Head of Private Banking at Caye International Bank in Belize, Luigi Wewege believes that there will be many new changes to the digital retail world. The Fintech professor and founder of the Luigi Wewege foundation has predicted these e-commerce trends for the new year ahead.
“There will continue to be both negative and positive changes of how the world of business will work.” he stated.
Experts have estimated that online shopping will continue to grow, with the expectation that more than 95% of purchases to be done through e-commerce shopping by 2024. There are currently over 2 billion shoppers worldwide and 51% of the global population make their online purchases through their smartphones. In 2021, 72.91% of the market share is expected to be conducted just by mobile commerce.
Small businesses will have Omni-channels
According to recent research Luigi Wewege believes that small businesses will have to restructure their customer service by utilizing omni-channels that focus on marketing, selling and providing support to customers that will have to be integrated and adjustable to any way that the customer reaches out.
There will be many changes in consumption
Sales and services in travel, dining and hospitality have been declining and Luigi has predicted that these business sectors will struggle to increase in sales. This is because of the current circumstances with the majority of the global population being forced to stay at home, and even travel bans as well as closed borders which have currently taken place.
Many people have shifted their focus on purchasing products that they see as necessities or physical products that they know will be useful for long term use. With the current circumstances being unpredictable, customers are not risking losing their money.
“There has been no certainty with travel resuming back to normal, which means that it can take longer than a year for these types of industries to have healthy economic growth again” Wewege stated.
Businesses will have to adjust with their products
Since there has been an increase of consumers of all ages that are now familiar with the e-commerce market, this has resulted in a high demand for products that’s suitable for everyone.
“It’s now crucial to understand your customer’s market and to have products that can be adjusted to all kinds of needs. More and more consumers are purchasing products through e-commerce stores at least once a week, which will soon follow with a high demand for services and goods that are satisfactory to customers.” Luigi Wewege explained.
There will be an increase in advertising costs
Since businesses are now operating online, this means that they need to continue to promote and advertise their services and goods to online consumers. There are 3.5 billion social media users with Facebook still being the leading social media platform.
In 2019 it was recorded that 73% of business marketers had found that advertising through social media was somewhat effective, and 71% of consumers rely on reviewing positive customer reviews that have been recommended by friends and family before they make their purchase.
Luigi has predicted that this will continue to increase in 2021, since more consumers are opting to purchase online. “Advertising costs will naturally increase, especially considering the fact that 91% of social media users are on their mobile devices. Businesses will have to re-evaluate their marketing strategies and advertising costs in order to meet their expected targets and a growth in profits.” Wewege explained.
First-party data will become widely used
Businesses use first-party shopping data to understand their customers better, but since this current industry will continue to thrive it has been predicted by Luigi that customers will soon demand brands to understand buyer’s needs by making the right recommendations instantly.
Wewege also has predicted that online retailers will have to follow a trend of predicting what customers will want next and what they want to see when browsing online.
Payments will have to become more flexible
Online consumerism also comes with risks and one of these is attracting fraud. There has been a 110% increase of e-commerce orders in the United States alone, without cards being present at a cash register.
Frauds have given a huge blow to online retailers and there are different types that businesses have to look out for. “Online businesses are receiving an overwhelming number of unusual transactions that they need to constantly keep track of and determine whether it is fraud or not.” Luigi Wewege explained.
This means that online retailers have to find ways to make purchases secure and flexible for consumers by adding more features such as E-Wallets. Secure third-party options give customers the opportunity to spend without any limits and to try to limit the chances of any forms of identity fraud that is currently happening online.
Smartbots will have to help out with demand
Due to the sudden increase of online consumerism, most job sectors were not prepared to have so much work which has also made workers struggle under pressure and work longer hours. However, there is a long-lasting solution that many companies such as Apple, Amazon and Google have started using and that is Smartbots.
“Artificial Intelligence Technologies has been growing rapidly and globally, which is why it’s predicted that there will be more platforms using Smartbot apps in order to have intelligent conversations with customers and to help workers deal with the increase of work.” Luigi stated.
The financial services guru has concluded that there will be both positive and negative changes for e-commerce stores in the year of 2021, but if everything is handled with a digital first strategy then there can be a great economic boost that will carry on from this year forward.
E-commerce has increased even more this year due to the coronavirus pandemic. A global online survey that was carried out by Shopify concluded that 84% of consumers of all ages shopped online now, due to the circumstances of physical stores being closed and the stringent regulations of lockdown. It has been predicted that retail e-commerce sales are an industry worth just over $4 trillion dollars just this year.
Luigi Wewege is a professor at the Fintech School in California and is currently the Senior Vice President at Caye International Bank in Ambergris Caye, Belize. His book The Digital Banking Revolution is currently available as an audio and paperback for people who want to learn about the financial sector.