The Future of E-commerce: Trends and Predictions for Shopify Businesses
March 23, 2023
Over 4.5 million active Shopify businesses sell everything from pet food to fitness apparel and coffee beans online.
We have the COVID-19 pandemic to thank for skyrocketing e-commerce sales as consumers adopt the social distancing mentality.
But with the pandemic easing and consumers flocking back to brick-and-mortar shopping, what does the future hold for e-commerce and those millions of Shopify businesses?
In 2019, online purchases made up only 17.8% of total sales. Experts predict that the global ecommerce market will reach 23% of total sales by 2025.
That’s a 5.2 percentage point increase in just five years, highlighting the continued growth and importance of e-commerce in the overall retail landscape.
But with growth comes added challenges. So what does the future hold? And how can Shopify businesses stand out in such a crowded market?
In this blog, we’ll dive into the top trends and predictions for the e-commerce industry and how to drive long-term success for your Shopify business.
Are you ready to learn more?
Let’s dive in.
Artificial Intelligence (AI) Takes Center Stage
As Shopify businesses continue to grow, they must look for ways to streamline their operations and gain a competitive advantage.
One way to do this is through AI and machine learning technologies. These technologies can help businesses automate tasks, analyze data, and make better decisions.
And with the increasing popularity of work-from-home jobs, more e-commerce companies will operate remotely and will need to leverage technology to manage inventory, shipping, etc.
Here are a few ways AI will take over:
Chatbots
These computer programs are designed to simulate conversations with human users, often through a messaging interface on your homepage. They can help provide customer service, answer questions, and even help customers make purchases.
Shopify businesses can use chatbots to improve their customer service experience and provide round-the-clock support without human intervention.
As natural language processing technology improves, we can expect chatbots to become even more sophisticated. That means they’ll be capable of handling even more complex queries.
Kiehl’s uses this technology to provide better customer service through quizzes and answering questions — driving more sales and boosting loyalty to their skincare brand.
(Predictive Analytics
According to SAS, predictive analytics uses statistical algorithms and machine learning techniques to identify the likelihood of future outcomes based on historical data.
By leveraging predictive analytics, Shopify businesses can gain valuable insights into customer behavior and preferences. The result? They’re able to make more informed decisions and optimize their operations.
One use of predictive analytics is dynamic pricing, which changes prices based on things like supply and demand, competitor pricing, and customer behavior.
(Use predictive analytics to improve your pricing strategy and increase revenue by analyzing customer data and market trends. That means more money in your pocket at the end of the day.
But that’s not all.
Shopify businesses can also use predictive analytics for inventory management by analyzing historical sales data and forecasting future demand. Say goodbye to unwanted inventory surpluses for good.
Lead Scoring
One of the main challenges for ecommerce businesses is the unpredictable behavior of consumers.
However, this problem is completely solvable, especially with the help of a tool like HubSpot lead scoring. Why?
Lead scoring is the tried-and-true methodology that helps businesses determine when their customers are likely to make a purchase.
So why throw time and resources at customers that aren’t likely to convert? The higher the score, the better the chances of pushing them over the purchase threshold.
(Artificial intelligence helps you determine the green flags that indicate a customer is close to that threshold. It’s an efficient way to increase conversions and boost your bottom line.
Workflow Automation
With all the competition in the e-commerce space, Shopify businesses need to be one step ahead and focus on customer retention and experience.
Make your website stand out from the sea of online stores by focusing on personalization, keyword targeting, and quality copywriting and content.
AI workflow automation and machine learning are great tools for saving time and improving marketing efficiency.
For instance, crafting product descriptions can often feel like a delicate balancing act.
On the one hand, the descriptions should be informative and provide customers with a clear understanding of the product. On the other hand, they must also be compelling enough to inspire visitors to purchase — like this one from Wayfair.
(And this applies to all of your products, requiring a major drain on resources to create engaging descriptions across your entire product line.
AI automation tools can help you craft hundreds of product descriptions in seconds. Talk about a time saver. It’s worth every penny because now you can focus your time and energy on other growth initiatives.
Cybersecurity Is a Top Priority
As e-commerce evolves, businesses face a growing challenge: protecting their online stores from cyber attacks.
Shopify businesses must prioritize web application and API protection to safeguard their customers’ sensitive data and prevent unauthorized access.
By investing in these measures, they can ensure the safety and security of their sites. And for the future of e-commerce, trust is paramount, and protecting against cyber threats is essential for building customer confidence and establishing a robust online presence.
Take a look at some of the most common security threats that your e-commerce store needs protection against:
(Cyberattacks can cause serious financial and reputational damage. Don’t let this happen to you. Stay proactive and invest in the appropriate cyber security protection before it’s too late.
Affiliate Marketing Remains Relevant
Affiliate marketing involves partnering with other businesses or influencers to promote products and earn a commission on sales generated through their efforts.
This approach can be particularly effective for Shopify businesses looking to expand their reach and acquire new customers.
As the e-commerce market grows and becomes more competitive, we expect affiliate marketing to remain an important strategy for Shopify businesses looking to stand out and drive sales.
It’s nice for any business to have websites willingly mentioning them in blog posts and articles. Still, it’s worth noting that a deliberate investment in affiliate marketing can sometimes be very rewarding.
For example, Ambitious Kitchen, a food blog, adds affiliate links to different brands to make money and drive sales for each brand. It’s a win-win for both parties.
(The success rates are jaw-dropping, with 16% of e-commerce sales in the United States stemming from affiliate marketing.
Affiliate marketing is here to stay. And not to mention, some of the biggest players lock in 5%-30% of their internet revenue from affiliate marketing.
Greater Emphasis on Sustainability
Consumers are becoming more environmentally conscious, increasing the demand for sustainable products and practices.
Shopify businesses that demonstrate their commitment to sustainability will likely see increased sales and customer loyalty. Rothy’s has seen great success with this approach.
By carefully considering the details of each customer’s order, Rothy’s aims to create a more sustainable and eco-friendly experience.
For instance, to reduce waste in their shipping and packaging practices, the Rothy’s team has adopted a unique approach. Instead of using a box within a box, they’ve made their shoeboxes serve as the means for shipping and returns.
These boxes use 85% post-consumer recycled materials and are vegan and biodegradable. And Rothy’s continues to look for ways to improve its packaging, aiming to reduce using additional paper cards and increase the versatility of its boxes.
(Rothy’s approach to sustainability centers on reimagining every aspect of its products and packaging to minimize waste. And customers who share the same values and missions as Rothy’s will seek to make purchases from this brand over its competitors.
Loyalty Programs Gain Steam
With so many options available to consumers, you must seek ways to incentivize repeat purchases and build customer loyalty.
Why? Loyal customers are hard to beat. They spend more with your brand and are more likely to shout from the rooftops about how much they love your products.
So it only makes sense to reward this behavior. Right?
By offering rewards for purchases and other actions, you can encourage customers to keep coming back and help drive long-term growth for your Shopify business.
This trend will continue as businesses seek to differentiate themselves and build strong relationships with their customer base.
If you need inspiration, look at how Ulta Beauty sets up its loyalty program. It’s one of the best in the business, so it’s a good model for your endeavors.
(As loyal customers contribute to revenue growth, offering them exclusive benefits is a way to show appreciation and build a strong customer base.
Adding a loyalty program to your online store can result in sustained revenues through new product releases and contribute to your brand’s overall success.
The Continued Growth of the Subscription Model
Subscription-based businesses are becoming increasingly popular, and Shopify businesses will continue to adopt this model to generate recurring revenue.
Scoring a new sale feels like waking up on Christmas morning. But securing a customer who purchases a subscription for the rest of the year feels like you won the lottery.
Think of it like working smarter, not harder, to keep a steady stream of sales flowing every month. And you don’t have to be the largest Shopify store to do so.
Mother Tongue Coffee, a small coffee roaster located in the Bay Area, offers subscriptions for their coffee beans, and it’s a smashing success.
(If you haven’t dipped your toe into the waters of the subscription model, it’s time to give it a spin this year. We promise you’ll love the monthly recurring revenue.
Increase in Mobile Commerce
Mobile commerce is growing rapidly and will make up 10.4% of retail sales by 2025.
(Consumers continue to turn to smartphones as their golden source for everything from text messaging to social media and online shopping. Why? It’s quick and easy.
As a Shopify business owner, making sure your website is optimized for mobile devices is more important than ever.
Selecting the right theme is important to ensure that your customers can easily navigate your store on their mobile devices. While Shopify does offer a selection of free themes, if you’re looking to optimize your site for sales, consider investing in a paid theme.
Thankfully, Shopify’s mobile-responsive themes show how your website will look on a mobile device, so you can make decisions that match your store’s vision and goals.
Use the preview feature to help you select the best theme for your Shopify business and ensure a seamless customer experience across all devices.
Stay on Top of Emerging Trends to Grow Your Shopify Business
Despite the news headlines, the future of e-commerce looks bright. And with the right strategies in place, Shopify businesses can thrive in this rapidly evolving landscape.
From AI-powered chatbots to predictive analytics, you can leverage many exciting trends and technologies to drive growth and success. Loyalty programs, affiliate marketing, and mobile optimization are also essential elements that shouldn’t be overlooked.
It’s crucial to stay ahead of the pack and adapt to changing consumer behaviors and preferences as we move further into the digital age.
By keeping a pulse on emerging trends and staying informed about what’s coming next, Shopify businesses can position themselves for long-term success and sustainability.
So what are you waiting for? It’s time to implement some of these emerging trends into your e-commerce strategy and take your Shopify business to the next level. Happy selling!
