Ecommerce is big business. The number of marketplace sellers on Amazon increased by 1 million in 2018, to reach a total of 5 million sellers. Ecommerce has fostered the rise of incredibly successful businesses in recent years, with success stories such as Cards Against Humanity, Whoosh and Oxyfresh owing their meteoric rise to Amazon and other ecommerce platforms to a great degree.
In this article we will look at some of the trends in ecommerce we can expect to see in 2019 and beyond.
Drop Shipping Will Gain More Ground
Drop shipping models are already popular with ecommerce businesses, in particular new businesses with limited capital and/or logistics infrastructure. In 2019 we are set to see more and more businesses adopt drop shipping, and in particular we will see new businesses establish under this model. In today’s global, streamlined world, drop shipping allows businesses to outsource time consuming shipping and handling processes, as well as streamlining delivery, meaning more businesses will move in this direction in the future.
Ecommerce businesses operating through Amazon can use the FBA (Fulfilment by Amazon) program: this is in fact the only option, as other drop shipping methods are banned under Amazon. Although some new sellers are put off from using FBA because of the fees and charges, in many cases these costs are balanced by savings in delivery, logistics and customer service. Amazon FBA is particularly attractive because under the program, Amazon handles all customer queries relating delivery, including returns.
Ecommerce Businesses Will Need To Move Beyond a Single Platform
Despite the rise of ecommerce, and particularly Amazon, consumers are still shopping on a variety of platforms, both online and offline. Figures show that the majority of shoppers regularly buy products both in physical stores (87% of US consumers) and on Amazon (78% of US consumers). Many also shop in a branded online store, on eBay or on Facebook.
What does this mean for ecommerce businesses? Essentially, it means that diversity is key. In order to capture their maximum customer base, businesses should focus on not just one, but multiple platforms to sell their products. Marketing across multiple platforms will also be increasingly beneficial. For certain brands and business this will also mean that it is well worthwhile to maintain both online and bricks-and-mortar stores, so we are not going to see the death of the high street just yet.
The End of Free Returns
There has been growing speculation recently that we may be seeing the end of free returns in the ecommerce industry. This practice has been pervasive throughout the industry for quite some time, with many businesses offering free returns as a way of reducing a barrier to purchase. This has been a largely successful strategy, at least in increasing sales rates, so much so that a growing number of businesses have joined the free return bandwagon. As with many trends, it gets to a point that businesses feel they need to follow in order to be competitive.
However, businesses are now beginning to question this strategy in the face of increasing return rates. In the US, return rates have increased by 53% since 2015. The question remains whether increased sales are reflective of greater success in terms of profit and revenue, when the shipping costs of free returns are taken into consideration. Although the jury is still out, it is possible that 2019 may represent the end of free returns being common practice by ecommerce businesses at least.
The Rise of Amazon PPC
In 2019 we will likely find the Amazon PPC grows increasingly important as more businesses adopt this as a marketing strategy. You’ve probably heard of PPC (pay per click) advertising and you may be wondering what is Amazon PPC. PPC advertising are essentially online ads for which the advertiser is charged based on how many click-throughs the ads receive. This means you won’t be hit with high costs for low performing ads with low click-through rates.
There are several types of PPC advertising offered directly through the Amazon platform. These include headline search ads, product display ads, lightning deals, daily discounts, coupons and sponsored product ads. One emerging trend which is set to develop further in 2019 is ecommerce businesses heavily using Amazon ads such as headline search ads and product display ads in a targeted way to post their ads in their competitors’ listings, and even in their own. This strategy ensures that users viewing their listings are not also exposed to competitor’s ads.
As we move into 2019 and beyond, we are sure to see continued success within the booming ecommerce industry. As the sector expands and more businesses enjoy success, we will also likely see a number of changes to how businesses operate and market their products, such as increasing preference toward drop shipping, PPC and multi-platform approaches, and a possible trend away from free returns on purchases.