As 2018 draws to a close, we look back on the year to see what was new and exciting in the world of e-commerce.
What newsworthy events happened this year in online retail and what could it mean for the future?
1. E-commerce Exploded
E-commerce spiked in 2018 higher than ever before. According to a report by Shopify, e-commerce boomed from $1.9 trillion to $2.3 trillion in worldwide sales, equaling about a 17% increase across the globe.
It’s anticipated that this number will spike up to $4.5 trillion by 2021—which is more than double what it is now. E-commerce is not slowing down by any means.
There are a number of reasons e-commerce is doing so well. From an increase in technological advancements to improvements in delivery processes and omnichannel experiences, e-commerce retailers are learning how to create strong interactions between brand and consumer. All this, and e-commerce technology and marketplaces are still only in their infancy.
E-commerce is growing at an exponential rate. It’s past the point of conspicuous, it’s the elephant in the room.
2. B2B is Up Now
Although many of us think of e-commerce as product-based B2C (business to consumer), B2B (business to business) is a more profitable arena. In 2017, B2B e-commerce sales were 234.78% higher than B2C sales worldwide. While we’re still waiting for the final 2018 figures to come out, analysts believe this year’s trends will show the same, if not greater increases.
The fact that B2B completely dwarfed B2C this year is demonstrating an overall shift of how our society is conducting business. The majority of business partnerships are hosted online through digital platforms. Businesses can hire remote employees by using B2B software. Companies can have global partnerships by working through online platforms. Brands can interact anywhere at any time.
Businesses big and small are buying tech software at higher rates and utilizing online resources more than ever before. This is something to consider for your marketing campaigns as we move into the era of online B2B market domination.
3. Amazon Took Over
Halfway through the year, Amazon officially took 49% of the entire U.S. e-commerce market and 5% of all retail spend. Their sales are coming out to nearly $258.22 billion for the year. This explosion made serious news in July, and economists are still reeling about it in December.
There are also over 100 million Amazon Prime members, and those numbers are likely going to be much higher by the time this article is published (Prime signups during the holidays). This means Amazon is retaining over 100 million loyal, dedicated customers who pay a fee for free shipping, Prime music/video, and enhanced service. There is no other company out there with this kind of loyal fan base. Even Apple’s loyal cultish following shutters at the comparison with these numbers.
Here are a few takeaways from Amazon’s takeover:
Amazon started as an online bookstore, and now they’re the powerhouse of the entire retail market. Don’t be afraid to launch your store and dream big. You don’t know where it can take you, especially if you have the right resources on hand.
Horizontal expansion works. Amazon is more than just a product marketplace. They’ve expanded into fulfillment, shipping, grocery, movies, music, and so much more. Try out different products and ideas to see where your business shines.
Sell on Amazon. Even if you do most of your sales on your own website or another platform, Amazon is a powerhouse you can’t ignore. If you’re not selling on Amazon, you’re missing out on serious exposure to potential customers.
Learn how to optimize on Amazon. If you can win the Buy Box, you’ve got a potential gold mine at your hands.
“We’ve had three big ideas at Amazon that we stuck with for 18 years, and they’re the reason we’re successful: Put the customer first. Invent. And be patient.”
– Jeff Bezos, Founder, and CEO of Amazon
4. The Youth Stepped Up
Millennials are growing wealthier, and Gen Z is beginning to enter the online shopping economy. 2018 was the first year that both generations held the majority of the purchasing power in the e-commerce realm. In fact, Millennials make 54% of their purchases online.
Millennials report that they would purchase even more online if the options were available to them. And those options are quickly becoming more and more prevalent. From grocery delivery to one-hour shipping, we anticipate that Millennials will begin making the vast majority of their purchases online. This will further skyrocket the value of e-commerce, especially as younger generations take hold of the market.
What does this mean for your online business? It’s time to focus on the Millennial and Gen Z customer. Learn how to make the shift with these resources:
5. Mobile Leveled the Field
Millennials and Gen Z buy more on their mobile devices than other generations do, which contributed to the spike in mobile purchases this year. Mobile was one of the hottest trends in 2018, accounting for nearly 52.2% of all worldwide online traffic. It’s anticipated that mobile will be responsible for 27% of all US online retail sales by the beginning of next year.
But we’ve seen the growth of mobile for some time now, so it’s not unexpected that mobile browsing and purchasing have become so large. What is surprising is that mobile is actually helping smaller retailers even more than it is bigger brands. In fact, an Adobe report in 2017 found that small retailers saw a 30% higher conversion rate on smartphones compared to larger retailers for Cyber Monday. This is likely to do with small businesses promoting on social media and leading customers out to their mobile-friendly sites.
It’s time to stop thinking mobile is just for the big players. If you’re a small to medium-sized online store, it’s never been more critical to become mobile. How to make your site ready for mobile conversions:
Have a mobile-responsive site with user-friendly layout
Make payment safe, secure, and comfortable
Streamline the process with just a few clicks
Allow for auto-fill of passwords and credit information to speed up the process
Most importantly, you want to acknowledge the mobile customer as different from the desktop one. They’re shopping in different ways, so you want to make sure to adjust your marketing accordingly. Learn how to understand the mobile e-commerce customer here.
6. America Ceded the Top Spot
In 2018, according to Statista, the U.S. only holds 18.3% of the global retail e-commerce sales. All western countries in North America and Europe together only equal 16% of the e-commerce world. In fact, Asia is nearly 7 billion stronger than North America, equating to nearly 84% of all e-commerce sales.
The U.S. is expected to move down to only 16.9% of total e-commerce sales by 2020. This means all that growth we’re experiencing in America is nothing compared to what’s happening in the rest of the world.
This is more than just a rise in globalization. Technology and communication efforts are making it easier than ever for sellers to become international traders. This is a wake-up call to small businesses looking to grow. If you’re finding competition fierce in America, it might be time to look overseas for untapped markets and demographics.
Check out our free 10 Hacks High-Volume Sellers Are Using To Scale Overseas Webinar to get your foot in the global door.
2018 saw a rise in e-commerce, technology, and globalization. The untrained operative would perceive these as signs of a system too big to fail. As online sellers, you must know that this is too good to be true.
As Amazon begins to streamline and optimize its own processes, sellers must be aware of the health and strategy of their online businesses moving forward. Is there a community and genuine interaction within it to re-engage your target demographic on a consistent basis? Are you optimizing and streamlining your own processes for maximum performance and efficiency? These are questions you have to consider leading into next year.
2019 is expected to create the most dramatic growth yet, bringing e-commerce to an even stronger foothold by the start of 2020. Don’t miss out on the action down the road by being inactive now.
The word of e-commerce is always changing. Constant evolution ensures that it’s here to stay for a while.
How did 2018 impact your e-commerce business? We want your input in the comments below.