Rapid eCommerce acceleration started in spring 2020 transformed many areas of ecommerce forever. It brought new challenges and created new tremendous opportunities for brands simultaneously. In this article, we identify three trends that will continue to shape ecommerce in the next year and beyond.
Greater Attention To Fraud Prevention And Cybersecurity
eCommerce fraud has been rising since the beginning of the pandemic as more retail volume moved online. A Juniper Research report indicated that online retailers could lose more than $20 billion in 2021 to e-commerce fraud crimes, including identity theft, chargeback fraud, and account takeovers.
Fraud evolved from amateur hacking and small cybercriminal groups to completely industrialized criminal enterprises. Criminals use automation, dark web marketplaces, and sophisticated recruiting techniques to operate extended networks on a global scale. They access or purchase stolen identities data and use it in multiple ways.
You may read more about ecommerce fraud trends and in our recent article 3 Pillars of eCommerce Fraud Prevention.
Fraud prevention requires urgent attention from every eCommerce business because of its significant impacts on its bottom line. Merchants adopt more robust tools to detect and prevent a broad spectrum of fraud types and avoid adverse effects on customer experience. The new fraud prevention tools apply machine learning algorithms and identity management technologies to complement or replace legacy processes and systems.
Leading brands use AI-based technologies to minimize fraud risk and, at the same time, improve customer experience.
B2B Commerce Digital Revenue is Surpassing B2C Ecommerce
Historically B2B organizations have been significantly behind B2C brands in digital commerce channels. Because of that, they were less prepared to operate under restrictions introduced since the beginning of the COVID-19 pandemic. Businesses had to accelerate the adoption of digital commerce to achieve record-setting growth. By 2025, 75% of B2B manufacturers will sell directly to their customers via digital channels.
B2B ecommerce technology requires much greater integration with other internal backend processes within the organization and to be able to support more complex sales process business to consumers online stores. We see the growing applications of headless commerce and machine learning technologies in supporting business-to-business transactions.
B2B ecommerce model assumes converting traditional account-based relationships to digital. The B2B ecommerce has to support contract list price, quote requests, purchase orders, term payments, and situations when multiple users may have purchase authority for a single business account. Business users expect a similar level of frictionless shopping experiences as in B2C commerce.
Business-to-business relationships are intrinsically more complex than traditional business to consumer. B2B ecommerce platforms have to support different models:
- Supplier sell directly to business customers
- Wholesale model sell to distribution channel partners
- Selling through authorized resellers
- Hybrid multichannel and B2C
B2B platform vendors adopt AI-based technologies to improve customer experience and integration with order fulfillment, ERP, customer service, and CRM functions.
Enhanced Fulfillment Supply-chain Planning
We observed a clash of two trends since spring 2020: customers expect to receive merchandise as quickly as possible while the supply chain experienced multiple disruptions. Those two trends created tremendous pressure on merchants to become more resilient, diversify their suppliers, fulfill, and deliver options.
Technology platforms extend their features to support inventory and order management with multiple suppliers, shipping providers, and delivery methods to enable more “resilient eCommerce.”
Multi-location order fulfillment
To reduce delivery time and offer same-day delivery, merchants migrate to multiple warehouses to locate inventory closer to customers.
Advantages of multi-location order fulfillment
- Reduced shipping costs can make your prices more competitive.
- Faster delivery improves customer satisfaction and increases the probability of customers purchasing again. It helps you win in a competitive market where Amazon is the dominant player.
- Accuracy in Fulfillment. Merchants must implement modern, sophisticated inventory management systems to predict and allocate product quantities in multiple locations. Such enhanced inventory management improves fulfillment accuracy.
Disadvantages of Multi-Location Order Fulfillment
- Cost of the initial implementation. Multiple warehouses require capital investment to establish each location. Merchants also need to upgrade the existing software and add multi-location capabilities to the inventory and order management systems.
- Increase of operational cost. Operating costs are higher in comparison to the single location model. Most small brands experience skills and resource bottlenecks when scaling their operations to multiple locations.
It is beneficial for small and medium enterprises to partner with existing multi-location fulfillment operators. Multi-locations fulfillment service providers help merchants avoid initial high capital costs and resource bottlenecks.
Shift to Circular Supply Chains
The typical supply chain where most of the materials are discarded into landfills is wasteful. We see a growing interest in the “Circular Supply Chain” model as an alternative to the traditional.
The “circular supply chain” is a model in which at least a large fraction of materials is recycled and reused in the main product and packaging.
While it will take many years to implement it on a large scale, we expect that “circular” supply chain growth will start accelerating in 2022 and ecommerce brands will increase their attention to sustainability. Though there’s always an initial cost of implementing new processes, the circular supply chain can help cut costs in the long run, resulting in long-term savings.