The future of e-commerce: Trends and predictions

The e-commerce industry is undergoing a significant transformation, driven by the rapid evolution of technology.

Innovations in artificial intelligence (AI), augmented reality (AR), and other cutting-edge technologies are reshaping consumer expectations and redefining business models, creating a dynamic and competitive marketplace.

In this week’s edition of Let’s Talk, we asked our experts about the key trends driving the future of online shopping.

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Shaun Broughton, Managing Director, APAC and Japan at Shopify

“Looking at the future of commerce, it’s clear that the rising cost of doing business is leading Australian retailers to prioritise innovation as a means for driving efficiency within their operations. In particular, our 2024 Australian Retail Report found that 65% of Australian retailers plan to increase investment in business intelligence in the next 12 months, while 64% plan to boost their investment in automation. These technologies provide businesses with the tools to do more with less, reducing strain on resources while amplifying productivity and leading to smarter decision-making.

“But while we’re seeing retailers turn to innovation to combat internal and external pressures, many face the barrier of data siloed in discrete digital systems, making it hard to gain a unified view of the organisation in one place. With analytics and automation at the top of retailers’ minds in the year ahead, it’s crucial that businesses ensure their commerce platform is up to the task and not hampering their efforts. Retailers should choose a unified digital infrastructure that integrates online and offline operations, so they can leverage cross-channel data and understand where their resources should be placed for maximum impact.”

Nina Jung, Chief Revenue Officer at Chronos Agency

“Looking forward, the ongoing cost-of-living crisis will continue to impact consumers’ discretionary spending, and competition in the eCommerce space will remain fierce. This results in the cost of acquiring new customers for eCommerce businesses increasing, and brands focusing solely on paid media acquisition will ultimately leave money on the table.

“The sector cannot afford to take its existing user base for granted. There is a growing opportunity for eCommerce businesses to embrace retention and lifecycle marketing, focusing on their current database of users and ensuring they receive the personalised and value-adding services they want. Whether engaging with a subscriber to buy for the first time or incentivising loyal customers to buy again with an exclusive offer, eCommerce businesses can achieve sustainable revenue growth by increasing the lifetime value of people familiar with your brand.

“Brands that use email, SMS, and push notification marketing as part of their overall integrated marketing strategy and cater to clients’ individual needs with personalised engagement strategies will remain competitive while surviving this economic crunch.”

Huw Griffiths, Head of Enterprise at Airwallex

“The world of e-commerce offers vast growth opportunities, but navigating a globalised market introduces economic challenges that require modern solutions. Retailers are increasingly exploring technologies such as data analytics, generative AI, and contactless payments, as highlighted in Inside Retail’s 2024 Australian Retail Outlook report. Financial technology is crucial in supporting these trends by providing real-time insights for better tracking of cash flow and expenses.

“E-commerce increasingly focuses on global expansion, making innovative financial platforms essential for managing operations across multiple currencies. Solutions like Airwallex are designed to help businesses overcome high foreign transaction fees and regulatory complexities, allowing Australian companies to operate as local merchants globally. For example, features like batch payments have enabled companies like EHPLabs to save over $20,000 in conversion fees, highlighting the tangible benefits of these advancements.

“As businesses confront rising operational costs and declining consumer spending, payment technology – often neglected in cost-cutting strategies – emerges as a key trend for improving efficiency and reducing expenses. Many retailers and banks still use outdated tools that lead to inefficiencies and delays, making modern payment solutions essential. Payment solutions, like Airwallex, help businesses streamline processes and cut costs, making them vital for maintaining competitiveness in the global market.”

Tara Daly, Senior Director of Product Marketing at Loop

“The future of online shopping is constantly evolving, influenced by technological advancements, consumer behaviour, and market dynamics. Here are three trends that will likely have a significant influence on the future of online shopping and returns:

1. Personalization and AI-Driven Recommendations: AI-powered algorithms are becoming more sophisticated in understanding customer preferences and behaviours, and the technology is impacting the full customer journey, pre and post-purchase. A focus on personalisation will give brands the leg up in fulfilling shopper expectations and improving their conversion rates, all while retaining revenue in their returns and boosting long-term customer loyalty and sales.
2. The Hybrid Storefront: Omnichannel and hybrid commerce are the future of online shopping, where customer experience reigns supreme. It seamlessly weaves together every touchpoint – from websites and mobile apps to social media and physical stores – creating a unified, personalised journey where retailers can meet customers where they are and use marketing to create an impactful brand experience.
3. Shifting returns policies: While flexible returns policies used to be the norm, now they vary more widely, with some brands continuing to offer flexible, convenient returns while others shorten return windows and even charge returns fees to help them reduce the large number of returns. We’re also seeing brands take a tailored approach based on customer behaviour, like offering more flexibility for customers who respect the policies and tightening policies for less trusted customers.”

Simon Laskaj, Regional Director A/NZ at Confluent

“Data streaming platforms are changing how e-commerce businesses improve efficiency and deliver personalised customer experiences. Data streaming allows businesses to unlock value from the continuous flow of data as it’s generated, enabling real-time processing and analysis for immediate insights. This differs from old approaches to data management like batch processing, where there is a delay between data being actionable.

“With data streaming, inventory can be monitored and updated instantly, providing real-time stock availability. Personalisation can also be taken a step further by analysing past spending and browning habits to present targeted and contextualised information to customers at the right time. Data streaming can also support fraud detection, as e-commerce businesses aggregate and process data from inventory, transactional, clickstream systems in real-time to help detect duplicate or fraudulent transactions.

“It’s clear that the use of data streaming in e-commerce and other industries will only accelerate as customer expectations around speed and level of service continue to increase. E-commerce businesses that can take advantage of data streaming to connect disparate systems will be able to offer real-time experiences that keep customers coming back for more.”

Thomas Dexmier, ANZ Country Manager at HTC VIVE

“Brands have a unique opportunity to revolutionise customer experiences using Virtual and Augmented Reality (VR/AR). Over the past decade, these technologies have made significant strides, enabling retailers to engage audiences in new ways to give them unique experiences, and drive loyalty and grow sales.

“Brands are increasingly using VR and AR to allow consumers to experience products before they purchase. Ikea’s Place app allows shoppers to simulate furniture in their home before ordering it. The “Nike Fit” AR function provides suggestions on ideal shoe size and style. Immersive experiences are being used for events, transporting consumers to captivating virtual environments, engaging the senses and evoking strong emotions.

“These technologies empower online retailers to gain further insight into their customers. By analysing how consumers respond and interact with immersive experiences, brands can craft more personalised activations that resonate. In an era where consumers seek authenticity and relevance, VR and AR can redefine shopping strategies.”

Sharon Melamed, Managing Director at Matchboard

“Ecommerce is an industry which naturally lends itself to the global marketplace. The opportunity for Australia-centric ecommerce players is to tap into overseas markets, and this means getting set up for customer service in different time zones and languages, and in some cases, managing return merchandise locally. Thankfully there are third parties which make round-the-clock multilingual customer service an easy transition. Countries such as Fiji are supporting many Australian ecommerce players with 24×7 outsourcing solutions, providing phone, email, chat and social media support. Philippines and South Africa are also great options. Chat and email software also enables real-time translation so an English-speaking customer service representative (CSR) can receive an inquiry pre-translated into English, and the customer will receive the CSR’s response translated into their language, all completed by software and AI applications.”

Anthony Capano, Regional Director of ANZ, Intuit Mailchimp

“One of the most exciting shifts we are witnessing in eCommerce is the increasing integration of AI and machine learning. These technologies are revolutionising personalised shopping experiences by providing more precise product recommendations and advanced predictive analytics. And they allow marketers to meet consumers’ evolving expectations: a recent Intuit Mailchimp survey reveals that 49% of Australian consumers envision a future of personalisation where they don’t have to search for products and services—the right options will find them instead.

“AI can also help businesses activate more strategic discounting strategies. Predictive analytics, for example, can be used to offer targeted incentives to high-lifetime value customers, making up for markdowns by attracting customers with a larger average cart size. Whether they’re building deeper connections through individualized content or activating new revenue streams with strategic incentives, businesses will thrive as long as they stay committed to personalising their strategies—and AI makes that possible.”

Beni Sia, GM and SVP, Veeam APJ

“The future of e-commerce relies on data. If the movement of data stops, the world stops. This is why e-commerce companies need to invest in data protection and management technology solutions to future proof their business for the future.

“Good data protection and management goes one step further than simple backup and recovery – it makes data more ‘resilient’. Data resilience is what is needed in today’s world where ransomware attacks are constantly on the rise. According to Veeam’s 2024 Data Protection Report, one-third of servers had at least one unexpected outage in the past 12 months, caused mostly by cyberattacks. If data is more resilient, the less likely it will be compromised.

“Online shopping is a staple for Australians. Latest research from Statista shows that Australia’s online retail market has been gradually expanding since 2021, reaching over $63.5bn in total online spending on goods in Australia. To maintain such strong momentum, online retailers need to prioritise data protection and management best practices.

“Data resilience means business resilience – the one thing e-commerce players need to thrive and survive in the future.”

Nick Morgan, CEO & Founder, Vudoo

“The eCommerce landscape is rapidly evolving, with video emerging as an increasingly powerful tool for capturing consumer attention and generating leads, as proven by TikTok’s social commerce play. For brands, this shift is creating opportunities to showcase their products in a more captivating way.

“Content commerce allows brands to present their shopping cart wherever a customer is consuming content, which effectively extends their storefronts beyond their owned assets and cultivates an “always-shopping” mindset in customers.

“Furthermore, consumers are increasingly shopping on their mobile phones and expect brands to make interactions and transactions seamless, encouraging the trend of “shopping all the time”. There’s also a shift from shopping on traditional platforms like owned websites to social media, such as TikTok and Instagram, with Gen Y and Gen Z driving the trend of “retail everywhere”.

“Brands and retailers who turn to interactive, shoppable video to enhance customer experiences can gain significantly from the content commerce opportunity ahead – leading customers’ hearts straight to carts. We can expect more integrated content commerce solutions that combine videos, images and articles with eCommerce capabilities, enabling brands to connect with consumers through high-attention channels, gathering significant intent signals and resulting in increased conversions and favourable returns on investment.”

Percy Hung, CEO & Co-Founder at Choco Up

“The future of e-commerce is set for transformation, driven by technological advancements and evolving consumer preferences. Our “Delight the 2024 Shopper” report with Inside Retail identifies key trends shaping the industry. Australian e-commerce businesses face significant challenges, particularly in inventory management. Real-time data analytics will be crucial for maintaining optimal stock levels, and reducing the frustration of out-of-stock items—a major deterrent for 43% of online shoppers. Additionally, managing currency fluctuations will be critical, emphasising the need for flexible payment gateways offering stable, competitive pricing.

“Payment options will diversify, addressing the concerns of 15% of shoppers seeking more flexibility. E-commerce businesses must integrate various payment gateways and offer credit terms to enhance customer satisfaction and maintain cash flow. Logistics and fulfilment will prioritise speed, as 34% of shoppers value fast delivery. Investments in efficient logistics and partnerships with reliable providers will be essential.

“Marketing strategies will need to be more dynamic and omnichannel-focused, leveraging data-driven insights to create personalised shopping experiences. Choco Up supports e-commerce businesses by providing growth capital that aligns with e-commerce’s unique cash flow needs, such as managing seasonal demand spikes. By adapting to these trends, businesses can better meet customer expectations and thrive in the competitive e-commerce landscape.”

Hunter Leonard, Founder & CEO at Blue Frog Marketing

“E-Commerce is now a gangly somewhat uncoordinated teenager who has run at life with all the energy and vigour of youth, but got into some scrapes and come out a little wiser. Business Owners know that we are rapidly heading towards a third or even half of all sales being transacted online. They haven’t figured out yet how to secure the cost and labour savings that were promised in the move from bricks and mortar to online stores. Retailers are pushing back against offering free delivery and returns due to massive return and waste costs. Businesses are tired of having 15 or 20 or more pieces of software to support their online operations and are moving to single source of truth systems – now called Customer Commerce solutions – so they can reduce the number of staff deployed to make technology work and put staff back in customer-facing, revenue-generating roles. 90% of consumers want more humans available to service their needs, and pushing back on the use of FAQ’s, chatbots and AI when they need help. These two trends of consumers wanting more human contact and businesses wanting to provide more service to differentiate themselves will see e-commerce grow into maturity.”

Elise Balsillie, Head of Thryv Australia

“One of the most pressing challenges small business owners face is a lack of time.

“Many small business retailers still operate as brick-and-mortar stores, and owners are tasked with back office duties, managing customers, suppliers, employees, marketing and more. The smaller the company, the more tasks an owner will likely have.

“When I chat with retailers I’m often asked, ‘How can I scale my business when I already feel like there aren’t enough hours in the day?’ My answer is simple: e-commerce.

“With the right combination of a physical and online store, AI-bolstered e-commerce is incredibly powerful for gaining a competitive edge and achieving rapid growth.

“Now is the perfect time for small business owners to leverage e-commerce, thanks to a few emerging capabilities:

1. AI is revolutionising personalisation: Generative AI is an undeniable time-saving tool, transforming campaign optimisation to a granular level. AI enables business owners to move away from standardised loyalty programmes and deliver personalised offerings based on unique customer shopping habits and how they engage with brands.
2. Advertising on social media is evolving: Social media is evolving responsively to technological advancement. For example, Advantage+ is a game-changing new advertising feature launched by Meta to help businesses dynamically generate personalised ad content using machine learning. Likely, other social advertising platforms will soon follow suit.

“These exciting technology advances will help small business retailers work smarter, not harder.”

Kerry Kingham, CEO and Managing Director, Chooze

“The future of e-commerce is evolving rapidly, driven by advancements in technology that are reshaping the way we shop. As part of my mission to redefine online shopping for the disability and aged care communities, these are trends I am watching closely:

• Personalisation: Advanced data analytics and AI enable highly tailored online shopping experiences. This is particularly impactful for the disability and aged care sectors, where there’s a real need to cater to individual needs, preferences and disabilities.
• Voice Commerce: Voice-activated shopping through devices like Amazon Alexa and Google Home gaining popularity, this technology has the potential to simplify online shopping for elderly and disabled customers, reducing the need for typing or navigating complex interfaces.
• Augmented Reality (AR) and Virtual Reality (VR): Strides in VR and AR tech will allow customers to visualise products in their environment before purchasing. In disability and aged care contexts, AR can help users see how assistive devices or home modifications will look and fit in their space, enhancing their shopping experience.
• Sustainable and Ethical Shopping: Sustainability and ethicality are growing priorities, with consumers increasingly preferring eco-friendly and socially responsible brands. This is especially crucial in the disability and aged care sectors, where trust is paramount.
• Subscription-Based Models: The rise of subscription models for regular delivery of products offers convenience, particularly in the disability and aged care sectors, where many consumers rely on a steady supply of essentials like medical supplies.
• Improved Accessibility: Fully accessible e-commerce platforms ensure that all customers, regardless of physical abilities, can navigate and shop with ease, making the experience more intuitive for everyone.
• AI-Powered Customer Support: AI chatbots and virtual assistants are now expected among online shoppers, providing instant customer service. For elderly and disabled individuals, this can unlock  immediate help and answers, reducing the complexity of interactions.”

Miles Toolin, Head of Sales Engineering, APAC at Eagle Eye

“E-commerce must replicate the in-store experience seamlessly, ensuring a streamlined customer journey with consistent personalisation and touchpoints across all channels. As we shift towards personalised mass promotions, ecommerce vendors are increasingly partnering with top-tier loyalty providers to achieve the enterprise scale needed to service their customers effectively. With Google’s reduction in cookie usage, ecommerce brands must now prioritise strategic partnerships and customer engagement to maintain a cohesive customer experience, avoiding fragmented touchpoints. Additionally, ecommerce leaders are focusing on becoming MACH-certified and adopting composable architectures. Companies like Commercetools are leading this trend, enabling customers and prospects to be more agile and responsive to ever-changing customer landscapes.”

Konstantin Klyagin, Founder of Redwerk and QAwerk

“Mobile commerce is booming. With 73% of US online shopping happening on smartphones, retailers should optimize their websites for mobile and thoroughly test them on a wide range of target devices, ensuring seamless navigation and checkout.

“Social commerce is another major trend. For example, TikTok tops the charts for consumer spending and downloads worldwide. Instagram, Facebook Marketplace, Pinterest, and many other social media platforms have also integrated shopping features to engage with customers in a native environment.

“Similarly, we can see the convergence of shopping and entertainment. Shopatainment platforms, popularized by pioneers like Taobao Live (Alibaba), create engaging shopping experiences through live streaming, influencer marketing, and interactive content.

“Augmented reality (AR) is transforming product discovery. AR shopping lenses, like those on Snapchat, let customers virtually try on products. This personalized approach boosts engagement and sales. VR shopping is not that common yet, but we can predict that with greater adoption of VR headsets, we’ll likely see more stores creating VR experiences for their shoppers. Users will be able to interact with hyperrealistic 3D visualizations of products, which is exactly what StockX did for Apple Vision Pro users.

“Finally, AI. It’s already powering e-commerce. Amazon and other big names have long leveraged personalized recommendations, visual search, and dynamic pricing. With the advancement of AI, we’ll see even more features geared toward understanding consumer behavior and hyper-personalization.”

Olivia Jenkins, Business Consultant, Olivia Jenkins Consulting

“As an expert Business & Marketing Consultant specialising in ecommerce, I have had the honour of helping ecommerce clients generate over $75 million in revenue since mid-2019.

“The e-commerce landscape is evolving at the speed of light, driven by rapid technological advancements and shifting consumer behaviours.

“Here are key trends and predictions:

• Personalisation, AI Integration, and Chatbots
  onsumers now expect personalised shopping experiences. AI and machine learning are key to tailoring recommendations, improving customer service, and optimising inventory management. Chatbots, powered by AI, offer immediate assistance, enhancing customer experience and driving engagement.
• Augmented Reality (AR) Showrooms
  AR technology is transforming the online shopping experience. By allowing customers to virtually try on products or see how items fit in their homes, AR reduces return rates and enhances satisfaction. AR showrooms provide immersive shopping experiences, bridging the gap between physical and online retail. This approach helps brands build an iconic brand presence, ensuring they remain a go-to authority in their industry.
• Subscription Models
  Subscription services are gaining traction, offering convenience and personalised experiences. Brands leveraging this model can foster customer loyalty and ensure steady revenue streams. Subscription boxes, auto-replenishment services, and exclusive member benefits are some ways businesses can capitalise on this trend.”

Terence Thean, Head of Digital at Communicado

“The cost-of-living crisis is very real. An economic shift that is driving a new wave of purchasing behaviour, decision-making, and consumerism at a granular level.

“Price is undeniably pivotal, but brands that prioritise delivering an exceptional customer experience during challenging economic times will reap long-term rewards.

“It’s not just about facilitating an instant purchase; it’s about building lasting relationships and fostering brand loyalty. Focusing on nurturing connection to consumers rather than merely completing transactions. Brands who want to survive have got to play the long game.

“At Communicado, we are supporting our eComm clients with test frameworks and hypothesis development to improve conversion from key audience segments, beyond ongoing discounting and sales.

“We’re going deep, using new tactics to move the needle for younger demographics seeking personalised experiences vs baby boomers who have higher incomes and are looking for a more convenient purchase experience.

“Winning customer loyalty is a hard-earned sport, so brands need to reassess what value means to each audience “segment”. By understanding and responding to their preferences with customer-focused strategies brands can better build lasting relationships.

“First party data is crucial – taking into account all touchpoints to get a full picture of the customer journey, which will allow them to offer tailored incentives that deliver meaningful value, beyond price.”

Narendra Shukla, Director – Consulting Services at Edwise Consulting

“In my view, technological innovations and changing consumer behaviour will define the future of eCommerce industry in years to come. Here is how these trends are expected to drive the change.

“Technological innovation:

• Customer experience and personalisation: Thanks to Augmented Reality (AR), and Virtual Reality (VR) technologies, customers can now visualise products even before they buy them. Companies like IKEA, are already using AR to create delightful customer experience and reduce product returns.
• Trust & Transparency: Product authenticity, and source of products were a big concern for eCommerce consumers. To tackle this challenge, eCommerce brands are now proactively employing Blockchain to facilitate product source verification. This helps in gaining trust by allowing verification of product source and authenticity.

“Changing Consumer behaviour:

• Delivery in Minutes Concept: consumers don’t want to wait for days before they receive their orders. Delivery in minutes concept is quickly gaining ground in countries like India where ecommerce brands like Blinkit delivering orders usually within 30 minutes.
• Demand for sustainability: demand for sustainable products and materials is rising. eCommerce companies can expect improved customer loyalty​ and growth if they prioritise sustainability.”

Michelle McCarthy, Personal Brand Strategist & Speaker, Studio Danu

“Buyer psychology is changing, it’s not enough to sell a great product anymore – consumers want to see the people behind the brand.

“After years of working from home and isolation, we are craving connection and authenticity. Conscious consumerism also means that consumers are getting more savvy and increasingly picky: they want to ensure you truly understand them, and that your ethics align with theirs.

“We are already seeing the trend of business owners stepping out from the shadows of the brands they’ve created and delving into creating their own personal brands. And over the next 12-18 months we are going to see an explosion of founders leaning into this.

“This isn’t a fleeting trend however, it’s a complete shift in the industry dynamic. Therefore, early adoption will be crucial, allowing founders and teams to create genuine connections, raving fans and life-long loyal customers.”

Lyn Nguyen, Founder and Operations Specialist at Auvie Consultants

“The rapid emergence of AI and automation, including robotic automation, will continue to transform supply chain efficiencies for e-commerce businesses.

“Automation will eliminate the need for manual data entry, as orders will be processed in real-time. This will mean less labour hire, faster delivery times and little to no human error.

“There will be more opportunities for brands to scale and expand globally. As e-commerce is predominately virtual, brands can conduct remote market research through platforms like Meta, to identify the best markets to invest in.

“With both the e-commerce landscape and consumer expectations evolving, businesses must have seamless operations and logistics. They must actively enhance every touchpoint of the customer journey, from packaging to shipping and delivery.

“In a bid to avoid warehouse costs and optimise freight, more brands will likely engage third party logistic providers, which allow businesses to rent a warehouse space and outsource the fulfilment process.

“While technology will make way for more e-commerce efficiencies, brands will need to continue investing in their online and offline communities..

“Loyalty programs and in-person brand activations will be essential drivers for customer satisfaction and retention, along with faultless customer service.”

Paco Albie, Co-Founder of Digital Immersion

“We have identified four key trends that will shape the landscape of customer data and personalisation this year and beyond, and here’s what we are advising our clients.

“First, the principle of doing more with less is becoming increasingly crucial. With 76% of teams operating on the same or reduced budgets compared to last year, efficiency and creativity are more important than ever.

“Second, personalisation is gaining prominence. A notable 71% of B2C companies are prioritising personalisation as a key strategy for the next 12 to 24 months. This approach is essential for driving customer engagement and loyalty.

“Third, data quality and monetisation are critical. Only 22% of teams have well-managed, high-quality data. In a data-driven world, this quality is crucial. Retail media, in particular, is a booming sector where high-quality data can lead to significant revenue opportunities. If you are in retail and not leveraging this, you are missing out on potential gains and improved supplier relationships.

“Lastly, compliance and governance remain challenging. With only 41% of teams confident about recent privacy changes, compliance is complex. Despite Google’s decision to retain third-party cookies, safeguarding first-party data remains essential. Preparing for these changes will better position you for future success.”

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