The Future of E-Commerce & Emerging Trends in Kenya
Introduction
As the e-commerce landscape keeps evolving, future e-commerce trend setters will be those that make the most of new technology and smartly manoeuvre the evolving trends from the onset. By identifying value pools to quantify market size, defining the target experience of the most-valuable-user’s journeys and conducting research to understand the feasibility and viability of change, brands with such an approach will drive the future.
As the race toward seamless and hyper-personalized shopping experiences shifts into high gear toward the festive season, online businesses that prioritize business strategy and customer needs will go a long way when outpacing competition.
Case for online trading
Depleted consumer savings, high interest rates, mounting consumer debt and turbulent economic headwinds continue to drive the contraction of consumer spending hence preventing them from loosening their purse strings. Nonetheless, the question then begs, how can retailers and brands prepare for the year’s end and the new year ahead? As such, this article seeks to explore the trends changings the e-commerce landscape as well as look into investing in artificial intelligence, seamless customer experiences and digital business transformation which are key to maintaining a competitive edge in the e-commerce landscape.
Emerging Trends and the Future of the Online Market Place
1. Generative Artificial Intelligence (AI), Zero-Click searches and AI-led Marketing
Generative AI refers to the use of AI models to create new content such as text, images, music, audio and videos. Such models use neutral networks to identify patterns and structures within existing dates to generate new and original content.
Zero-click searches on the other hand is when a user’s search shows a result that directly answers the query on the search engine results page such that the user does not have to click on a link. For example, searching on google how old a famous actor is tends to appear on the top together with a knowledge panel summarizing key details about the entity being searched hence no need to further click on a link to get the requested information. While this may result in reduced web traffic, brands appearing on these results appear more prominently on the results page than they would otherwise might leading to new clients and more branded searches in future. As links to third-party affiliate websites fall to the way-side, content from owned brand websites as well as sponsored shopping listings will continue to dominate.
Despite the fast rise of such generative AI tools such as ChatGPT, most retailers have rolled out generative or conversational search tools such as Tawkto which have improved real-time deal comparison and overall search results. As consumers continue to expect improved customer experience, brands that have a generative AI tool will continue to crate a competitive advantage.
As generative AI technology advances, online marketing has given rise to AI-generated imagery used to personalize product images to match different audience segments. By placing products within a certain lifestyle context, this can increase e-commerce conversion rates as generative AI makes the process cheaper and faster through its ability to generate personalized product recommendations for them. As long as retailers have the right digital expertise and quality assurance practices in place, the potential for increased conversion rates, purchase cart sizes and consumer engagement online through AI advertisements will outweigh the risks.
2. Personalized Advertising
As consumers continue seeking personalized advertisement, retail media networks are now striving to fill a market need for consumer packed goods and branded manufacturers.
Targeted advertising is less annoying than it used to be as consumers actually prefer and expect e-commerce advertising to be customized to their unique wants and needs. For instance, a retail media network advertising a target loyalty program, is only differentiated based on recent spending and/or points accumulation while a diverse group of customers are all hit with the same blanket offerings and promotions. Such retail marketing networks that further segment their promotional offers within their loyalty programs receive higher engagement and return business as it tends to directly capture the consumer needs based on previous engagements.
3. Second-hand marketplaces
While the ever-biting cost-of-living increases and sustainable purchasing habits remain on the rise, second-hand marketplaces, resale and rental platforms have seen accelerated growth more than before.
Third-party consumer to consumer (C2C) marketplaces such as Jiji and even Facebook Marketplace have thus far dominated the second-hand market. Moreover, new business to consumer (B2C) and even business to business (B2B) marketplaces are on the rise. From advancements made by platforms such as Yaga Kenya, Price Point Kenya to Corido Marketplace, prospective retailers will need to experiment with the right price points, logistics and value chains to make these e-commerce platforms profitable and deepen the relationships with their target customers. Retailers than can automate the authenticity and wear identification using AI will create cost-savings and generate a competitive advantage in this growing market.
4. Influencers and Product Reviews drive online shopping
Particularly among younger generations, mostly Gen-Z, authenticity continues to be paramount for online shoppers. As more and more brands saturate social media through sponsored advertising and influencer partnerships, many consumers continue to seek out “unsponsored” product reviews and word-of-mouth advertising from passionate customers and influencers.
Retailers that seamlessly integrate user-generated content into e-commerce channels, from written to video product reviews, will remain the top shopping destination for younger consumers.
5. Slowly living and high-quality products
The trend of influencers on social media discouraging consumers from overconsumption and recommending which products to avoid has prompted a renewed interest in high-quality products. As consumers continue to care more about sustainability and becoming more eco-friendly despite the high cost of living, long-lasting and durable products continue to be the easiest practice toward corporate sustainability among many other common environmental initiatives such as trumping waste reduction, decreasing greenhouse emissions etc.
This trend accompanied by the “slow living” movement which encourages a more leisurely and sustainable pace of life, such products located conveniently at physical retailers discovered using way-finding tools may be a welcome alternative for environmentally conscious consumers.
6. Seamless payment systems and short-term financing
The rise of buy now pay later has pushed the concept of “invisible payment” as ideally, there is no longer a need for visible interactions between the customer and the payment system. As the e-commerce experience becomes more personalized and seamless, retailers have accelerated the adoption of frictionless payment options. Digital payment systems such as M-pesa, Pesapal and Popote Pay have really made e-commerce a personalized and seamless experience. Furthermore, Paypal credit, Afterpay and even Apple’s Pay Later solution has ensured some form of short-term financing. The access to quick short loans offered by the myriad of online credit lenders such as Tala, Branch, Lendplus etc. has further provided easy loans to consumers seeking to have a full online shopping experience.
However, it is crucial that retailers expand these payment options for those repeat buy now pay later users who prefer splitting purchases over four payments, without encouraging naive shoppes to take on debt that they would be unable to pay back.
Conclusion
The future of e-commerce is not just a vision, it is a rapid unfolding reality as digital shopping continues to evolve. Integration of digital wallets along with the emergence of AI presents countless opportunities to improve customer experience and propel corporate expansion. Adopting such new ideas and trends reshaping the industry remain essential for prosperity.
By making the best use of cutting-edge technology and staying ahead of e-commerce trends, retailers distinguish themselves from the competition and obtain an edge over the market. As the future remains bright with opportunities, extraordinary success requires putting the appropriate plans in place. Contact Bellmacconsulting today, and let us shape the future of your e-commerce success!