The arrival of 2024 will not find the same old e-commerce environment of prior years. Changes in economic conditions, marketing strategies, and a host of new retail challenges are forcing innovative solutions to solve fresh e-commerce issues.
Aging technology will be a problem for retailers who cling to existing marketing and business conveniences. However, technological advancements will also present retailers and marketers with problem-solving approaches that can bring safer online transactions and better customer engagement.
This year will meet consumers’ changing attitudes towards personalization, privacy, transparency, and improved customer experiences (CX). Online shoppers are hesitant to embrace digital spending fully and are looking to resume cash transactions over digital wallets if vendors make it worth their while in discounts.
E-commerce also faces struggles batting away fraudsters and supply chain hassles delaying deliveries that can ultimately get swiped by porch pirates. This growing trend pushes shoppers to rely on ordering online and picking up at local outlets.
Here is a rundown of the latest predictions from leaders in the e-commerce industry. Their crystal ball gazing abilities show both trouble spots and progress ahead.
The Rise of Killer Mobile Apps
Today’s uncertain economic climate forces retailers to place a growing emphasis on mobile apps to fuel business growth and maximize return on investment (ROI), noted Lawrence Snapp, CEO of Bryj, a mobile app solutions firm. To succeed, however, retailers must do more than develop a native mobile app for their key audiences.
“Brands must deliver on users’ heightened expectations for the mobile app experience. This includes hyper-personalizing the digital retail experience by leveraging AI to craft targeted product promotions and tailored advertisements for customers based on their purchase history, as well as utilizing AI-powered platforms to enhance app performance, discoverability, and retail customer acquisition efforts,” Snapp told the E-Commerce Times.
As the most effective and affordable media channel, retailers will increasingly lean on native mobile apps for sustained business success in 2024 and beyond, he predicted for success in 2024.
Over the past decade, e-commerce and digital technologies have become vital to the retail industry. However, new Bryj data suggests less than half of consumers are fully satisfied with retail mobile experiences.
Digital Wallets Face Fight With Cash Carriers
Digital wallets are convenient. Yet, despite the benefits, consumers are increasingly voicing frustrations regarding how to use them for varying digital transactions. The limitations of digital wallets have become increasingly apparent and are impacting further adoption.
These shortcomings will force the widespread development of a coherent and secure digital payment infrastructure, predicted Aron Alexander, CEO and founder of Fintech firm Runa. It will focus on bolstering merchant adoption and ensuring widespread accessibility for consumers on a global scale.
“Creating a more unified digital payments ecosystem can pave the way for a digital wallet experience that truly empowers consumers,” he told the E-Commerce Times.
Alexander observed that the return to cash is related to this digital payment sluggishness. E-commerce vendors will need to deal with a cash-is-back recurrence.
He suggested that credit card company fees are rising, so more merchants will offer discounts for cash or add card surcharges to transactions.
“The share of transactions with cash discounts is on the rise. Card surcharges are becoming untenable for merchants already impacted by rising borrowing and overhead costs with rising inflation,” said Alexander.
Integrated Omnichannel Fulfillment
AI will continue to bridge the gap between online and offline retail interactions by fostering cohesive and relevant omnichannel fulfillment experiences, envisioned Meagan White, head of marketing at modular commerce platform Kibo Commerce. AI will combine and analyze e-commerce touchpoints so retailers can create a unified customer profile that includes preferences, purchase history, and behavioral patterns.
“These forecasts will deliver more accurate, timely, and actionable results, which will help retailers reduce storage costs, minimize overstock, and ensure that product availability meets customer demand,” she told the E-Commerce Times.
White offered a list of several key retail trends e-tailers will be able to integrate in the coming year and beyond:
- AI-augmented customer service capabilities — AI-powered chatbots and virtual assistants will become increasingly sophisticated and handle a broader range of customer inquiries.
- Advanced operational excellence — predictive analytics will forecast supply chain disruptions so retailers can analyze historical data to identify potential problems.
- Upleveled data integration — AI will facilitate native search capabilities for non-technical users with either composable commerce and order management solutions or as a standalone. These capabilities will rely on generative AI processes, such as natural language processing (NLP) and large language modeling (LLM).
- Adoption of neural search capabilities — AI-based neural search capabilities will leverage deep learning models to improve search results by replacing traditional keyword matching with neural context and semantics.
Reinventing Rewards Programs in 2024
Runa’s Alexander also sees more consumers relying on reward and stored value programs to offset rising costs. That will encourage businesses to prioritize modernizing their customer programs to reap the benefits.
“Consumers are already growing frustrated by the inefficiencies of rewards and loyalty programs and are ready to jump ship if retailer schemes do not match their fast-evolving expectations,” he noted.
Loyalty programs have become a cornerstone of customer engagement in e-commerce, serving multiple roles, from enhancing customer experience to playing a part in fraud prevention. As these programs evolve in meeting customer needs, they extend into areas of operational security.
Beyond customer engagement, the modernization of loyalty programs also addresses significant challenges in e-commerce: fraud and policy abuse. Thus, as loyalty programs evolve, they enhance customer experience and safeguard businesses, showcasing their dual role in today’s e-commerce environment.
FTC Crackdown Will Force Wave of Brand Honesty
Keith Nealon, CEO of social media and social commerce marketing firm Bazaarvoice, sees an impending heavy hand by the FTC to reign in honesty in corporate honesty. The crowded e-commerce space will force brands to be more conscious of the user-generated content they publish online.
With the massive proliferation of generative AI in the last year, “It is important to make sure we empower real consumers with real product experience to leave content while also mitigating the risks AI can pose to the expansion of fake content by bots and authors with ulterior motives,” he offered.
“Authenticity — being honest and transparent and sharing only genuine content — has undoubtedly become the most critical attribute for brands and retailers in today’s retail landscape,” Bazaarvoice CMO Zarina Stanford told The E-Commerce Times.
Commerce continues evolving at the speed of light, added Bazaarvoice CTO Colin Bodell.
“But now it’s primarily driven by the current economic pressures that are massively reshaping consumer habits,” Bodell told the E-Commerce Times.
More Data Transparency Coming to Online Commerce
Research shows that 93% of online merchants offer generous return policies to remain competitive. But that is countered by equally high consumer abuse rates, according to Eyal Elazar, policy abuse expert at fraud prevention firm Riskified.
“[In] 2024, retailers must enhance their AI safeguarding efforts to protect themselves from long-term policy exploitation. Looking ahead, we expect more businesses will prioritize data transparency to detect abuse trends, utilizing AI and machine learning to automate abusive identity checks and stay up to date with emerging methods of fraud,” he told the E-Commerce Times.
Elazar sees AI-driven solutions helping to stem the tide of social engineering attacks by organized fraudster schemes. Businesses are now more susceptible to policy abuse and account takeover (ATO) attacks.
Emerging Loyalty Program Trends for 2024
Mandatory account creation and the promotion of membership and loyalty programs are already gaining traction among merchants for better customer tracking. This will prompt them to employ more robust methods to distinguish genuine customers from fake accounts, said Elazar.
He warned of changes in merchant return policies based on customer reputation for honesty over abuse. AI solutions will drive much of the hoped-for successes.
“As we [begin] 2024, we expect more merchants will impose stricter parameters around customers’ digital identity, gradually limiting purchase access within their stores,” he explained.
In 2024, more merchants will use AI to distinguish between good customers and those more prone to abusing store policies. The latter are likely to have their shopping experiences disrupted, as many merchants implement resistance towards disruptive shoppers and even refuse to accept new orders from regular policy abusers, he offered.