E-commerce is constantly evolving to keep pace with the changing demands of consumers. In 2024, as shoppers increasingly lean on artificial intelligence to answer questions and refine their searches, they will expect merchants, brands and marketplaces to keep pace.
Generative AI features deployed last year, such as chatbots and content-creation tools, will gain traction among users and merchants — and we’re just getting started — as yet unimaginable use cases will be rolled out in the years to come.
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“The technology is nowhere near reaching its full potential; when it does, the disruptions are going to be massive,” said James Yang, a partner at Bain & Co, a consultancy.
Check out the top e-commerce trends in descending order below.
#5: Surprise & Delight
Consumers need light relief after several turbulent years, so they will bond with brands that inject fun into shopping.
A backlash against boring helps explain why interactive and joyful retail formats were wildly popular in 2023. Livestreaming e-commerce and short-form videos straight to shoppers’ cell phones spring to mind.
“The TV is no longer the center of the living room in China, it’s been replaced by the mobile,” said Daniel Zipser, who leads consumer and retail efforts in Asia at McKinsey, a consultancy.
Zipser sees China as a hotbed of retail innovation and a leader in marrying livestreaming with commerce. He paid close attention to livestreaming developments during China’s 11.11 shopping festival, the world’s largest shopping campaign that runs from late October to mid-November. This is when merchants pour money into marketing campaigns and adopt the latest innovations in commerce.
He spotted the spread of a richer and more varied tapestry of livestreamers.
Livestreamers can be influencers, celebrity anchors, or even avatars. One fast-developing trend to watch in 2024 is merchants creating their own livestreaming channels rather than relying on a third party to connect with clients. Taobao said 64 merchant-run livestreaming channels recorded turnover above RMB10 million, and 675 made sales of over RMB10 million during 11.11.
Livestreaming platform Taobao Live said will add to its stable of top-tier streamers in 2024, attracting KOLs with audiences in vertical consumer segments and niche categories. To do this, it is sharpening its conversion rate, creating a more engaging consumer experience and a richer product pool, leveraging AI to do so.
“We expect livestreaming e-commerce and high-quality content will continue to be popular among consumers in 2024,” a spokesperson for Taobao Live told Alizila.
#4: Shift to Thrift
Economic uncertainty and the rising cost of living dented consumer confidence in 2023. As a result, saving money is a high priority, and shoppers will look for novel ways to stretch their household budgets in 2024, said Euromonitor International. Value hackers will try to cut expenditure without compromising on quality, and they’re finding crafty ways to do it, the consultancy said.
These consumers actively seek cheaper options, pay with credit cards or rewards points, switch to premium private-label brands and participate in free activities. Deinfluencers have also become popular on social media this year, where KOLs expose products they believe are overpriced.
In China, the psychological impact of a slower-than-expected recovery from the pandemic is still widely felt, and consumers displayed value-seeking behavior writ large during the 11.11 shopping festival.
“It’s not a one-time tightening of the purse strings,” said Bain’s Yang, who believes this value-seeking behavior will continue for at least the next one to two years.
#3: China Recalibrates
2023 disappointed many China pundits who were optimistic about the world’s second-largest economy rebounding swiftly from the pandemic. That optimism faded during the year as economic headwinds buffeted consumer sentiment.Yet long-term structural trends continue to unfold, and China’s economy is steadily becoming more consumption-driven.
When Chinese policymakers recently convened in Beijing to discuss the year ahead, they emphasized steady economic growth in 2024 and said the long-term positive outlook had not changed. While 5 percent growth may not set pulses racing like the 7 percent-plus a decade ago, China’s economy is far bigger now.McKinsey sees the country’s retail sector, encompassing both products and services, rising by 5 percent this year, with similar projections for the coming years. Given China’s vast market size, this incremental growth would translate into an additional RMB10 trillion (USD1.4 trillion) in retail sales in 2027.
#2: Green Credentials
Shoppers feel their individual contributions to holding back climate change are limited, and they’re tuning out messages that place the burden on their behavior, said Euromonitor International.
Instead, they are throwing the burden back onto retailers to show they are green. More than three in four consumers would appreciate information on making environmentally friendly online purchases, a report commissioned by Alibaba Group showed earlier this year.
#1: Rebooting Chatbots
Generative AI opened up a wealth of opportunities for merchants and brands to become more efficient and offer consumers a more tailored shopping experience in 2023.
As Franck le Moal, Group IT Director and CIO of LVMH, recently told Alizila: “For LVMH Maisons, having this strong intimacy and strong interaction with customers to invent a personalized experience is absolutely critical. We believe that technology is able to bring us this unique opportunity.”
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In 2024, consumers will keep testing generative AI’s capabilities and they expect brands to do the same, said Euromonitor, a consultancy. The retail industry must embrace ongoing experimentation to stay one step ahead.
(Source: Alizila )