Everything You Want To Know About E-Commerce

The Future Of E-Commerce | 2019

future of e-commerce

Many factors need to reach a suitable level for e-commerce to take off and achieve sustained growth. Online marketing and Social media marketing have evolved fully with the future lying in e-commerce stores not only being able to reach out to their consumers but also to deliver experiences that resonate with customers at an individual level. Brick & Mortar stores too are catching up with this new paradigm of experience and relevance that is sought by the consumer.

Shopify has provided a balanced perspective of the future of retail by taking into account all the negative events that have been occurring in mainstream retail. Holiday sales in the U.S. in 2018 were down at most major retailers such as Macy’s while only Target recorded growth in the period. But, even as e-commerce grew 16% in 2017, the highest level of growth since 2011, brick-and-mortar revenues were still $20 Trillion higher than those from e-commerce. Shopify says e-commerce growth is also slowing as the segment completes 25 years of existence. Most of the e-commerce action in the U.S. was cornered by five companies which had a 65% market share. So, even as growth slows at both brick-and-mortar and online retail, the situation calls for a nuanced approach.

Direct to Consumer

Shopify says DTC is where the growth is going to be in e-commerce. This category is being developed by Digitally Native Vertical Brands or DNVB, Shopify says. The core concept of DNVBs was the marketing of ‘value’ over a focus on ‘price’. This was done by implementing ideas such as discounts based on spending and not for holidays etc. and installment options. This core concept is about ‘ elevating people’ by identifying niches that can be marketed exclusively. And, this was not about a new strategy but actually connecting with people by actions that proclaimed unison with customers in terms of the issues of the day. Even as Social is seen dropping in potential, promotions are recommended to be targeted to those who had interacted. To make the best of Social, content that tells stories is what makes a difference even when being low in cost such as those generated by users themselves. Retargeting must also meet the DTC idea and Social is recommended to be moved to in-site.!

Focusing on e-commerce in 2019 and the next three years

Oberlo takes a detailed look at e-commerce in 2019 and beyond in a recent blog, by focusing more specifically at the recent past. In looking at the average 25% growth that e-commerce has achieved in 2014-2017, Oberlo provides a buoyant perspective. While we saw the $20 Trillion gap between e-commerce and brick & mortar in the Shopify report for the future, Oberlo focuses on the $284 Billion that will be generated by 2020 from e-commerce decisions made on mobiles which is projected to be 45% of total commerce decisions. Oberlo also reports that more than half of all buyers had researched on their mobile phones. The second trend that Oberlo sees after device utilization is the arrival of emerging markets as a crucial market for e-commerce. This includes Brazil, Russia, India, China and South Africa, the countries that are collectively known as BRICS. Oberlo points to projections that emerging markets will make up 20% of worldwide e-commerce revenues by 2020 with 3 billion potential new customers. Oberlo’s third trend is for brick & mortar moving towards a wider experiential model while its fourth trend is that video is going to dominate description of products over readable descriptions. Oberlo also sees personalization as being crucial with smart moves such as mailing content related to prior purchases.

New Retail

An OppenheimerFunds article in Forbes listed out the retail experiments that were being carried out by Alibaba, the world’s biggest e-commerce platform. Among them are ‘recommendation feeds driven by customer reviews’ and the deployment of ‘short-form videos’ at Alibaba’s Taobao platform. China’s third-biggest e-commerce platform Pinduoduo (PDD) had kickstarted a social group-buying model. Walmart sees food delivery in the future going straight into the fridge with the implementation of a one-time code that would allow a Walmart delivery person to go into the customer’s home with a live camera feed being seen by the customer and loading the fridge with groceries. An even-bolder idea is that there would be no more orders in the future, with deliveries taking place as and when fresh stocks are needed. These are the visualizations of Walmart’s U.S. e-commerce CEO who set up Jet.com and Spark Delivery, the latter being a crowd-sourced driver model where people can pitch in over short intervals of time. Another Walmart idea is personal shoppers who go through the shopping routine for customers.

Artificial Intelligence

At last year’s Shoptalk 2018, eBay presented its model of conversational commerce’ wherein the technology-focus of e-commerce is transformed into people-focus or personalization as we saw earlier. With AI, eBay sees applications for personalization such as connecting customers with the right sellers and the right ratings. Business-focused applications would be the selection of prices, shipping options and photos for product listings. As AI startups begin to blossom, eBay sees deployment of features such as speech recognition becoming easier to deploy. Both buyers and sellers are seen benefiting from AI Applications. Some of the interesting applications are image search through matching of images on a person’s mobile with those on the eBay store. A digital assistant called ‘The World’s Price Guide’ would be able to arrive at the present price of a product in a conversation with the user by querying about the particulars of the product. For sellers, finding the right box for a product to be shipped would also be done with the same AI technology deployed as Augmented Reality through a phone. The future of e-commerce as visualized by eBay through AI is Deep Commerce whereby consumers are able to link up with their passions. For sellers, the opportunities will be through the ability to reach customers around the globe and bargaining opportunities. Buyers would be able to find out what they need for different purposes and sellers would be able to connect to the right buyers through the knowledge on buyers collected and built up with AI.

Specific Industries


The essential mystique and aura of the biggest luxury brands did not make it an easy choice towards moving into e-commerce as this Yotpo article on the luxury industry explains. According to Yotpo, the new milieu of millennials making big-ticket purchases online and the need for brands to be in sync with customers has led to the big brands of the Luxury segment stepping down from their pedestal. Among the initiatives taken by the industry in e-commerce, Yotpo lists Gucci’s collaboration with online retailer Farfetch to deliver products in 90 minutes in ten cities. For lesser-known brands or new dropshipping-based stores, Yotpo sees brand-building success through measures such as ‘authenticated documentation’ and ‘online reviews.’ In the high-growth sub-segment of luxury resale, Yotpo says avoiding the high risk of even a single issue with counterfeiting is possible with ‘cutting-edge technological tools.’ Addressing the personalization perspective, Yotpo points out  the need to engage with a generation that ‘appreciates luxury’ and who might go in for low-cost but exciting designs and brands that are not out of their reach while transitioning towards the bigger brands with rises in income. E-commerce firms that tie up with bigger brands can offer the right product mix to younger customers, Yotpo says. Corporate Intelligence company CBInsights has provided examples of new luxury startups such as Cappasity allowing customers to view products in 3D with a VR headset. The CBInsights article also points to another trend in Luxury which is Renting of Luxury Goods, one that also is seen in the automobile industry. Another AR/VR application that CBInsights talks about is the Memory Mirror developed by MemoMi Labs that allows users to try out new colors of the products they are checking out while at the e-commerce store.


Nielsen quotes data that, of the worldwide FMCG market of $4 Trillion, e-commerce accounts for 7%, in its Report on Future Opportunities in FMCG e-commerce. The countries that lead in online FMCG are China and South Korea with 16 and 18% of their FMCG markets. The worldwide share of FMCG e-commerce is expected to be 10 to 12% of the overall FMCG market in 2022. One of the findings of the report is that the growth in FMCG e-commerce in developing markets will be double that of developed markets through 2023. The markets that are slow movers in FMCG e-commerce are Latin America, Germany and India. Among the 10 key drivers of FMCG e-commerce identified by Nielsen, the foundational drivers are GDP, bank account penetration, internet penetration and smartphone penetration. The macro drivers are Ease of doing business, population density and postal reliability. There are two social drivers which are Trust and Savings culture. In Supply-based drivers, Nielsen has identified Maturity of FMCG e-commerce players.. Expanding on the social driver of Trust, Nielsen points out that the lack of Trust with regard to quality is what is hampering online FMCG growth in Latin America. Among the ten drivers, India is rated as poor in five drivers including the ‘ease of doing business’, rated average in two drivers of ‘Trust’ and ‘Postal Reliability’ while being rated optimal in three drivers of ‘Savings culture, GDP and ‘Population density.’ Among the poor drivers in the research on India is Bank Account Penetration where Nielsen sees the threshold of success being 94% of the population with a bank account. In comparison to China, India is rated poor in ‘Maturity of FMCG e-commerce players’ on which China is rated optimal. The more mature a market is, the more innovative and cutting-edge its services will be, Nielsen says. The current innovations in online FMCG that Nielsen describes in the U.S. and China include predictive personalization and voice-based shopping.



At just 1% share of online FMCG in overall FMCG sales, Brazil is also among the slow starters such as India (which has a negative 1% share of online FMCG in overall FMCG). The Nielsen Report sees Brazil being optimal only in two of the ten drivers, of GDP and ‘Savings culture’ and poor in all the remaining eight drivers.


Russia too has the same level of online FMCG share of total FMCG sales, of 1%. While Russia is rated poor in five drivers, it fares optimal in ‘ease of doing business.


The UK  currently has a 6.3% share of FMCG e-commerce in total FMCG sales. It has optimal ratings over eight drivers while rated average on ‘Trust’ and poor on ‘Savings culture.’ The countries which are rated Optimal in ‘Trust’ are the US, Singapore, and Sweden. This is one of the key areas that future e-commerce brands in FMCG have to focus on.


The reasons for China’s rapid growth in e-commerce stems from the fact that more Chinese are traveling abroad and back and continue to use brands they have become exposed to. This is one of the five trends identified by a report of the World Economic Forum on Future Trends in e-commerce in China. One of the other trends is expansion into the rural markets. JD has plans to develop close to 200 drone airports to serve inland regions. With a current 16% share of e-commerce in total FMCG sales, China is going to be the leader in online FMCG in the near and distant future too. Its weak points come in the form of bank account penetration, internet penetration and smartphone penetration with all three rated poor in the Nielsen report. While its neighbor India has five poor drivers, China has five optimal drivers in GDP, Population Density, Postal Reliability, Savings Culture and Maturity of FMCG e-commerce players. It is rated poor in Smartphone penetration for which the threshold identified by Nielsen is 67% of the population and Internet penetration where the Nielsen Threshold is 85% of the population.

The Broad View

Unified Retail Commerce

This Gartner blog on how Walmart is reclaiming its position in ecommerce and retail-of-the-future talks about the transformation from Multichannel to Unified Retail Commerce. Placing the customer at the center of all processes, the blog lists the following steps towards making the transformation.

  • Customer Experience and Operational Execution
  • Digital Business Transformation
  • Customer Loyalty and Engagement
  • Customer-centric Merchandising
  • Digitally-enabled Workforce
  • Algorithmic Retailing

Gartner specifies the prime focus to be on the customer, by looking at what technologies are being used by the customer and then ensuring that all customer needs are met. This requires tying up with suppliers and other providers of third-party services towards fulfilling and achieving the objective of ensuring a customer-oriented focus. There are four customer processes that need to be addressed in this customer-centric framework. They are Browse, Transact, Acquire and Consume. The successful e-commerce store of the future will focus on enabling customers across each of these four customer processes.

Moving into the specifics


McKinsey has compared its projections of 2016 with actual developments in 2018 with regard to last-mile delivery. It reported in 2016 that ‘customer expectations were high and rising,’ that ‘automation potential was high’ and that ‘competitive dynamics were changing.’ After 18 months, in 2018, McKinsey says that technology was way ahead of what it had expected and projected in 2016. It says that most last-mile projects that were at the pilot stage in 2016 are now rolling out. Among developing tech, McKinsey lists van/drone integrated system and smart door lock. While electric vehicles are already being produced, McKinsey forecasts more scalability towards achieving cost effectiveness and convenience for customers. While the interim future will see autonomous vehicles following delivery personnel in a semi-autonomous model, the future in five to ten years will consist of fully automomous delivery vehicles, McKinsey says. The savings in delivery costs are seen from 10% to 40% over this period of progression to semi-autonomous and full-autonomous delivery vehicles. After ten years, McKinsey sees robots making deliveries to the doors of customers. Existing Courier, Express and Parcel companies are expected to continue to dominate but newer companies can grow in same-day and instant delivery, the McKinsey report notes. However, the highest transition of value is expected within the standard delivery segment (deferred/express) from existing players towards autonomous-vehicle makers, IT operators and customers as well as among the courier, express and parcel companies themselves.


Australian company Amcor talks about the traditional supply chain with five touch points now expanding to ten touch points in the e-commerce model. Amcor points out the advantages such as not needing to have attractive packaging as in-store product packaging would need to be. Shapes and sizes can now be adopted to suit tougher supply-chain requirements and to meet the requirements of the customer in home rather than the product requirements on shelf. Amcor sees its offering of channel-specific packaging as contributing to experimentation. An example it provides is Procter & Gamble dropping its Tide jug for a bag-in-box packaging for e-commerce. Another option is to go in for is omnichannel packaging with the same packaging across offline and online. Amcor sees Unified packing as being suitable for companies with lean supply chains and also for those with the ability to deploy smart packaging solutions such as RFID and QR codes, as these can help in better tracking which is essential for e-commerce. Channel-specific packaging is suitable for companies which are experimenting and those seeking to provide secure packaging guarantees for customers across any type of delivery model.


It has been a year now since McKinsey reported in February 2018 about subscription e-commerce being a growth area within e-commerce. The segment had grown 100% in the previous five years but the rate of customers dropping out because of low satisfaction on the overall experience was also highly prevalent. A Survey conducted by McKinsey on subscribers of consumer goods showed that over 60% were women. Within male subscribers of consumer goods, 42% subscribed to three or more products. The overall demographic within the subscription segment was ‘young urbanites.’ McKinsey categorized subscriptions into three varieties which were subscriptions for replenishment, subscriptions for curation and subscriptions for access. In the first type, customers looked to ‘save time and money’ on items such as ‘razors and vitamins.’ In the second type, of curation, subscribers were looking for surprises in the curated selection of a number of different items, upon which customers would then decide in a varying number of ways to purchase etc. Companies operating in this subscription model included Birchbox (beauty), Blue Apron (meal kits) and Stitch Fix. In the third subscription type, of access, customers were looking to gain ‘exclusive access’ to  products within apparel, food etc. The key to a successful subscription service is in the consumer gaining a personalized experience, McKinsey says. Those subscribing to curation and access were looking out to get a fresh, innovative experience too. An important need for customers was to be able to change their subscription volumes as and when they felt the need to do so.


One of the Venture Capital companies that is looking to develop new businesses in ‘Personal Care’ and ‘Digital’ which has a strong background in retail is Unilever Ventures. For its ‘Digital’ investment portfolio, Unilever Ventures is looking to invest in marketing companies that are experienced at content creation, data analytics, e-commerce, Internet of Things, Mobile Marketing, Social Media and Video. All of these are the focus areas of the future of ecommerce as well.While content creation and data analysis are the core pillars of e-commerce, the other three areas of IoT, MM, SM and video are all the newer tracks that the future of e-commerce will be based on. Consulting Firm Kantar Consulting looks at the need to focus on branding in the overall environment of disruption by technology which has led to the need for specialists for the different roles in digital marketing. In terms of strategy, Kantar Consulting raises the need to have local data that is strategized by mid-level managers and not at the top of the marketing hierarchy. Just as startups succeed with a focus on experimentation and action, Kantar Consulting advices brands to adopt the attitude of startups and their visionary entrepreneurs. The e-commerce marketing generalist of the future will be a person not having a specialized skill but one who is an  ‘i-hybrid’ of investigator, instigator, influencer, inventor and investor,’ Kantar says. The consulting firm recommends fluidity in planning processes with the involvement of all stakeholders who are part of the brand.

Customer Service

This article in Entrepreneur.com talks of all the focus areas that we have seen in our exploration of the future of e-commerce thus far, with the most important that we have identified being that of Personalization followed by Big Data and AI, although all three are listed in the article in a different order. Additionally, the article raises the important aspect of customer service. The core aspects that an e-commerce store needs to focus foremost is in the speed of response to all queries and requests of customers. Another area that needs to be ensured is the time expended by customers in checkout. The process has to be stripped of all unnecessary aspects so that checkout is simple and quick. Customer Service also needs to be geared towards reaching out to the customer for acquiring their feedback at all times. When there is any negative feedback, it is the key to improve and inching ahead towards better and greater customer experience. The article cites data from an American Express survey that showed that 33% of customers decided to make their purchase at a different store due to just one encounter with bad service. The Survey also noted that Millennials shared their experience of good customer service with their friends and relatives as compared to the trend of previous generations sharing experiences of poor customer service. The better a store’s customer service is, the more that it gains organic positive word of mouth. And again, the crucial element that the Survey finds is ‘personal connection matters’.

The best e-commerce store in the future is one that builds a personal connect with each of its customers, one that is fleet footed in adopting all new technologies and one that always keeps the customer at the center of its operations.

In rounding up, let us look at the ways that a traditional brand can get initiated into e-commerce, ways that are also a guide for an e-commerce startup. Accenture’s Report on the Consumer-Packaged Goods sector begins by looking at the way that e-commerce as a CPG channel has been performing over the years. In 2010, e-commerce ranked seventh among CPG channels below large formats, service outlets, proximity, health & beauty, discounters and direct. In 2016, e-commerce moved to sixth by pushing the ‘direct’ channel down to seventh. Accenture projects 2022 channel ranking for CPGs with the top four being Large Formats, Service Outlets, Proximity and e-commerce to be the fourth-important CPG channel.

At the same time, Accenture points out that e-commerce is more than just a channel as there are consumers who might only purchase a product that is available online. Further, as customers who are worried about privacy block tracking by third parties, e-commerce becomes the direct relationship between a brand and its customers. With the data that is generated by online communication and interaction, delivery across all channels can be improved.

In terms of future projections for online CPG, Accenture sees China with $55 Billion in sales in 2022 which would be 50% of the world market in that year. Second and third would be the U.S. at $14 Billion and the U.K. at $10 Billion. While China’s growth is expected to be across all product categories, which is seen elsewhere in the U.K., the U.S. is projected to see online CPG growth in cosmetics, skin care products and set kits. In South Korea, the top three products are projected to be diapers, baby food and rice followed by coffee and bottled water. Chinese online CPG sales in skin care is seen at 27% in 2022. Hair care and oral care products are projected to be bought online in China at 26% and 23% respectively. Fragrances are projected to be bought online in a larger proportion across China, U.S. U.K at 18%, 15% and 30% respectively.

In this scenario, Accenture reports that while the big CPG companies had all the consumer insights earlier, it is now with the big Tech companies such as Amazon and Google. Accenture’s report on Building Modern Relationships to drive CPG sales lists out three levels of e-commerce maturity that traditional CPG companies have to progress through in order to tap the potential of online sales

1) The Basics
It begins with attaining expertise in Search and optimization of content and catalog management. And of course, the optimization of customer experience

2) Scaling
In this phase, companies have to optimize product assortment mix and have to arrive at competitive pricing

3) Lead
The leadership phase involves mastery over the supply chain and over packaging to be followed by the crucial element of innovation driven by customer – centricity.

Within the actionable areas of optimising customer experience as a part of building basic strengths, Accenture recommends the creation of customised content and the “perfect digital shelf” of product description and images. In the second maturity level of scaling, Accenture specifies dynamic pricing for products that are popular and ‘minimum-advertised’ pricing for products that are of high involvement with customers. In the leadership phase, Accenture recommends partnerships with companies that optimise supply-chain planning and forecasting. And finally, the leadership phase is identified as being marked by the development of online-only products towards personalization.

As both startups and traditional brands go about mastering their customer relationships, there is a move that is always possible as product innovation reaches its highest maturity in e-commerce. This is with the movement of e-commerce companies towards featuring their products in brick & mortar stores. Entrepreneur.com lists out the ways to go about Taking your product into big-box stores.

The future of e-commerce lies in finding out and delivering what customers want, where they want and when they want. Smart solutions are always being churned out by the technology industry leading to ever-more finer refinements in all areas of operation of an e-commerce store. With an e-commerce brand that is attuned to the future, you can derive the best experiences for your customers and for your entrepreneurial evolution.

Share on facebook
Share on google
Share on twitter
Share on linkedin
Share on pinterest

Leave a Reply

Your email address will not be published. Required fields are marked *

Leave us your email and let's be friends. Promise, we won't spam - unless you can't tolerate excessive amount of gifs.