The Future of E-Commerce: 3 predictions for customers

It’s been a while since I last got out my crystal ball: back in 2016, I wrote an article on what I thought retail would look like in 2025 (in German), and a lot has changed since then, so when Upload Magazine asked me if I’d join forces with Edmund Frey from Spryker to peer into the future once again, I leapt at the chance. Then, in between Upload contacting us and us actually writing this piece (original here in German), Corona happened. Originally, we would have produced a stark, but classic assessment, based on the increasingly undeniable development that almost all forms of retail whose business case is based on selling bought-in products onwards at a mark-up have little prospect of surviving in future – regardless of whether they operate in stores or on the internet. The only exceptions we see to this are extremely large online marketplaces or extremely large category specialists, neither of whom, however need the mark-up to earn money these days as they have hit on the far more lucrative idea of hiring out their access to the consumer to third-party merchants. This was true before Corona, of course, but our timeline for predicting how it plays out would have been something between five and ten years; as our world was turned upside down in a matter of weeks this spring, we realised that the Covid-19 pandemic is operating as a catalyst, condensing changes in the market we expected to see over a decade into the space of six, twelve, or eighteen months. So this is what we expect to see in that timeframe for customers, for retailers, and for producers and brands.

The future from the customer’s perspective

Every device becomes a shop

We are currently still in the tail-end of a long phase in the history of consumption in which places have been assigned retail functions. It is still considered reasonable to expect that each town will have, say, an electronics retailer who will stock a standard range of televisions, stereos, etc. and sell them at a fair price. It is, however, also considered reasonable to go online and see what ao.com has on offer – and indeed to order it there. Most of us have also become familiar with links leading out of social media platforms like Instagram or messengers such as WhatsApp to Amazon et al.

The more time we as consumers spend in the digital sphere, the more pressing it becomes to ask why there needs to be a link from WhatsApp to an online shop. In the near future, the answer will be that we will increasingly buy things without even leaving the WhatsApp ecosystem. After all, WhatsApp can already verify us and may have our payment data – so why does Amazon need to man the check-out? Expect to see voice orders placed and confirmed anywhere and everywhere – even by drivers at the wheel, as cars increasingly become networked.

So consumption, the driving force behind western economies, will become omnipresent, and the overall effect of this will be that places created specifically for consumption, both offline and online, will become superfluous to requirements. Amazon et al have already realised this, by the way, which is why their internal competition analysis is now more focussed on Instagram and WeChat than on retailers.

Personalisation actually happens

As the place in which things are bought dissipates, one of the long-outstanding promises of e-commerce will finally be honoured: personalisation – yes: one-to-one, specific personalisation. To date, even the largest online retailers such as Amazon and Zalando have not really managed to offer their users – about whom they already know more than enough – a genuinely individual shopping experience. There are all sorts of complicated reasons for this, most of which boil down to two main sticking points: firstly, the wildly overgrown product ranges of modern platform retailers make it almost impossible to generate selections; and secondly (contrary to what has long been assumed), evaluating past purchases does not lead to a simple, reliable recommendation pattern for the future. That – along with dozens of rather dull technical details – is the answer to why, oh why, Zalando is still showing you women’s underwear when you log in despite the fact that your profile is set to male.

These hurdles will fall, however, as new devices markedly reduce the range of products between which we can choose. “Reducing product range” doesn’t sound great, but it will feel good when we no longer have to click our way through several hundred pairs of headphones until we find the right ones; it will actually be far more comfortable to choose between two or three different models – all of which do the job. Or take food shopping: in spite what we like to think, most of us have eminently predictable weekly shops, meaning that machine “learning” can go at a pace it can handle here (i.e. glacial).

If you’re reading this, you’re a member of the Filter Generation

Both of these developments will lead to the product filters we currently apply (brand, colour, price, availability, etc.) becoming ever less relevant. This is already happening as users, having learned from Google and Amazon, no longer filter selections in online shops, but simply use the search functions. The real game-changer, however, will be tightly curated and highly personalised selections in tomorrow’s e-commerce: why would you need to filter to find the right brand and the best price if both are automatically displayed to you by the provider? And yes, if you’re thinking that this means we will buy more – and buy it at higher prices – you’re right. What is more, we’ll think that we got a good service. And that, of course, is actually what will count: offering consumers a positive experience. Don’t panic, though: the cheap-o bargain places will still be out there for those willing to go searching; but there probably won’t be many who want to actively seek them out.

to be continued with 3 predictions for retailers (next week)