matter where they live and how they like to shop, remains a top priority and primary goal. Brands that don’t prioritize this risk becoming commoditized on marketplaces where price is a key factor and merchants have little to no control over the look and feel of their brand, their packaging, and their product listings. Now and in the future, brands and retailers will need to invest heavily into connecting directly with customers to build trust and loyalty and drive repeat purchases.