E-Commerce Trends And Challenges

Updated on May 17, 2022
In this article
In this article

eCommerce or electronic commerce is a business model that includes product and service purchasing and selling over the Internet. eCommerce trends will be covered in the following paragraphs, as well as eCommerce challenges that lie ahead. First, let us take a look at the eCommerce trends.

Headless commerce

One of the first eCommerce trends we will mention is headless commerce. Headless commerce separates the “back-end” and “front-end” of the eCommerce application. Headless commerce is a relatively new way for brands to do e-commerce, which differs from traditional e-commerce in that it includes the separation within the application.

Headless commerce is a step forward in bettering the consumer experience. As customer demands rise, the customer experience across various platforms matters more than ever. Headless commerce allows for changes to be implemented quickly across various platforms. It is a lot more flexible than traditional eCommerce applications and a lot more change-adaptive.

For example, separating the front and back ends will make them visible immediately if changes are made to the visual shop. On the other hand, with traditional e-commerce, it can take minutes, or even hours, for changes to be visible to consumers. Another essential thing to mention is that a range of solutions can be connected using an application programming interface (API), which allows two applications to talk to each other.

mCommerce and PWAs

M-commerce, or mobile commerce, includes digital shopping from mobile devices. M-commerce includes everything from viewing the item on your device to ordering and paying for it. Many online shops are using this type of commerce; however, it is still important to emphasize the need to implement this method. Customers want the opportunity to shop in every setting they find themselves in, whether on the train, in the office, or simply when taking a walk. 

PWAs or progressive web apps

Progressive web apps include advantages of classic websites and conventional apps. Progressive web apps also work great with mobile commerce, as they can add on functions such as push notifications, home screen buttons in the app, offline settings, and many more. On top of that, PWA is also related to headless commerce in that headless commerce is usually the base for PWA, as the PWA will work as a front-end, and then other changes can be made in the back-end without changing the front-end.

selective focus of small carton boxes on digital tablet, e-commerce concept
E-Commerce Trends And Challenges 5

Social commerce

Social commerce includes linking social media channels to the online shop so customers can look at their products and order them via social media apps. For example, Instagram, Facebook, and Snapchat have built-in shop features. Social media apps are also an amazing way of reaching consumers and expanding the brand’s target audience. This process can also be fully automated, thus benefiting the brand in efficiency.

Live video shopping

Live video shopping took off during the COVID-19 pandemic because people were in quarantine and could not access shops online. Live video shopping allowed consumers to see how products would look in real life, not just in a picture. One of the ways to implement such a consumer experience is to hire a shopping consultant or an influencer who will focus on presenting the product in a video live stream. It offers a more in-depth customer experience, and some customers also appreciate personal advice on what to look for and what would be a good fit.

On the other hand, this aids in customer contact and personal advice, which can also work as an alternative to the in-person shopping experience and attract new customers who previously did not utilize online shopping methods. Live video shopping is especially popular in industries that concern furniture and home décor, lifestyle in general, fashion and beauty.  

This enables direct customer contact and personal advice, which can essentially replace the shopping experience in local retail outlets. This also allows you to attract new customers who have previously avoided online shopping.

Augmented reality

Augmented reality is used to place the product virtually into an existing environment. For example, if you want to purchase a chair, you can insert the virtual chair into your home and see what it would look like using AR. Some benefits of including AR in your eCommerce shop are:

  • Customers can get a good idea of how the item appears in their environment
  • The product can also be interacted with
  • Incorrect purchases correction
Placing new furniture on a digital tablet into the empty interior, looking how it looks before buying. Concept of augmented reality in design and retail business
E-Commerce Trends And Challenges 6

Sustainability & social corporate responsibility

Sustainability and social corporate responsibility do not only concern the eCommerce sector, rather it affects all industries. Many customers have claimed that social responsibility and sustainability are important to them. Thus, they are choosing to purchase products only from companies and brands that have proven environmentally and socially aware.

Retail Dive has stated that approximately 60% of consumers want to start purchasing from sustainable eCommerce brands in the next couple of years. Most of them also agree that shopping green and online can reduce the negative side effects on the environment. Thus, brands need to prove to the consumer that they are, for example, decreasing their carbon footprint, and are actively participating in the fight against climate change.  

Omnichannel

Omnichannel eCommerce focuses on providing customers with an amazing experience at every touchpoint in every channel. Customers can simultaneously use more channels when shopping; for example, they can look for a product on one channel but complete the purchase on another.

Omnichannel eCommerce integrates other parts of brands, such as inventory, customer service, and managers of different company sections, with store owners.

According to Shopify, “51% of consumers said the ability to check out online and return items to a brick-and-mortar store significantly influenced their buying decision. Accordingly, 44% of brands planned to prioritize this in 2022.”.

The BOPIS (buy online and pick up in store) system has been increasingly popular, therefore a lot of shops plan on implementing it throughout the future. This type of omnichannel eCommerce can help a company reach a new customer base. Combining multiple channels also interconnect their customer bases, thus increasing the target audience. After introducing some of the eCommerce trends of 2022, it is time also to introduce some of the eCommerce challenges.

Competitiveness within the eCommerce industry

According to Statista, eCommerce is projected to account for approximately 20% of global retail sales by the end of 2022. Five years ago, this number was merely 10%. The eCommerce sector is growing quickly.

According to a recent industry report, e-commerce will account for 20.4% of global retail sales by the end of 2022, up from only 10% five years ago. In other words, the e-commerce space is becoming more crowded, with the constant increase in competition. One of the reasons for such a surge can be attributed to the COVID-19- pandemic. Many have switched to the eCommerce business in order to catch up with the constant increase and change in consumer demand and behavior.

3D illustration of pawns and queen of a chess game, on a target over a black background
E-Commerce Trends And Challenges 7

Increase in costs of advertising & less effective campaigns

Considering there are numerous eCommerce businesses, it is understandable that every one is fighting to get the attention of as many consumers as possible. The increase in competition has led to an increase in the costs of advertising, while the ROAS (return on ad spend) has decreased. For example, Facebook advertising pricing has increased by roughly 47% in a year. Another challenge that arose was Apple’s privacy policy updates. Users can now choose “Ask app not to track” thus making it impossible for companies to use cross-app data sharing. This, in turn, has made advertising via Meta a lot less effective, resulting in significant overall campaign ineffectiveness.

Foreign business expansion

Many eCommerce businesses are deciding to expand globally. However, this in itself has numerous challenges. Some of the challenges include:

  • Entering a foreign market means putting forward a lot of money, with the increased risk of getting no return on the investment
  • New countries mean new and different cultures. The inability to adjust to the culture can reflect poorly on the business
  • Competition in an unfamiliar market can be a challenge and a problem for the new business
  • Import and export of products and services can also be severely affected, depending on which country or region the company is opening up

Before expanding into a foreign market, a company should always see if the product development is well adjusted for the new market to achieve favorable market penetration. Other questions, such as how much investment is necessary and how to overcome new foreign competition, should always be discussed in detail before the international growth.

Foreign languages translation or learning languages online. Mobile phone or smartphone with dictionary app on the screen. 3d illustration
E-Commerce Trends And Challenges 8

New financial methods

Many companies are changing the way they are financing their businesses. One of the first ways of abandoning conventional financing methods includes reasons such as that bank loans, for example, are bothersome to apply for and extremely time-consuming. Loan repayments every month, in fixed installments, can put pressure and stress on the company.

Therefore, numerous different financial instruments appeared throughout the years to attract new businesses. Some alternative financial instruments include cash injection, such as RBF (revenue-based financing) or inventory financing. RBF uses a fixed percentage of revenue as a repayment method (until the total sum is repaid) and not a fixed monthly installment. This decreases the pressure on companies; for example, if a company makes 50% less revenue this month, a fixed % will only be deducted, and not a fixed amount, which makes a huge difference for companies in the long run due to the benefits of such flexibility.

Even though alternative financial instruments are extremely attractive, companies should not completely abandon the idea of conventional financing methods. Sometimes, conventional methods can be a safer way for the company, but if they do not fit the company entirely, they can be combined with alternative financing methods. Ultimately, it is up to the company to decide what type of financial instrument and method best suits the business to grow successfully.

Create your own brand with Wonnda and join the world of eCommerce

After we have covered the challenges and trends of the eCommerce industry, it is time for the next step. If you are interested in starting your own brand and entering the eCommerce industry but are unsure how to get your production up and running, you are at the right place.  

Whether you’re an aspiring entrepreneur with an innovative product idea or an already existing retailer that is aiming to diversify the assortment of your own products, launching your own brand through a private label or contract manufacturing could be just the step you need to take your business to the next level.

At Wonnda, we work with top European producers for private labeling and contract manufacturing. The first step in getting your desired product to the market is probably the most crucial – finding the right production partner and manufacturer for your product and project. The great advantage of Wonnda is that you can simply let us do the tedious work, and all you need to do is let us know what you need. Tell us quickly about your project or product idea, and we will approach the most suitable manufacturers and connect you with them.

Source, Manage & Scale Your Product Line With Wonnda

Wonnda is the fastest growing B2B platform for private label sourcing in Europe, offering direct access to trusted and verified suppliers and a comprehensive digital infrastructure for efficient supply chain management.

With an over 80% match rate between buyers and suppliers and the ability to order samples directly through the platform, Wonnda makes launching your product line faster and more cost-effective.

About the author
Alice Pegorin
Alice Pegorin is a talented writer and a world-citizen who was born and raised in Brazil. In 2019, she moved to Lisbon, Portugal to pursue a BSc in Marketing and Advertising at IADE-UE. Following her passion for business management, Alice moved to Berlin, Germany in 2022 for her Erasmus semester at UE-Germany, where she completed her studies. Alice is a curious and open-minded individual who adapts easily to any environment. She enjoys exploring new cultures and experiences, and is always eager to learn. Currently based in Berlin, Alice travels to Portugal from time to time to visit friends. Her passion for writing and business management makes her an invaluable member of our team at Wonnda, and we're thrilled to have her on board.
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