Keeping up with the state of e-commerce is difficult. The online shopping space for both B2B and B2C organizations is in a constant state of flux.
Just prior to 2020, most B2C retailers and brands had fully embraced digital commerce. The most successful companies stayed ahead of e-commerce trends and were able to quickly pivot to meet the needs of buyers. B2B companies were slower to embrace e-commerce, but they were inching their way toward digital selling.
Then, the COVID-19 pandemic flipped all of e-commerce on its head. B2B companies were hit especially hard, as so many had not yet digitally transformed or were in the early stages of their digital transformation. They had to scramble to get the most basic digital capabilities in place.
As the dust now settles on the pandemic, e-commerce growth has eased from its heights in 2020 and 2021. However, many of the business and shopping practices born out of COVID are here to stay. Consumers are still shopping online in record numbers, and sales across B2C and B2B e-commerce sites continue on an upward trajectory.
Insider Intelligence predicts that by the end of this year, online retail sales will increase by 8.9 percent compared to a 6.5 percent growth in 2022. It also predicts that sales growth rate will continue — reaching 9.4 percent in 2024.
In the U.S., e-commerce sales are expected to top $1 trillion in 2024, according to Statista, and make up about 70 percent of retail e-commerce sales. That number is expected to exceed $1.4 trillion by 2027.
As we head toward another year of e-commerce growth, both B2B and B2C companies must walk the fine line of predicting what impactful trends are coming in 2024 and knowing what resources they must invest in to stay relevant and competitive.
Looking Back on 2023
Many experts predicted that 2023 would be a year of big changes in e-commerce — thanks in part to new technologies and constantly changing consumer behaviors. And they weren’t wrong.
Let’s take a look at a few of the 2023 e-commerce predictions and where we stand now:
- AI: Some experts predicted that with greater access to open-source artificial intelligence tools, such as ChatGPT, more organizations would lean on these resources to create marketing content, as well and push their personalization efforts forward. More companies leveraged AI for content creation, but the jury’s out on whether it made a dent with regard to efficacy. As tech around chatbots and virtual assistance advances and becomes more accessible to more retailers, more have taken advantage of those options — potentially giving them a competitive advantage over those that have yet to embrace this technology.
- Pricing Pressure: Price comparison has never been easier in an open e-commerce world. Experts believed that companies would feel increased pressure in 2023 as a result of consumers easily checking prices from seller to seller online. However, rising inflation has played a critical role in how companies price their products. Prices continued to rise throughout 2023, however, they began to stabilize compared to the start of massive inflation in 2021. With inflation top-of-mind for consumers, who now have to stretch their dollar further, price comparing and lower-priced options are playing a bigger role in purchase decisions.
- Personalization: Personalizing the shopping experience isn't new, but in the past couple of years it has gained greater traction. Customers are now conditioned to expect a personalized experience, and new features make it even easier for companies of all sizes to provide these bespoke experiences to shoppers. Personalization has been a high priority among savvy online retailers for several years, as consumers demand that connection with the brands they shop with — and 2023 was no different. Technology that enables personalization continues to improve, allowing more companies to better personalize customers’ shopping experiences, giving them a competitive advantage over those that don’t.
- Sustainable Shopping: As consumers become more environmentally conscious, so does their appetite for supporting companies with sustainable and ethical policies in place. Some experts believed 2023 would be the year many retailers would prioritize environmental awareness as part of their business practice. With inflation persisting and prices high, consumers are de-prioritizing sustainable shopping as they’re constrained by tighter budgets. The effort of prioritizing sustainable practices proves to be a great hurdle for many businesses. The 2023 State of Fashion report from McKinsey and The Business of Fashion found that 79 percent of fashion executives consider the lack of sustainability standards to be the greatest hurdle to improving how consumers view their sustainability efforts.
Companies can now look back on 2023 and assess their preparedness for what the year had in store. Did you see the emerging trends in time and respond with the appropriate resources to stay ahead of the competition? If not, perhaps it was a lesson learned for what’s to come next year.
What’s in Store for 2024
In this e-commerce world of constant evolution, it’s impossible to list all the upcoming trends companies should keep on their radars, but there are a few that almost all the experts agree deserve a spot on your list of 2024 priorities.
1. Personalization will be a must.
Just like last year and the year before it, personalizing the shopping experience is critical to compete in e-commerce. Consider this: personalized emails have an open rate nearly 30 percent higher than those that aren’t personalized, according to a recent study by Epsilon. Customers want to feel connected to the brands they shop with, and the onus lies on companies to offer them personalized product recommendations, customized marketing campaigns, and tailored customer service. If they don’t, those customers will find a company that will.
2. AI is here to stay.
AI had a big year in 2023. As more companies embrace AI and machine learning for chatbots, virtual assistants and content creation, they’re better able to provide the personalization today’s online shoppers demand. The next step we expect to see in 2024 is a greater ability for AI to successfully analyze the behavior of online buyers to extract intricate information about them. This, for example, could lead to chatbots directly interacting with brand customers and creating personalized coupons and buying experiences made specifically for them.
3. Mobile commerce will continue to spike.
Mobile commerce has seen an uptick every year for at least the past decade. And it still isn’t slowing down. eMarketer predicted in its recent study that mobile commerce will make up about 70 percent of all online sales in 2024. To stay competitive, it’s now more important than ever that B2C and B2B companies alike ensure their sites are responsive and easy to use on small screens.
4. Marketplaces will begin to dominate the online shopping space.
There’s no question today’s customers want fast and easy shopping options — and the convenience of the one-stop-shopping model marketplaces offer fits that bill. According to eMarketer, U.S. e-commerce marketplace sales accounted for about 34 percent of all online sales in 2022. And a Bearingpoint study found that marketplaces now account for 62 percent of e-commerce sales worldwide, compared with just 10 percent in 2008. This trend will continue considering that Gen Z buyers are far more tech-savvy than other generations, and are likely to use apps to find discounts and promotional deals on various marketplaces. Companies that want to elevate their customer experience and expand the breadth of their offerings will be prioritizing marketplace strategies in 2024.
Staying a Step Ahead
In today’s economy, resources are strapped and companies are challenged to do more with less. As a result, it’s imperative that they invest their tight budgets in technology and resources that will give them greater adaptability and better investment value.
Modern consumers are savvier in the use of marketplaces, browser extensions, and multiple tech tools to find the best deals and coupons to save money on their purchases. The same applications aimed at finding the best promotional deals are also used to further promote it among other buyers via affiliate programs. This opens up more marketing opportunities for companies that have an adaptable promotion management solution in place allowing for dynamic promo code generation.
A digital commerce solution can help companies stay ahead of these trends and better compete with an e-commerce platform that offers businesses all the tools they need to run their businesses most efficiently while meeting or even exceeding customer expectations. With the ability to dynamically respond to consumer trends with the help of AI, and the added potential of marketplaces and consumer apps, businesses should more closely look at options for integrating their online sales with an existing ERP — taking advantage of a number of data-rich features, such as payments, inventory management, and shipping and distribution.
Most importantly, for companies competing in this new, more competitive world of e-commerce, a robust B2B e-commerce platform allows businesses to continually improve the customer experience and increase customer engagement.
Michał Lewanowicz is a senior product marketing manager at QAD, a provider of flexible, cloud-based enterprise resource software and services for global manufacturers.
Michal is an accomplished senior product marketing manager at QAD, boasting a decade of extensive experience in the dynamic realm of Technology marketing. His expertise lies in adeptly transforming intricate technological concepts into impactful communication strategies. With a keen eye for emerging trends, Michal consistently navigates the forefront of the latest technological developments, focusing particularly on Digital Commerce, AI, and Process intelligence.
Beyond the professional sphere, Michal dedicates his spare time to leisurely cycling amidst the picturesque mountain ranges of Sudetes, often accompanied by his two sons.