Technology is advancing at a blinding pace, and no industry today remains untouched by its growing footprints. New technological trends are immensely capable of providing great opportunities to businesses in the near future.
The objective of any business is to increase productivity and maximize profits. These goals are generally attained by cost reduction, value addition, and expanding market share. This is where digital transformation comes into the picture, which is compelling organizations to change their business models and adapt to the new drive of innovation. In other words, cutting-edge technology is set to be integrated into all aspects of business, thus radically changing how companies will operate and the value they will deliver to their customers.
Here is how technology is going to change the future of online business:
1. AI and Machine Learning Will Take Automation to the Next Level
Artificial Intelligence (AI) and Machine Learning (ML) have far-reaching implications for e-commerce businesses. Today, virtual assistants like Siri and Alexa are already creating waves, while many businesses are using AI algorithms to streamline their processes. According to a recent study conducted by Gartner, by 2020, 85% of interactions between customers and retailers will take place without human intervention. Thus, AI has the ability to bring a paradigm shift in customer experience (CX). It has become very important for businesses to create a seamless and personalized CX. Machine learning uses statistical techniques to give computer systems the ability to learn with data. As a result, companies can come up with customer-oriented solutions. AI-enabled algorithms can help create personalized marketing messages; geo-location software can help employees know where customers are shopping, so they can help them find what they are looking for.
Chatbots are very interactive AI tools that can drastically enhance CX. These software programs can perform a multitude of functions, including scheduling of appointments, creating shopping lists, and even forecast the weather. An intelligent chatbot can efficiently answer genuine customer concerns and provide solutions that are specific to a particular product or service. These bots can effectively handle on-site chat sessions, social media posts, or tweets. Furthermore, machine learning will vastly improve e-commerce product search capabilities. It will enable businesses to better understand what products or services exactly shoppers are searching for.
An important aspect of implementing AI in e-commerce is smarter logistics and warehouse automation. It improves delivery efficiency, decreases shipping costs, and streamlines warehouse operations. A good example of an effective product delivery mechanism is Mercato, which gives customers direct access to the best quality of food shops. Its delivery is faster, easier, and highly convenient. Furthermore, Chinese e-commerce leader JD.com has opened the doors to unmanned warehouses, where AI and robots will be responsible for handling jobs related to parcel sorting, packaging, and categorization.
2. ERP Solutions Are Breathing New Life into Small and Medium Businesses
Running and maintaining an online storefront is never easy for retailers. However, integrating an ERP system with e-commerce sales channels can give a huge boost in terms of streamlining various processes. These processes include anything from customer relationship management (CRM), order management, inventory management, labor management, accounting, etc. ERP incorporates all these processes and integrates them to run a business. Following are key benefits of integrating ERP solutions with e-commerce businesses:
- Integrating ERP systems can provide an accurate view of product data, available inventory, or latest pricing and promotions in real-time. The integration helps eliminate the requirement of re-entering the data, thereby reducing the data redundancy, human involvement, and error.
- The available real-time data being provided by ERP systems to online storefronts helps customers view latest order status, available inventory, and the status of delivery with tracking numbers.
- It boosts customer experience. Right from the time a customer lands on an e-commerce website until the moment of checkout, smooth navigation is a must. This is very important for bringing them back. Thus, ERP helps improve websites’ aesthetics in the form of item descriptions, images, SEO content, and products attributes.
- Businesses can generate financial reports in ERP, which gives clarity in financial information. Since accounting is complex and time-consuming, integrating ERP will help produce balance sheets, cashflow statements, and P/L statements.
3. Adoption of Blockchain Technology Can Be a Game Changer
The blockchain revolution can profoundly impact the e-commerce industry. Blockchain is a distributed digital database in which transactions are made chronologically and publicly. It is undeniably an ingenious invention that can be programmed to record not just financial transactions but virtually everything of value. The decentralization of control will help businesses build a consensus-based trust, which encourages transparency at the fundamental level. The e-commerce industry has certain inherent challenges in terms of payments, supply chain management, data security, lack of transparent marketplace, etc. Enter blockchain, and these challenges can be readily resolved. Blockchain will affect the e-commerce industry in the following ways:
- Payments: Blockchain can overhaul the way payments are made in the e-commerce industry. Although companies are using foolproof mechanisms to make payments and transactions secured, cyber attackers are always after the customer information. They can get hold of important information and use it to their advantage. The decentralized platform of blockchain facilitates easy, fast, and secure transactions. There is no need to provide personal and financially sensitive information to a third party.
- Decentralized marketplace: Being a decentralized digital ledger, blockchain will help businesses and customers directly interact and transact with each other without the need of an intermediary. There is no central authority or company that sets the rules and decides how transactions will take place.
- Data security: E-commerce companies have a huge amount of data that is collected from customers and other social media platforms. So, with the help of blockchain technology, this important data can also be decentralized. It is virtually impossible to hack all the nodes of a blockchain platform.
4. Big Data Will Help Anticipate Trends
Big data analytics and its applications are gaining a lot of traction as it can be leveraged to anticipate changes and trends in the market. Big data is the collection of traditional and digital data from inside or outside of company operations. With the evolution of technology, the methods to gather and analyze data also diversify. E-commerce companies can make good use of big data, predict customer behavior, and streamline their operations. Retailers who leverage the full power of big data could increase their operating margins by as much as 60%.
With the help of latest trends, spikes in demand, and customer preferences, e-commerce companies can make sure best-selling products are available and being marketed. The pages visited by customers, the duration of engagement, and the search for certain products or services can give valuable insights to businesses. Knowing these touchpoints will increase the understanding of customer behavior. With the help of advanced data analytics, e-commerce companies can detect fraud in real-time and employ proactive solutions. Furthermore, big data analytics allows e-commerce businesses to cross-sell and upsell.
5. Adoption of More Subscription–Based Services
Subscription-based e-commerce is a fast-growing trend of buying online. A recent study conducted by Mckinsey shows that around 15% of online shoppers have signed up for one or more subscriptions to receive products on a regular basis. The report further says there are three types of subscriptions – replenishment, curation, and access. The replenishment subscriptions help in automating the purchasing process. Curation subscriptions provide surprises in the form of new items or personalized experiences. Access subscribers have to pay a monthly fee to get member-only perks. Thus, from fashion to entertainment to even homemade foods, subscription services are the future of the digital retail industry. The success of Netflix and Amazon Prime is a perfect example of the growing importance of subscription-based services.
Subscription services allow the flow of stable revenue stream. The providers are better able to forecast costs, revenue, and profits. Also, the steady nature helps effectively shape future offerings. It will help e-commerce companies know what kind of products subscribers need and at what time of the month. It will help manage their inventory better, thereby avoiding waste. Subscription services allow regular interaction with customers, which means an opportunity to cultivate a good relationship. By receiving customer feedback, they can act on it more quickly. The subscription business model is automated, which means no forgetting orders, no delay in delivery, and no need to provide information again and again.
6. Augmented Reality Is Immensely Promising
Augmented reality (AR) is gaining a lot of prominence that has a huge potential for business growth. It has already entered in various domains, including gaming, media and entertainment, marketing, and education. With growing technological advancements, AR is ready to provide real value to businesses and customers. According to Statista, augmented reality is expected to acquire 1 billion users by 2020. AR is ready to take the e-commerce business to the next level. Thus, it can improve the current customer experience by:
- Allowing customers to see products in 3D images and from any angle;
- Helping them in determining whether a product (e.g. clothes) will fit correctly;
- Making a product to be viewed in context, rather than isolated;
- Being more immersive by increasing engagement
In the age of an intense competition, incorporating AR will help retailers stand out from the crowd. It has the potential to deliver personalized products or services to masses. AR devices can provide users with the in-store shopping experience irrespective of their locations. These devices can superimpose 3D objects in spaces. For example, IKEA, a furniture company, has created an AR app that allows users to see how furniture will look in their home setting.
7. Capitalizing on IoT Will Be Inevitable
Internet of Things (IoT) can revolutionize the e-commerce industry in many ways. IoT-enabled devices exchange data with each other through the internet, helping retail and e-commerce businesses to carry on their operations efficiently. As per the findings of Retail Vision Study, 70% of the retailers worldwide are ready to adopt IoT to improve customer experience. A good example of IoT technology in retail is the initiative of “smart mirrors” that enables customers to try on clothes and jewelry virtually. Below are the key applications of IoT in the e-commerce sector:
- Inventory management: The use of RFID tags and IoT sensors can effectively manage inventory in real-time. These IoT-enabled devices will help track and monitor all the inventory items. Inconveniences and human errors can be greatly minimized using IoT.
- Logistics: IoT-enabled software ensures that commodities move from one place to another efficiently and smoothly. GPS and RFID technologies will help track products from production to final delivery.
- Increased customer experience: Retailers can deliver an exclusive shopping experience to customers with a higher level of personalization. They will be able to know the insights about the products that are very much popular in social media. This will lead to better customer engagement and satisfaction.
Opinions expressed here by Contributors are their own.