woman taping a clothing package for shipment
Conveniences like social media add-ons and the implementation of augmented reality have made the e-commerce business rise. — Getty Images/svetikd

The e-commerce industry continues to grow and there is more opportunity for businesses to get involved. Changes in shipping, artificial intelligence (AI) and social media will continue to shape this industry in the coming year. Here are three things you need to know about e-commerce in 2019.

More companies will implement drop shipping

Drop shipping isn’t a new business model but it will grow more popular and effective in 2019. For companies that don’t have a lot of capital start with, drop shipping can be a profitable business model because the supplier acts as the middle man between you (the business owner) and the customer.

The customer orders the product online and the supplier ships the item directly to them without the you ever having to handle the product. This is both convenient and less risky because you can sell products without carrying a lot of inventory.

According to a 2018 report that looked at 450 e-commerce businesses, only 16.4 were using drop shipping, but big brands like Macy’s and Home Depot are now using the method to widen their customer reach. And, though it’s gotten a bad rap in past years, businesses that implement this model see average revenue growth of 32.7%.

However, there are certain mistakes to avoid when you start a drop shipping business. Make sure you choose a supplier that produces high quality, in-demand products. Never ignore customer complaints and make sure you have a system set up for handling product returns.

Social media continues to open up new opportunities for brands and consumers and nowhere is this more evident than social commerce.

Augmented reality will make online shopping more appealing

When shopping online, have you ever paused over the “Add to Cart” button? You wonder if the item fits true to size or if the product will look right in your house.

This is where augmented reality (AR) comes into play. It provides a richer online shopping experience for customers and helps bridge the gap between the online and in-store shopping experience.

With AR, customers can test or try on products without ever leaving the comfort of their homes. This leads to higher conversion rates for retailers, fewer product returns and greater customer satisfaction.

And, thanks to tools like Shopify AR powered by 3D Warehouse, it’s easier than ever to implement AR into e-commerce stores.

The results of AR for e-commerce really speak for themselves. The interior design platform Houzz found that customers who try products with AR were 11 times more likely to make a purchase. Lowe’s also implemented new AR features and saw a 104% increase in sales.

Social commerce will provide a frictionless buying experience

Social media continues to open up new opportunities for brands and consumers and nowhere is this more evident than social commerce. Social commerce combines e-commerce capabilities with social media.

Previously, a company would have used social media as a way to drive customers back to its website. Instead, businesses will soon have the ability to sell products to consumers directly through their social media channels.

In 2018, Pinterest announced it was launching three new e-commerce features — including upgrading its shoppable pins and enabling new shopping shortcuts that allow users to shop right from their feeds.

Instagram also announced in March 2019 that it was in the process of testing and launching a new e-commerce capability called “Checkout.” The feature will allow customers to buy products on Instagram without leaving the app, and will also permit them to securely save their information for their next purchase. This allows businesses to provide a frictionless buying experience for customers and increase their conversion rates.

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

Published May 13, 2019