Discover How These Emerging Trends Will Reshape Online Shopping and Consumer Engagement in the Year Ahead.
As we march toward 2024, the eCommerce landscape is experiencing a rapid and transformative evolution. As the first full year after the pandemic, 2023 was unique with observable changes in customer behaviour. Then, early in the year, Chat GPT emerged out of the blue, familiarising everyone with the benefits of Artificial intelligence and opening new opportunities and challenges.
So, what should the eCommerce industry expect in 2024?
While we don’t have a crystal ball, we have done a deep dive and identified eleven (11) trends that will likely impact the strategy and operations of online businesses.
So, join us as we explore what’s new, what’s next, and how to prepare for the year ahead in this dynamic digital marketplace. Whether you’re an established or a new growing business, the resource will equip you with the knowledge to navigate 2024 successfully.
1. Generative AI
Generative AI will transcend traditional online transactions to offer personalized and efficient shopping experiences.
What is Generative AI?
Generative AI is an advanced algorithm that generates text, images, and interactive experiences. In the eCommerce context, it’s like a creative assistant, generating product descriptions, optimizing search engine results, and enhancing customer engagement through personalized experiences.
Benefits:
- Personalized Experiences: Drawing parallels with Netflix’s ‘taste communities,’ Generative AI tailors product recommendations and content, mirroring individual customer preferences.
- Operational Efficiency: Automating tasks like content creation leads to more streamlined operations, allowing businesses to focus on growth.
Implementation Strategies:
Businesses can begin by incorporating AI in specific areas of the customer journey. For example, Shopify offers AI tools, like Shopify Magic, for content creation and editing. Chatfuel lets businesses easily set up an AI chatbot to engage customers on their brand website and the three major platforms owned by Meta: Facebook, Instagram, and WhatsApp. Notion is an all-round project management tool with powerful AI tools across its functionality.
2. Augmented Reality
Once a niche gaming technology or a luxury feature, AR now plays a pivotal role in eCommerce, offering the “try before you buy” experience. AR bridges the virtual and physical realms, enhancing customer confidence, engaging shoppers, and turning online shopping into an immersive visual journey.
Benefits
A recent study by HBR indicates that customers who used AR while visiting an e-commerce site spent around 20% more time browsing and viewed 1.28 times more products than customers who didn’t use AR. Importantly, their likelihood of purchasing their session increased by almost 20%.
- Enhancing Consumer Confidence:
- AR tools like IKEA’s app enable customers to visualize products in their own space, reducing uncertainty and increasing satisfaction. This shift is significant, as AR-influenced shopping experiences reduce guesswork and improve purchase decisions.
- Creating Immersive Experiences: Brands like Warby Parker leverage AR for virtual try-ons, transforming shopping into an engaging, personalized process. This approach leads to more confident purchases and higher customer contentment.
Implementation Strategies:
Adding an AR experience to your online store shouldn’t be because it is a new trend; first, ensure it is the right medium for the project and that your customers would find it useful.
First, you’d create a 3D model of the product and upload it to your product page to be viewed and interacted with by customers. Most Shopify themes support 3D models out-of-the-box. Kaiteng Lo, Full Stack developer at Tidal, recommends integrating Google Lense or Araya.
3. Predictive Analytics for Inventory Management
This decade has been mired in supply chain disruptions. While supply chain issues are waning, 68% of retailers still struggle with stock management, leading to frequent shortages and driving 46% of customers away to competitors who can meet their immediate needs.
What is the Predictive Analytics?
Predictive analytics is not mere guesswork; it’s a sophisticated approach using machine learning to forecast future demand accurately. Consider platforms like IBM Watson and Google Cloud’s AI and Machine Learning solutions. These systems analyze a wide range of data, from market trends and social media sentiment to historical
Benefits:
- Anticipating Customer Needs: Predictive analytics allows businesses to understand and anticipate customer demands, ensuring products are available precisely when needed.
- Streamlining Stock Levels: This technology is crucial in maintaining optimal stock levels, thus reducing the risk of stockouts, lost sales, and overstocking.
Implementation Strategies:
eCommerce businesses can integrate predictive analytics tools into their operations by analyzing past sales trends and market data. Platforms like Shopify offer integrations with analytics tools and inventory management tools like Katana and Singuli.
4. Same-Day Delivery
Same-day delivery is no longer a luxury but a necessity. Consumers accustomed to services like Uber Eats and DoorDash now expect equally swift delivery from their online shopping experiences. Almost half of shoppers say that same-day delivery makes them more likely to shop online. According to Statista, the same-day delivery market is projected to be worth $14.9 billion in 2024.
Benefits:
- Meeting Consumer Expectations: Shoppers want immediate gratification. Same-day delivery meets the modern shopper’s demand for speed, greatly enhancing customer satisfaction.
- Sustainable Practices: By collaborating with eco-friendly logistics like Sendle and Shippo, companies balance speed with sustainability, offering carbon-neutral delivery options.
Implementation Strategies:
Incorporating logistics solutions that offer same-day delivery is crucial for businesses to stay competitive. Emphasizing customer-centric and sustainable delivery options will likely foster consumer trust and enrich the shopping experience. Services like Deliverr and ShipBob offer rapid integration and fulfillment solutions that align with the expectations for same-day delivery. They don’t just boost efficiency; they significantly enhance customer satisfaction.
5. Returns with Automation
eCommerce faces the inescapable reality of returns, with 20-30% of online purchases re-entering the return loop. This challenge can, however, be transformed into an opportunity thanks to automated Returns Management Systems (RMS). These systems determine the most efficient course for returned items, whether restocking, refurbishing, or eco-friendly recycling. They can even convert returns into exchanges so that the cost of returns can be minimized.
Platforms like Loop Returns and Narvar are at the forefront of this revolution. They integrate AI to automate decision-making, thereby streamlining the entire returns process. Their offerings include instant credit issuance and environmentally responsible disposal options, redefining the returns experience for businesses.
Benefits:
- Efficient Return Processing: Automated RMS allows for quick and efficient handling of returns, reducing operational burdens.
- Retain more revenue:
- Returns are a valuable customer interaction and can be converted to an exchange or a repeat purchase.
- Enhanced Customer Satisfaction: These systems increase customer loyalty and improve shopping experience by simplifying returns.
Implementation Strategies:
eCommerce businesses can adopt RMS solutions like Loop Returns or Narvar to modernize their returns process. The key is choosing a system that integrates seamlessly with existing operations and aligns with the company’s customer service ethos.
6. Sustainability revolution
A staggering 78% of US consumers now prioritize sustainable living, directly influencing their shopping choices. 60% are willing to pay more for sustainable packaging, 42% regularly opt for eco-friendly products, and 28% consider the environmental impact of their online purchases. This shift is more than a trend; it’s a movement. Sustainability is emerging as a key differentiator in the crowded eCommerce.
What is sustainability in eCommerce?
Strategies such as paper-free operations and recyclable packaging, the use of electric vehicles and localized fulfillment in reducing the carbon footprint of deliveries are good examples of the move towards sustainability in eCommerce.
Benefits:
- Alignment with Consumer Values: Embracing sustainability aligns businesses with the values of their customers, enhancing brand loyalty.
- Operational Innovation: Sustainable practices lead to innovations in logistics and packaging, improving operational efficiency and reducing environmental impact.
Implementation Strategies:
eCommerce businesses can start by auditing their supply chain for sustainability, partnering with eco-friendly logistics services, and exploring recyclable or biodegradable packaging materials.
7. First-Party Data
There is a significant shift in how brands collect and utilize data. Online shoppers are becoming more conscious of their digital footprints, and major browsers like Google and Bing are phasing out third-party cookies. This has increased the focus on first-party data.
What is First-Party Data?
First-party data is the data you may have about your customer from the interaction. This first-party data is further augmented with data that customers willingly share through interactions like quizzes, forms, questionnaires, and loyalty programs. This data is a treasure trove for personalized marketing, allowing brands to tailor their messaging and offers with unprecedented precision.
Jones Road Beauty’s “Find Your Shade” quiz is a prime example. More than just an engagement tool, it’s a strategic method to gather first-party data like skin tone, concerns, and preferences. This data is then used to customize product recommendations, offering a highly personalized shopping experience. Additionally, the collection of email addresses facilitates effective retargeting campaigns.
Benefits:
- Enhanced Personalization: First-party data enables brands to create highly tailored marketing strategies, resulting in a more personalized customer experience.
- Building Customer Trust: This approach fosters deeper, trust-based customer relationships, relying on their direct data.
Implementation Strategies:
eCommerce businesses can integrate interactive elements such as quizzes, contests, loyalty points programs or personalized forms on their platforms. This engages customers and gathers valuable first-party data for targeted marketing efforts. As per Tidal’s technology team, several apps for quizzes and contests exist on the Shopify store. Yotpo and Rise.ai are the leading apps for Loyalty program management.
Today, first-party data isn’t merely a workaround for the demise of third-party cookies; it represents a shift towards a more authentic, customer-centric data collection approach. By leveraging this data, brands can create meaningful interactions, transforming every customer engagement into an opportunity for personalized connection.
8. AI-Powered Personalization
In 2024, the e-commerce landscape will be further defined by personalized shopping experiences, with Artificial Intelligence (AI) being the key driver of this transformation. AI’s ability to tailor experiences fosters deeper connections between brands and customers, increasing loyalty and retention.
Digital marketing leaders highlight the importance of AI-driven Customer Relationship Management (CRM) tools like Salesforce and HubSpot and customer management platforms like Okendo. These platforms analyze customer data, including past purchases, order frequency, and preferences, enabling brands to craft highly customized shopping experiences.
Furthermore, the impact of AI extends beyond the initial purchase. Logistics technology experts point out the critical role of personalized post-purchase communication. Using tools like Klaviyo or Mailchimp, brands can continue engaging with customers through tailored upsells, personalized discounts, and converting one-time buyers into loyal patrons.
Benefits:
- Deepened Customer Engagement: AI-powered personalization allows for more meaningful interactions, enhancing customer engagement and satisfaction.
- Increased Customer Retention: Personalized experiences foster loyalty, encouraging repeat business and long-term customer relationships.
Implementation Strategies:
eCommerce businesses can integrate AI-driven CRM tools to analyze customer data and personalize shopping. Post-purchase communication tools can help maintain a continuous and engaging customer relationship. Rebuy, Bloomreach, and Fast Simon are excellent personalization engines.
9. Direct Messaging for Customer Service
Direct messaging on social platforms such as Instagram and Twitter will redefine customer service in the eCommerce world. As per a Hubspot survey, 65% of consumers use social media messaging apps to contact customer service. The growing preference among consumers for using direct messages (DMs) for inquiries is a significant shift in communication preferences. This trend necessitates that eCommerce brands become proficient in managing interactions across various social channels.
CRM software like HubSpot and messaging platforms are equipped to handle various conversations, ensuring every customer query is addressed promptly and professionally. This approach streamlines communication and enhances the overall customer service experience.
Benefits:
- Improved Customer Engagement: Direct messaging allows for real-time, personalized customer interaction, leading to increased satisfaction and loyalty.
- Efficient Communication Management: CRM tools help organize and respond to customer inquiries efficiently, providing a seamless customer service experience.
Implementation Strategies:
: eCommerce businesses can integrate CRM systems like Zendesk and customer engagement tools like Gorgias, Klaviyo, and SocialSender for meta, which help manage direct messaging across social platforms. Training customer service teams in effective communication and quick response strategies is also crucial.Top of Form
10. Social Commerce ‘The New Marketplace’
Social media has already evolved into a full-fledged marketplace; this trend will only gain more significance in the eCommerce landscape. Social commerce uses social media platforms to promote and sell products or services. Purchasing directly through platforms like Instagram Shops, Facebook Marketplace, and Pinterest’s Buyable Pins has become a reality, widely embraced by many social media users.
Benefits:
- Expanded Market Reach: Social commerce enables businesses to reach a wider audience, leveraging the vast user base of social media platforms.
- Enhanced Shopping Experience: Integrating social media and eCommerce offers a more seamless and engaging shopping experience, appealing to the modern consumer’s desire for convenience and interactivity.
Implementation Strategies:
eCommerce businesses can integrate their online store with social marketplaces. Brands on the Shopify platform can promote and sell their products on Facebook, Instagram, TikTok, Google and YouTube. This strategy involves curating products for social media, leveraging the platform’s tools for marketing and sales, and engaging with customers directly through social media. You can also use Cilego as an iPaaS (Integration Platforms as a Service). By embracing this new marketplace, eCommerce businesses can create more engaging, interactive, and convenient shopping experiences, aligning with the evolving preferences of the modern consumer.
11. MACH Stack Revolution
MACH stack is revolutionizing the technological foundations of eCommerce.
What is the MACH Stack?
It is short for Microservices, API-first, Cloud-native, and Headless. This MACH Stack emphasizes adaptability and operational agility, akin to building with Lego blocks rather than cement. Each piece of the tech stack is designed to be easily integrated, reconfigured, or replaced, facilitating a more flexible and responsive eCommerce environment. Importantly, it enables merchants to select each component of the eCommerce infrastructure for its ability to respond to new market opportunities swiftly and efficiently. This strategy moves from large-scale platform migrations to a modular system, allowing rapid adaptation to market changes.
Benefits:
- Enhanced Flexibility: The MACH stack offers unparalleled flexibility, allowing businesses to quickly adapt to changing market needs and consumer demands.
- Operational Efficiency: This approach improves operational efficiency, reducing the time and resources needed for system updates and maintenance.
Implementation Strategies:
eCommerce businesses can start by adopting a microservices architecture and prioritizing cloud-native development. By adopting this modular, agile architecture, businesses can harness it to create more robust, responsive, and customer-centric digital experiences that are easy to manage.
This modular approach enables many choices. Here’s a MACH Stack option suggested by Appu Jacob, Tidal’s ERP Technology Lead – Shopify’s Hydrogen as the Frontend, Contentful as a CMS, PIMWorks for Product catalogue and Salesforce or NetSuite for order management.
In Conclusion
The eleven trends we’ve explored—ranging from the creative applications of Generative AI and the immersive potential of Augmented Reality to the pressing need for sustainable practices—highlight a landscape in rapid transformation. The rise of AI-powered personalization, efficient inventory management, and the adoption of the MACH stack are not just passing trends but indicators of a deeper, more fundamental shift in how online commerce operates.
For businesses, staying ahead means embracing these changes and creatively integrating them into their operations to enhance customer experiences, streamline processes, and foster sustainable growth. As Tidal Commerce, we recognize the significance of these developments and remain committed to providing cutting-edge solutions that empower eCommerce businesses to thrive in this dynamic digital era.
If you have questions or need assistance executing these strategies, our team is available at hello@tidalcommerce.ca.
