This article originally appeared on Inc 42
For the Indian ecommerce sector, 2023 was more about retention and loyalty than customer acquisition
In 2024, more brands will implement generative AI to change how customers discover products and make the shopping experience more intuitive and personalised
Here are some trends expected to shape up and gain significant traction in 2024
The ecommerce sector is ever evolving, and in 2024, expect a new wave of changing customer expectations at every touch point and creative strategies and technologies to meet these changes.
Ecommerce businesses witnessed intensified competition in marketplaces. They had to navigate through crowded marketplaces and also struggle with an increase in ad costs on these platforms.
The surge in customer acquisition costs added another layer of complexity, pushing businesses to reevaluate their strategies for sustainable growth. So, 2023 was more about retention and loyalty than customer acquisition. There was also a noticeable uptick in overall marketing costs for ecommerce businesses.
Amidst all the competition, a significant shift occurred—more and more brands started adopting an omnichannel approach. This strategy has proven instrumental in boosting conversion rates, recovering abandoned carts, and garnering positive word-of-mouth from satisfied customers.
Expanding presence was not limited to digital platforms only; ecommerce brands also took bold strides in crossing borders. This allowed brands to go beyond geographical boundaries and tap into diverse consumer bases. This strategic move widened the reach of these brands and set the stage for a more interconnected and globalised ecommerce ecosystem.
The narrative of 2023 wasn’t entirely defined by external challenges, internal transformations also left a great mark. More and more brands recognised the power inherent in data as they increasingly turned to analytics for informed decision-making.
Descriptive and predictive analytics, which were once cutting-edge, became mainstream tools for making ecommerce decisions and creating new strategies. Businesses use the insights derived from data to optimise everything from inventory management to personalised marketing efforts. This helped ecommerce brands stay a step ahead of those not using data.
It’s also impossible to overlook how artificial intelligence evolved drastically and started transforming ecommerce in 2023. ChatGPT and many other generative AI technologies got great acceptance in the ecommerce ecosystem. They took centre stage to improve the way customers interacted with ecommerce businesses.
Many brands used ChatGPT to provide better customer support and a more personalised and efficient interface for addressing customer queries. Integrating generative AI into ecommerce operations brought a new era of efficiency, creativity, and customer engagement.
Looking at how 2023 has shaped, one thing is clear — how the ecommerce ecosystem shapes up in 2024 will depend heavily on technology. Here are some trends expected to shape up and gain significant traction in 2024.
Trends That’ll Shape Ecommerce Ecosystem In 2024
Spotlight Will Be On GenAI: AI and Machine Learning are set to play even more essential roles in ecommerce. Expect these technologies to be crucial for retailers, helping predict demand, optimise inventory, and enhance marketing campaigns through proactive use of data.
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Beyond conventional applications, the spotlight will be on Generative AI, a technological trend that’s already making waves. Brands like Myntra already use this technology to allow shoppers to ask specific outfit questions and receive suggestions from across categories.
In 2024, more brands will implement generative AI to change how customers discover products and make the shopping experience more intuitive and personalised.
Social Media Platforms Will Act As Marketplaces: Social media platforms will become spaces for socialising while also acting as full-fledged marketplaces. Integrating shopping features into social platforms will redefine the online shopping experience, allowing users to make purchases seamlessly while scrolling through their feeds. People still buy via social media with ads, but 2024 might be the year when you won’t have to leave the app to buy.
Live Stream Shopping To Gain Traction: Live stream shopping, where influencers and brands showcase products in real-time, will gain immense traction. The immediacy and interactivity of this format create a sense of urgency and connection, making it a powerful tool for boosting sales and engaging audiences in a way that traditional ecommerce struggles to match.
Aldo, a Canadian retailer, teamed up with two celebrity stylists to deliver a social shopping spectacular. On the stream, the celebrities shared their favourite style tips. With this shoppable live stream, Aldo saw a 308% engagement rate and registered 17,000 pageviews on its website.
Immersive Shopping Experience To Gain More Adoption: As technology advances, immersive shopping experiences will gain more adoption and prominence. More customers will be trying clothes on virtually or visualising furniture in the living space before making a purchase.
While AR is not entirely new, its integration into the ecommerce space is set to reach new heights in 2024. This trend is about enhancing the customer’s understanding of the product, reducing uncertainties, and ultimately driving conversion rates.
If executed effectively, AR can bridge the gap between the online and offline shopping experiences, creating a more engaging and informed customer journey.
Challenges Ahead For Ecommerce Ecosystem In 2024
It’s not all rosy in 2024. Ecommerce brands will have to deal with the challenge of margin pressures. Rising costs in various aspects of operations, from advertising to supply chain logistics, will require a strategic rethinking of business models.
Brands will have to be innovative—finding ways to enhance operational efficiency, exploring alternative revenue streams, and embracing technologies that optimise costs without compromising customer experience.
Also, a deep understanding of customers is no longer a luxury reserved for enterprise-level businesses; it’s a basic requirement if you want to stay in ecommerce.
In 2024, Customer Data Platforms (CDPs) will transition from being an option to a must-have for retailers and brands.
These platforms aggregate customer data from various touchpoints, providing a unified and comprehensive view. The insights derived from CDPs empower businesses to deliver highly personalised experiences, anticipate customer needs, and build lasting relationships.
As we step into the year, the future of ecommerce is defined by a convergence of cutting-edge technologies and evolving consumer preferences. From the seamless integration of AI to the immersive experiences of augmented reality, businesses that adapt to these transformative trends will thrive. And businesses that fail to keep up with these trends will most likely be left behind.
Authored By Prem Bhatia, Co-Founder and CEO, of Graas.
30 Dec 2023